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Europaudvalget 2024
KOM (2024) 0077
Offentligt

EUROPEAN

COMMISSION

Brussels, 14.2.2024

SWD(2024) 78 final

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

“The 2024 Annual Single Market and Competitiveness Report”

{COM(2024) 77 final} - {SWD(2024) 77 final}

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Table of Contents

Annex 1:

Overview of key performance indicators (KPIs) on long-term competitiveness

.................... 2

Annex 2:

Key policy achievements

........................................................................................................ 20

Single Market enforcement action plan

............................................................................................ 20

Industrial Strategy

............................................................................................................................. 29

SME Strategy

..................................................................................................................................... 37

Annex 3:

SME Relief Package

................................................................................................................ 41

Annex 4:

The Single Market at 30

......................................................................................................... 46

Annex 5: Overview of resilience

measures

of key international partners

.......................................... 52

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ANNEX 1

Overview of key performance

indicators (KPIs) on long-term

competitiveness

EU’s long-term

competitiveness requires a forward-looking, well-defined and coordinated EU framework

that can inform the investments decisions for the future. In its communication Long-term competitiveness

of the EU: looking beyond 2030

, the Commission proposes to work along nine mutually reinforcing drivers

to foster competitiveness and defines a set of key performance indicators (KPIs) to track progress towards

the targets and ensure the necessary political focus and responsiveness. Accompanying these nine drivers,

the Commission is working towards a growth enhancing regulatory framework to improve growth.

This annex provides an overview of the selected 19 KPIs

aimed at monitoring progress in each of the

competitiveness dimensions

COM (2023) 168 Final.

The 19 selected KPIs include 2 candidate KPIs selected by the Chief Economist Network of the EU Member States: KPI 15b:

Average test scores for 15-year-olds

(PISA) and KPI 16a Exports of good and services as a share of the rest of the world’s

imports,

These KPIs, as well as additional indicators, are reported in the Single Market and Competitiveness

Scoreboard, available at

The Single Market and Competitiveness Scoreboard | Single Market and

Competitiveness Scoreboard (europa.eu).

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1. A functioning Single Ma rket

KPI 1: Integra tion in the Single Ma rket: trade ov er gross dom estic product ( GDP)

The chart below shows the trend in the

EU’s trade flows in goods and services within the EU and with the rest of

the world as a share of total EU GDP between 1993 and 2022.

Trade is measured by the average of imports and exports.

For both goods and services, trade integration in the EU has more than doubled in the past three decades. In 1993,

trade integration in goods for the 12 EU countries in the Single Market at the time stood at 11.4% of the EU’s GDP.

This gradually increased to 26.3% in 2022 for today’s 27 EU countries. During the

same period, trade integration in

services grew from 2.9% to 7.5%.

The Single Market is the EU’s main source of trade in goods. It is about 60% higher than the EU’s trade in goods

with the rest of the world. Trade in services within the EU remains broadly at the same level as EU trade in

services with the rest of the world, which is about 7.5% of GDP.

The data on extra-EU trade are commented under KPI 16.

Source: Eurostat.

The following chart provides international comparisons, in particular it shows trade flows in goods and services of

several economic blocs, within their bloc and with the rest of the world, as a share of their respective GDP.

This

comparison is purely indicative as it does not take into account the differences between the political set-ups of the

economic areas identified (e.g. unlike the others, the USA is a sovereign state).

Trade is measured by the average of imports and exports.

Apart from the USA internal market for goods, the EU can be considered as substantially more integrated in both

goods and services than the other economic blocs, for which the main source of trade is outside their bloc.

The vertical lines highlight breaks in the time series due to changes in the number of countries in the Single

Market.

It is calculated using 2022 goods data from the Comtrade database and 2021 services data from the WTO.

Due to lack of data, 2021 goods data is used for Laos and Vietnam. There is also no data for internal USA

trade in services.

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Source: Eurostat, World Bank World Development Indicators, UN COMTRADE, U.S. Freight Analysis Network, WTO Balanced

International Trade in Services.

KPI 2: Con formity defi cit (incorrectly transposed directiv es)

The conformity deficit measures the number of transposed Single Market directives for which the Commission has

launched infringement proceedings for incorrect transposition. It is expressed as a percentage of the number of

Single Market directives notified to the Commission as “‘transposed”’ or “‘not

requiring any further implementation

measures’. Only the Court of Justice of the European Union can rule definitively that a directive has not been

transposed correctly, and the Commission is still working on the conformity assessment of a number of notified

national measures. This should be kept in mind when interpreting the conformity deficit statistics.

