Europe finally has its answer to President Joe Biden’s signature climate law.

The EU this week unveiled a series of proposals aimed at catalyzing its clean energy economy and securing the minerals needed for a transition away from burning fossil fuels.

In addition to meeting global climate goals, the move is an effort to mitigate the trans-Atlantic uproar that greeted the “Made in America” provisions of Biden’s $369 billion climate law.

The American law offers tantalizing incentives to low-carbon energy companies that have operations in the U.S. and use materials sourced in the United States. Without similar cash or tax bonanzas on the table in Europe, companies there are threatening to move operations overseas.

That has stoked fear across the continent that European industry faces an existential decline if governments aren’t willing to inject capital into a fast-growing, increasingly competitive corner of the economy.

The European Commission’s new proposals aim to cut planet-warming pollution while boosting Europe’s ability to compete with both U.S. investments and China’s decadelong effort to dominate the market for electric car batteries and other energy technology, writes POLITICO’s E&E News reporter Sara Schonhardt.

“The race is on,” commission President Ursula von der Leyen said in an address to the European Parliament.

At the center of Europe’s Green Deal Industrial Plan, as it’s called, is the Net-Zero Industry Act, which sets a target for the 27-nation bloc to produce at least 40 percent of its clean energy needs domestically by 2030.

The commission is also proposing a Critical Raw Materials Act aimed at reducing EU dependence on certain countries — primarily China — for lithium, rare earths and other minerals used to make products such as wind turbines, solar panels and electric vehicle batteries.

While the package itself wouldn’t provide specific subsidies or financial incentives, it would create a regulatory environment needed to direct funding to European clean energy industries, whether through tax breaks or leftover pandemic recovery funds.

That dynamic has left some European officials frustrated with what they see as an abandonment of free-market ideals in favor of picking winners.

“This direction is quite dangerous,” Günther Oettinger, Germany’s former European commissioner, told a team of POLITICO reporters. “It’s not a single market, it’s a planned economy more and more: a centralized, planned economy.”

There are still many kinks to be worked out between the European Union and the United States. European leaders have been pressuring the Biden administration to scale back its domestic sourcing provisions, with mixed results. Von der Leyen and Biden agreed last week to coordinate on subsidies.

Thank goodness it’s Friday — thank you for tuning in to POLITICO’s Power Switch. I’m your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to [email protected]

Today in POLITICO Energy’s podcast: Josh Siegel breaks down how Republican Rep. Bruce Westerman and Democratic Rep. Scott Peters are leading the effort in the House to find common ground on an important but highly elusive energy issue: permitting.

AROUND THE WORLD

The Biden administration made big environmental news this week, with something to love — or hate — for just about everyone, write Robin Bravender, Timothy Cama and Emma Dumain.

It began Sunday, when the Biden administration rolled out a drilling ban in the Arctic Ocean. On Monday, the Biden team announced a major Alaska oil project that enraged green groups and prompted immediate lawsuits. The administration Wednesday reversed a contentious Trump-era development plan for an Alaska wildlife refuge.

Energy and environment insiders are complaining about whiplash.

The announcements flustered drilling advocates, Alaska lawmakers and environmentalists alike. They left Biden allies with questions about the administration’s overall message on how it’s approaching energy production, environmental protection and Native issues in Alaska.

Power Centers

Senate feuding
After New Mexico Democratic Sen. Martin Heinrich criticized the Biden administration’s approval of the Willow drilling project in Alaska’s National Petroleum Reserve, Alaska Republican Sen. Dan Sullivan said of Heinrich: “I get along with every senator except him because he’s a hypocrite,” writes Kelsey Brugger.

New Mexico is the nation’s largest oil producer and the second-largest gas producer. Heinrich, who seemed unfazed by the attack, said it’s different because the Willow project is located in untouched wilderness.

Nominations
Judy Chang, a former Massachusetts undersecretary of energy and climate solutions, has emerged as a front-runner for the open seat at the Federal Energy Regulatory Commission, three people familiar with the White House appointment process told Jeremy Dillon and Miranda Willson.

Chang played a major role in setting energy policy under then-Massachusetts Republican Gov. Charlie Baker. The state is considered a leader in the clean energy transition, with a goal of net-zero planet-warming pollution by 2050.

Scientist strike
When the release of the latest installment of the Intergovernmental Panel on Climate Change’s sixth major climate report was delayed last year, countries, scientists and green campaigners were upset.

At the time, the delay was blamed on “operational reasons.” But new public documents show the delay came after the scientists writing the report temporarily walked off the job, writes Karl Mathiesen.

In Other News

Unintended consequences: Elon Musk’s lightweight, high-speed internet system is becoming a new and valuable tool for Brazil’s illegal miners.

Resilience: A town in Puerto Rico is celebrating a “first-of-its-kind” solar microgrid.

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Indigenous and environmental groups asked a federal court to issue an order blocking construction of ConocoPhillips’ Willow oil project.

The Republican push to loosen federal permitting rules for energy projects is falling flat with the industry it’s designed to benefit.

There’s growing evidence that Republican efforts to eradicate ESG investing in the name of profit and “anti-wokeness” will bruise — not benefit — retirees across the country.

That’s it for today, folks. Thanks for reading, and have a great weekend!

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