On the occasion of the adoption of the EU Chips Act in the Committee on Industry, Research and Energy (ITRE), with 67 votes in favour, one against and 4 abstentions, on January 24th, 2023, Henrike Hahn, Member of the European Parliament (The Greens/EFA), deputy speaker and industrial policy spokeswoman of the German delegation, shadow rapporteur for the EU Chips Act, comments:
“The Chips Act is an important European booster for semiconductors to support a competitive sustainable industry in Europe. We need semiconductors for the green transformation. We cannot mobilize the same investments in Europe compared to the Inflation Reduction Act in the US – but smart support at the right spots can provide targeted support for European green industrial policy.
This is a good day for European industrial policy because many will benefit from the Chips Act in Europe: Potentially all innovative companies - large and small - in the EU semiconductor value chain as well as the large-scale projects already in the planning phase in some member states. An increase in semiconductor production will increase the security of supply of all industries that are dependent on semiconductors in Europe and strengthen Europe as a business hub.
It is a clear green negotiation success that the Chips Act does not create any new exemptions for existing environmental legislation. Whether existing exemptions are applied remains a decision of the member states.
Unnecessary administrative hurdles within the permitting process must be removed. We want to start expanding capacities in semiconductor production as quickly as possible. We agreed on that across all political groups during the negotiations.
Another strong green negotiation success, which is important to me personally, is the extension of the scope for public support to all so-called "first-of-a-kind" facilities. The Commission had planned that only major large-scale projects, such as Intel in Magdeburg, should be eligible to receive state aid.
The position of the ITRE Committee is now that the scope for public support should apply to all companies along the EU semiconductor value chain.
Highly specialized small and medium-sized enterprises (SMEs) can receive state aid if they invest in product or process innovations that have not existed in Europe before.
From a green perspective, it was also particularly important to include process innovations, e.g. in the form of greatly reduced water consumption in semiconductor production, in the definition of a called "first-of-a-kind" facility and thus make them eligible for public support.
Process innovations that make semiconductor production more sustainable are thus eligible for funding in Europe.
With the Chips Acts we want to strengthen the competitiveness of European industry without at the same time creating major distortions in the internal market.
Because of the limited financial resources at EU and member state level we must focus primarily on expanding existing strengths within the EU semiconductor value chain.
This is also made possible by the now extended scope of the Chips Act.
We were able to place the proposed emergency measures for the European Commission in the event of a future semiconductor crisis, such as the collection of sensitive company data or the power to issue priority rated orders to the industry on a solid foundation, e.g. by formulating what exactly a semiconductor crisis actually is.
We create a European Semiconductor Board composed of representatives of the member states under the chairmanship of the Commission and the permanent oversight of the European Parliament. The inclusion of the European Parliament in the semiconductor committee, which I called for, was particularly important to me.
The European Semiconductor Board now needs to agree on a methodology that will allow the Commission to design early warning indicators and conduct an analysis of the proposed emergency measures.
The ITRE Committee is now demanding additional approval from the Semiconductor Board to declare a semiconductor crisis. Only then can the corresponding emergency tools be used.
This is important from a democratic perspective, but it is also a clear signal for potential investors. The message here is that emergency instruments can only be used in extreme situations.
The compromise of the ITRE committee confirms the principle of fresh money for fresh initiatives. For my colleagues and I on the ITRE committee, the newly proposed Chips Act R&D initiative needs to be funded from new sources. The Commission has proposed using existing funds, i.e. Horizon and Digital Europe, for this initiative and diverting the corresponding funds from there. That is unacceptable for us in the ITRE committee. We need a dedicated financing of the Chips Act.”
Please do not hesitate to contact me if you have any further questions.