Henrike Hahn, member of the European Parliament (The Greens/EFA), industrial policy speaker, member of the Industry Committee and the Green Shadow Rapporteur on the Chips Act comments on the file as adopted by the plenary today:
"The Chips Act is a crucial industrial policy tool for the EU's technological independence and resilience. For a competitive green industrial policy, we need a stable supply of semiconductors in the European Union.
Besides megaprojects, start-ups and small and medium-sized enterprises will now also receive easier support and targeted assistance, for example in training qualified specialists. It is a clear green success that the Chips Act focuses on environmentally and climate-friendly production of semiconductors and on circular economy. Faster approval procedures for production capacities in the EU shall not be at the expense of environmental impact assessments.
In the future, it will be crucial that the boost of a competitive EU semiconductor sector is further supported through new, dedicated and targeted funding sources like own resources, for example."
I would be happy to answer any further questions.
Briefing for the vote on 11/07/2023
The Chips Act, which would secure the EU’s supply of chips by boosting production and create emergency measures against shortages, was debated and put to a vote on Tuesday, 11th of July. The final results on the Chips Act vote are: 587 in favour, 10 against and 38 abstentions.
The new law aims to increase the EU’s capacity to produce semiconductors from under 10% to 20%, as the pandemic exposed vulnerabilities in global supply chains, with semiconductor shortages causing rising industry costs and consumer prices, slowing down Europe's recovery.
The legislation will support projects to enhance the EU's supply security by attracting investment and boosting production and it will help small and medium-sized businesses, particularly in chip design, to stimulate innovation. We have secured €3.3 billion for chip-related research and innovation and the new rules will establish a network of competence centres to address skill shortages.
The Act is based on 3 pillars:
- Pillar 1: the 'Chips for Europe Initiative', supporting large-scale technological capacity building and innovation across the EU. The actions under this Initiative will be primarily implemented through the Chips Joint Undertaking, i.e. the amended and renamed Key Digital Technologies Joint Undertaking.
- Pillar 2: a framework to facilitate the implementation of projects aimed at ensuring the EU's security of supply, by attracting investments and enhancing production capacities, via so-called 'first-of-a-kind' Integrated Production Facilities (vertically integrated production facilities) and Open EU Foundries (offering their production capacity to other industrial players).
- Pillar 3: a coordination mechanism between the Member States and the Commission for monitoring the supply of semiconductors and crisis response to semiconductor shortages, estimate demand, anticipate shortages, trigger the activation of a 'crisis stage' and act through a dedicated toolbox of emergency measures.
The Green Analysis
Overall, we had a major role in shaping the final version of the text
- We improved the beneficial effects on SMEs and startups, while enhancing transparency and clarity.
- In order to work towards a green competitive industry, we introduced the new policy goal of having improvements in energy and environmental performance, recyclability, or reducing production inputs. This is extremely important as it can be used as guidance in the evaluation processes, helping to green the industry.
- One issue remaining is fast track permitting and derogations, which is a recurring one over multiple files. However, as long as we are not creating new derogations and as we have managed to introduce some safeguards, this can be accepted as a compromise.
On pillar 1:
- We are happy to have secured the overall funding amount of 3.3 Bn. EUR as proposed by the Commission.
- Going forward, we continue to call for fresh money for new initiatives supporting Chip production in Europe.
On pillar 2:
- We achieved major Green successes:
- We inserted in the objectives of the regulation new references to reducing the climate impact of electronic systems, improving the sustainability of next generation chips and strengthening the circular economy processes
- Instead of just supporting few mega projects, there is an increased focus on technological capacity building as well as SMEs and start-ups. For example, Competence Centres will support SMEs and design centres for excellence can be supported with up to 90% state aid for small enterprises.
- Lastly, we worked on the definition of "first of a kind" so a wider range of stakeholders can profit from the regulation: upgrading existing facilities is now possible, environmental gains criteria are strengthened, and positive spill-overs on other member states or companies are required.
On pillar 3:
- We introduced clearer criteria on which the existence of a crisis is assessed
- We also gave the semiconductor board, comprised of member states representatives and (permanently) observed by the European Parliament a stronger voice and mandate.
- Lastly, to improve transparency and crisis preparedness, we introduced a new concept and language on how the Commission should conduct a proper mapping of the semiconductor value chain
Originally proposed by the Commission in February 2022, Council already endorsed the negotiation outcome on 10 May. As such, the Chips Act should enter into force swiftly after the plenary vote.