The US has dwarfed European aid efforts with its massive $400 billion subsidy package for the green transition, passed by President Joe Biden in August 2022. This level of support has already attracted investments to the US that were previously directed towards Europe. If Europe had similar support mechanisms as the IRA, Finland believes there would be more investments in the country.
Tuuli Kaskinen, CEO of the Climate Leadership Coalition (CLC), points out the differences between US and EU funding. While the US invests a large amount of money straightforwardly, the EU disperses funding across various streams and routes. The CLC is Europe’s largest non-profit business network for climate work, founded in 2014.
In Europe, the focus is on innovation and investments while in the US, there is an emphasis on market access and growth. The IRA subsidies target solar and wind power as well as hydrogen production. The aim is to lower prices for clean technology products and increase demand. However, despite a significant amount of pending projects, there is a lack of investments in hydrogen in Finland. Kaskinen believes that a system similar to the IRA would boost investor confidence and lead to more sustainable investments.
According to Kaskinen, if European subsidies were more straightforward like the IRA, investors’ concerns about market demand and price levels for green hydrogen would be alleviated with a more streamlined support system. This could attract more investment to hydrogen production in Finland. The Swedish Confederation of Business and Industry monitors green transition investments in Finland but also recognizes this gap in investment opportunities for hydrogen production due to lack of subsidies from European governments compared to those offered by American government programs such as IRA.
Overall, if Europe were to adopt a similar support mechanism like that of the IRA, it could lead to increased investment opportunities for sustainable technologies such as hydrogen production in countries like Finland.