Conformity deficit of Member States, by Member States as of 5 December 2023: the average conformity deficit

slightly decreased for the first time in 4 years (1.2% down from 1.3% last year).

Source: European Commission.

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2. Access to priva te ca pital a nd investment

KPI 3: Priva te inv estm ent as a share of GDP

This chart shows the trend in private investment (gross fixed capital formation) as a share of

annual GDP for the EU, the UK and the USA. The 2023, 2024 and 2025 values are forecasts.

The data refer to the increase of the capital stock belonging to enterprises and individuals, including

equipment, land, houses and other buildings, and intangibles like R&D. It measures how the private

sector improves its capacity to produce goods, deliver services and increase income in the future.

Private investment in the EU has recovered from its fall during the COVID-19 pandemic. As a share

of GDP, it is currently higher than

the UK and the USA’s. Forecasts indicate further increases in

2023, 2024 and 2025, supported by NextGenerationEU, meaning that the EU economy should

develop faster. However, a challenge to both public and private investment is the tightening of

monetary policy due to higher inflation rates in 2023.

Source: AMECO.

National data on private investment, share of GDP (2022)

BE BG CZ DK DE EE

ES FR HR

CY LV

LT LU HU MT NL AT

PT RO

21.2 14.8 22.1 18.6 19.5 22.4 19.6 10.1 17.3 21.5 15.9 19.3 17.8 17.8 18.2 13.3 22.8 21.9 17.7 21.9 12.7 17.7 20.6 16.2 17.1 20.1 22.3

KPI 4: Venture capita l investm ents as a share of GD P

Venture capital is a form of equity financing particularly relevant for young companies with

innovation and growth potential but untested business models and no track record; it replaces

and/or complements traditional bank finance.

The chart measures venture capital investments in a country as a percentage of the country’s GDP

in 2019 and 2022.

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Countries with the highest values are more effective in attracting venture capital investments.

The venture capital investments to GDP indicator fell in 2022 compared to the previous year. All EU

countries saw a decrease, except Portugal and Croatia. Estonia is still the country with the highest

value in 2022, followed by Luxembourg, Sweden, France, Finland.

The decrease in this indicator was due, in particular, to a reduction in venture capital investments in

the EU, compared to the previous year, caused by the change in economic outlook (i.e interest rate,

inflation). This decrease was mainly the result of the lower volume of later-stage venture

investments (despite an increase in the number of companies that received a later-stage venture

investment).

In comparison to the EU average, the corresponding figures for USA and China respectively are

about 9 and 7 times higher, while UK is slightly above and Japan somewhat below. An overall

downward trend was also observed in China, US, Japan, UK.

Source: Invest Europe, EUROSTAT, OECD, Statista.

3. Public investment a nd infra structure

KPI 5: Public inv estm ent as share of GD P

This chart shows the trend in public investment (gross fixed capital formation) as a share of annual

GDP for the EU, the UK and the USA. The 2023, 2024 and 2025 values are forecasts.

Public investment is a measure of how much money a country spends to increase the value of fixed

assets (for example, road infrastructure, buildings, equipment and intangibles). This investment is

necessary for providing various public services, such as public administration, schools, hospitals,

police and the army. A higher level of public investment leads to more capacity to deliver public

services, resulting in, for example, improved roads, better healthcare and increased public safety.

The share of public investment in GDP increased during 2020, the first year of the COVID-19

pandemic. This increase was the result of more investment in public health and a fall in GDP. In the

EU, public investment is supported by the NextGenerationEU initiative. However, a challenge to both

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public and private investment is the tightening of monetary policy due to higher inflation rates in

2023, which could lead to more restrictive financing conditions.

Source: European Commission, annual macro-economic (AMECO) database.

National data on public investment, share of GDP (2022)

BE BG CZ DK DE EE

ES FR HR

CY LV

LT LU HU MT NL AT

PT RO

2.73 2.30 4.66 3.10 2.60 5.14 2.00 3.56 2.77 3.73 3.77 2.68 2.57 3.90 3.17 4.24 5.39 3.37 3.16 3.39 4.09 2.38 4.33 5.40 3.01 4.13 4.80

4. Resea rch a nd Innova tion

KPI 6: R&D expen diture as a percen tage of GDP

The following chart shows the development of annual R&D expenditure as a percentage of GDP for

the EU, China, Japan, the UK and the USA.

