EU Council approves tax breaks to promote clean industry agreement

The Council of the European Union has approved conclusions on tax incentives to promote clean technologies and industry as part of the European Clean Industrial Deal. This is stated in a press release from the institution.

The EU Council emphasized the need to revive Europe’s economic dynamism, strengthen industrial resilience, and maintain the bloc’s position as a global manufacturing hub. The conclusions welcome the European Commission’s recommendation and policy options for achieving the objectives of the Clean Industry Deal—targeted tax breaks and accelerated depreciation.

The EC also recommends that tax incentives comply with certain general principles to ensure the economic efficiency, simplicity, and timeliness of such measures.

At the same time, the EU Council emphasizes the need to ensure the simplicity of tax incentives for companies and tax authorities, particularly given the differences in the tax systems of the bloc’s member states. They should be seen as one of the possible elements that each country should consider as part of a changing mix of policies to support the development of clean energy, industrial decarbonization, and clean technologies.

In addition, the conclusions emphasize that flexibility in their application is key for EU member states.

The EU Council also called on the EC, where appropriate, to assess the effectiveness of tax incentives introduced by countries and to share experiences.

As GMK Cenrter reported earlier, the European Union will offer development funding to countries affected by the Cross-Border Carbon Adjustment Mechanism (CBAM). The document, which sets out the bloc’s new global vision on climate and energy, refers in particular to support through a new instrument, Global Europe.