EU R&D intensity grew from 2.12% to 2.27% of GDP between 2015 and 2021. However, it remains

below that of the USA (3.46% in 2021), Japan (3.34% in 2021) and China (2.40% in 2020). With a

gap of 0.73 percentage points, the EU remains some distance from its ambition to raise R&D

intensity to 3% by 2030.

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Source: Eurostat, OECD Main Science and Technology Indicators.

National R&D intensity, share of GDP (2021)

BE BG CZ DK DE EE

EL ES FR HR

CY LV

LT LU HU MT NL AT

PT RO

3.43 0.77 2.00 2.76 3.13 1.75 1.11 1.46 1.43 2.22 1.24 1.45 0.83 0.74 1.11 1.04 1.64 0.65 2.27 3.26 1.43 1.68 0.47 2.13 0.92 2.99 3.40

KPI 7: Num ber of pa tent applicati ons per mi llion inhabi tants

The chart shows: (a) the number of patent applications to the European Patent Office (EPO) by EU

applicants per million population, and (b) the number of patents filed under the Patent Cooperation

Treaty (PCT) per million population by applicants’ country

of residence.

A patent application to the EPO can provide protection in up to 44 countries, including all EU

countries, whereas a PCT patent application can provide protection in the 157 contracting states to

the PCT. The number of EPO patent applications and PCT patent applications should not be directly

compared because each system provides differing geographical scopes of protection.

Patent applications to the EPO by EU applicants grew on average by 1% every year between 2015

and 2022, reaching 151 per million inhabitants in 2022.

The number of PCT patent applications filed by EU applicants remained stable between 2015 and

2020, slightly decreasing between 2020 and 2021 to around 100 per million inhabitants. This

figure is significantly lower than the number of PCT patent applications filed by applicants residing

in Japan (358.87 per million inhabitants in 2021) and the USA (168.99) but higher than in China

(39.03) and the UK (86.20).

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Source: Eurostat (EPO patents), OECD (PCT patents), World bank (population).

National data on the number of patents applications rounded to the unit - EPO (2022)

BE BG CZ DK DE EE IE EL ES FR HR IT CY LV LT LU HU MT NL AT PL PT RO SI SK

224 7 21 453 297 50 225 18 41 161 8 82 46 12 28 531 11 138 387 266 16 30 2 58 9 386 482

National data on the number of patents applications rounded to the unit - PCT (2021)

BE BG CZ DK DE EE IE EL ES FR HR IT CY LV LT LU HU MT NL

AT PL PT RO SI SK FI

115 6 24 255 198 29 176 8 30 106 6 58 42 16 13 451 10 85 222 169 9 19 1 41 7 327 349

5. Energy

KPI 8: Share of en ergy from renewa ble sourc es

This indicator measures the share of energy from renewable sources in gross final energy

consumption. The revised Directive (EU) 2018/2001 on the promotion of the use of energy from

renewable sources (Renewable Energy Directive) sets a binding European Union wide target of

42.5% in 2030, with an indicative top-up of 2.5%.

Renewable energy deployment has been steadily increasing in recent years and the EU has

historically surpassed other major economies in this field. In 2020 energy from renewable sources

represented 22% in gross final energy consumption as compared to shares approximately between

9 and 14% of UK, USA, Japan and China. In 2022, the EU share was 23%. Nonetheless, an increase

of current shares is required in less than a decade to timely achieve the 2030 target (42.5%).

Values for the EU are taken from Eurostat and those for the UK, USA, China and Japan have been provided

by JRC.

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Source: Eurostat, JRC. The UK figure is based on data from Great Britain; thus, it excludes Northern Ireland.

National data on share of energy from renewable sources (2022)

BE BG CZ DK DE EE

EL ES FR HR

CY LV

LT LU HU MT NL AT

PT RO

13.8 19.1 18.2 41.6 20.8 38.5 13.1 22.7 22.1 20.3 29.4 19.0 19.4 43.3 29.6 14.4 15.2 13.4 15.0 33.8 16.9 34.7 24.1 22.9 17.5 47.9 66.0

KPI 9: E lectricity pric es for n on -household consumers

The chart shows non-household retail electricity prices in the EU, UK, USA and Japan. This indicator

gives an idea of energy costs and cost-competitiveness, especially for those industries where

electricity prices make up a significant proportion of total energy costs.

Non-household retail electricity prices in the EU are calculated using Eurostat data, broken down

into two consumption bands. The data are from the first half of 2015 and are measured in euro per

KWh, excluding VAT and other recoverable taxes.

The IC consumption band refers to medium-sized consumers with an annual consumption of

between 500 MWh and 2 000 MWh, i.e the vast majority of small sized enterprises in services and

manufacturing sectors, and gives an insight into affordability.

The ID consumption band refers to large-sized consumers with an annual consumption of between

2 000 MWh and 20 000 MWh, such as in electricity intensive manufacturing sectors, and gives an

insight into international competitiveness. Only this band is used for international comparisons.

Since 2021, average prices in the EU, the UK and Japan have been on a similar clear upward trend.

The latest values are EUR 0.16 per KWh for Japan (in the first half of 2022), EUR 0.21 per KWh for

the EU and EUR 0.28 per KWh for the UK (both in the first half of 2023). However, prices in the USA

(EUR 0.07 per KWh) have remained significantly lower than in the EU, like in most other G20

countries, particularly those with emerging industrial economies.

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Source: Eurostat

‘Electricity

prices for non-household consumers - bi-annual data (from 2007 onwards)’ [NRG_PC_205].

International prices are reported for the USA, UK and Japan, using data from the US Energy Information Administration (EIA),

the UK Department for Energy Security and Net Zero (DESNZ) and the International Energy Agency (IEA).

National data on electricity prices for non-household consumers - IC band (2023 S1)

BE BG CZ DK DE EE

EL ES FR HR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE

0.23 0.15 0.20 0.13 0.22 0.16 0.28 0.21 0.12 0.25 0.29 0.24 0.28 0.15 0.17 0.25 0.30 0.13 0.24 0.26 0.21 0.10 0.33 0.22 0.27 0.10 0.11

National data on electricity prices for non-household consumers - ID band (2023 S1)

BE BG CZ DK DE EE

EL ES FR HR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE

0.22 0.14 0.18 0.14 0.21 0.15 0.24 0.22 0.11 0.22 0.23 0.24 0.27 0.13 0.15 0.23 0.27 0.12 0.25 0.23 0.21 0.09 0.25 0.22 0.25 0.09 0.10

6. Circularity

KPI 10: Circ ula r ma terial us e rate

This indicator

measures the degree of the economy’s circularity by looking at the rate of use of

secondary materials. Secondary raw materials, replacing primary materials in the economy, reduce

pressures on resources and limit waste. A higher rate indicates a higher degree of circularity

Secondary raw materials accounted for only 11.5% of all materials used in the EU economy, slightly

increasing between 2019 and 2022. This suggests that the linear model (no reuse of material) still

prevails, and the EU is far from reaching the aspirational target of 23.4% that requires doubling its

circular material use rate by 2030.

On the right axis, the chart also shows the percentage change since 2019.

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Source: Eurostat.

7. Digita lisa tion

KPI 11: Di gita l intensity in SMEs

The indicator measures the share of SMEs with at least a basic level of digital intensity.

The digital intensity score is based on counting how many out of 12 selected technologies are used

by enterprises. A basic level requires usage of at least 4 technologies. The set of technologies

considered by the indicator can vary between different survey years, depending on the questions

included in the survey (see

DII v1 v2 v3 v4 2015-2023.xlsx (europa.eu)).

In 2022 the share of the SMEs with at least basic level of digital intensity in Member States ranged

between 89.5% and 41.2%, with an EU average of 69.1%. Around 60% of the EU countries show a

value below the EU average. The value of the indicator is still far from the 2030 EU target of 90%,

established by the Digital Decade Policy Programme.

Source: Eurostat: see also:

https://digital-strategy.ec.europa.eu/en/library/2023-report-state-digital-decade

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KPI 12: Di gita l technologi es adoption by com panies

This indicator measures the degree of companies’ adoption of digital technologies: big data, cloud

and artificial intelligence (AI).

The big data series is the percentage of businesses analysing big data from any data source. The

cloud series measures the percentage of businesses purchasing at least one of the following cloud

computing services: hosting a database, accounting software applications, customer relationship

management software, computing power. The AI series measures the percentage of businesses,

employing 10 or more people, using at least one AI technology. The indicator is calculated for all

businesses in manufacturing and service sectors, excluding the financial sector.

The share of EU businesses that have adopted digital technologies was 14% for big data (2020),

34% (2021) for cloud and 8% for AI (2021).

The Digital Decade policy programme set a common target for these three technologies: at least

75% of EU businesses are expected to take up one or more of them by 2030. The chart shows that

just three of the 27 EU countries are close to the target, whereas most countries score very low for

all three technologies.

Source: Eurostat.

8. Educa tion a nd Skills

KPI 13: Adult participa tion in education an d training ev ery y ear (av erage of ma le

and fema le)

This indicator measures the share of adults (25-64 years) that have taken part in an organised

learning activity in the 12 months before the survey. These learning activities can encompass

formal education and training in institutions or activities in non-formal settings such as in-company

training and training purchased on the market or provided by local authorities or other bodies.

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The EU leaders welcomed in 2021 the target, proposed in the

European Pillar of Social Rights

Action Plan, of 60% of adults participating in learning by 2030, with each Member State setting a

national target.

The EU Labour Force Survey (LFS) and the EU Adult Education Survey (AES), both coordinated by

Eurostat ask adults about participation in learning, with slightly different definitions. The LFS is

carried out every 2 years (as of 2022), the AES every 6 years (latest 2016). The chart is based on a

special extraction from the 2016 AES.

The chart shows a large difference in the rate across countries, with 5 countries above 50% and 3

around 10% or less. The EU average is at 37.4%, meaning that about one adult in three participates

in learning over one year. This falls short of meeting the need to keep the EU workforce sufficiently

skilled to harness the digital and the green transitions, which are changing the labour market and

the skill sets required.

Source: Eurostat, 2016 EU Adult Education Survey.

KPI 14: Adult em ploym ent rate

This indicator shows the EU trend in the employment rate of people aged 20 to 64 and compares

the EU rate with other countries.

The employment rate

measures the use of available labour resources and is affected by changes

in the activity

and unemployment

rates. This indicator is sensitive to economic cycles and is also

affected by policies, such as active labour market policies or income support, and inequalities of

opportunities for disadvantaged groups. For individuals, employment is a source of income and

promotes inclusion in society.

In 2022, the EU employment rate was 74.6%. The European Pillar of Social Rights sets three

headline targets. One of them is that at least 78% of the population aged 20 to 64 should be in

The European Pillar of Social Rights in 20 principles - Employment, Social Affairs & Inclusion - European Commission

(europa.eu)

Glossary: Employment rate - Statistics Explained (europa.eu)

Glossary: Activity rate - Statistics Explained (europa.eu)

Glossary: Unemployment - Statistics Explained (europa.eu)

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employment by 2030. The chart shows progress to this target despite a fall in employment during

the COVID-19 crisis.

Employment rates in the EU and the USA follow a broad similar pattern, and rates in the UK and

Japan remained higher between 2015 and 2022. (For international comparison purposes, the chart

uses OECD data for non-EU countries. The definition of employed people might differ slightly and

lead to slight differences in levels

–

see source below).

Source: EU: Eurostat, Labour Force Survey (Statistics | Eurostat (europa.eu) ; Japan, UK, US: OECD, Labour Force Survey.

National data on adult employment rate (2022)

BE BG CZ DK DE EE

FR HR

CY LV

LU HU MT NL AT

PT RO

71.9 75.7 81.3 80.1 80.7 81.9 78.2 66.3 69.5 74.0 69.7 64.8 77.9 77.0 79.0 74.8 80.2 81.1 82.9 77.3 76.7 77.5 68.5 77.9 76.7 78.4 82.2

KPI 15: ICT specialists (average of female a nd ma le, % of em ploy ment)

This indicator measures the share of employed ICT specialists out of total employment. The

definition of ICT specialists is based on the International Standard Classification of Occupations

(ISCO-08) and includes ICT service managers, ICT professionals, ICT technicians, ICT installers and

servicers.

In 2022, the percentage of ICT specialists employed in EU countries was between 2.5% and 8.6%,

with an EU average of 4.60%. Around 56% of EU countries are below the EU average. The indicator

shows a positive trend with constant growth in recent years. However, the target for ICT specialists

to make up 10% of total employment (20 million ICT specialists in absolute terms) seems unlikely

to be met on current trends.

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Source: Eurostat.

National data on ICT specialists (2022)

BE BG CZ DK DE EE IE

EL ES FR HR IT

CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE

5.6 3.8 4.5 5.7 5.0 6.6 6.2 2.5 4.3 4.3 3.7 3.9 4.6 4.4 4.4 7.7 4.1 4.8 7.2 5.0 3.6 4.5 2.8 4.5 4.3 7.6 8.6

Candidate KPI 15a : Av erage test scores for 15 -y ear -olds (PIS A)

This chart shows the PISA scores of 15-year-olds in mathematics, reading and science in 2022,

2018 and 2015.

EU data are the average scores of the 27 Member States, weighted by the number of 15-year-olds

enrolled in education. In 2022, Luxembourg did not participate so is not included in the EU average.

Chinese data come from the following four Chinese provinces/municipalities that participated in

PISA 2018: Beijing, Shanghai, Jiangsu, and Zhejiang. In 2022, China was unable to collect data

because schools were closed during the intended collection period. In PISA 2015, Chinese data came

from Beijing, Shanghai, Jiangsu, and Guangdong.

Overall, EU students underperform compared to their peers in the UK, the USA, Japan and China.

Compared to 2018, EU students performed worse in 2022 in all three disciplines.

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Source: OECD PISA database.

9. Tra de a nd open stra tegic a utonomy

KPI 16: T ra de wi th th e rest of th e world (as share of GD P)

The chart below shows the role played by trade in goods and services between EU Member States

and the rest of the world, as a share of total EU GDP, between 1993 and 2022. Trade is measured

by the average of imports and exports.

In both goods and services, EU trade with the rest of the world has overall increased in the past

three decades. While in 1993 trade in goods for the 12 Member States composing the Single

Market at the time stood at 8.4%

of the bloc’s GDP, it has gradually

increased to 17.6% in 2022 for

today’s EU-27.

During the same period, trade in services went from 2.8% to 7.7%.

The share of extra-EU trade in goods over GDP amounts to approximately two thirds of trade within

the Single Market and has been growing particularly since 2020. As for trade in services with the

rest of the world, it remains broadly at the same level as EU trade in services within the Single

Market.

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Source: Eurostat.

National data on extra-EU trade in goods, share of GDP (2022)

LT LU HU

25.8 23.8 18.6 15.0 18.1 12.8 30.2 19.0 14.4 12.6 12.3 15.1 12.6 14.5 23.8 7.1 21.1 18.2 28.9 14.6 15.3 10.5 10.0 18.1 25.3 14.9 14.3

National data on extra-EU trade in services, share of GDP (2022)

BE BG CZ DK DE EE

LT LU HU MT NL AT PL PT RO

9.0 4.9 4.2 18.0 5.7 8.8 52.1 11.6 4.4 5.7 5.3 2.6 40.8 5.3 6.0 67.1 5.0 49.1 9.3 4.0 4.1 6.4 3.1 4.1 3.0 5.6 8.2

Candidate KPI 16a : E xports of goods and services as a share of th e rest of th e

world’s

imports

The chart shows the exports of goods and services of the EU, the UK, the USA, Japan, and China as

shares of the rest of the world’s imports from 2015 to 2022. This

helps evaluate the relative

importance of exports from the EU and those four countries in the global market. A higher

percentage indicates a more significant role in the global economy, and a lower percentage

suggests a smaller presence.

The indicator is calculated using goods data from the Comtrade database and services data from

the Word Bank’s World Development Indicators. Trade within the EU is not considered in the rest of

the world’s imports or in the EU’s exports. The amount of trade in services within

the EU and from

the EU are estimated using ratios calculated with Eurostat data.

In 2022, EU exports in goods and services accounted for 16.2% and 33.1% of the rest of the

world’s imports, respectively. Among the countries featured in the chart, only China’s goods exports

captured a larger share of its respective applicable market than the EU’s.

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Source: Eurostat.

10.

Regula tory burden

KPI 17: Eas e of regula tory compliance (Burden of gov ernmen t regulati on)

The indicator is measured by tracking replies to the survey question:

‘In

your country, how easy is it

for companies to comply with government regulation and administrative requirements (e.g.,e.g.

permits, reporting, legislation)? (1 = Overly complex; 7 = Extremely easy)’. Higher values indicate a

better performance (i.e.,i.e. less burdensome regulation).

In 2022, stakeholders’ perception of the regulatory burden in the EU was on average 3.8, up from

3.6 in 2021.

The right axis of the chart also indicates the percentage change since 2019. Over the previous 3

years the indicator shows that there have been improvements in 22 Member States.

No data are available for Croatia for 2022.

Source: World Economic Forum.

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ANNEX 2

KEY POLICY ACHIEVEMENTS

Single Market enforcement

action plan

The Single Market is one of

Europe’s

greatest achievements for businesses and individuals.

Nevertheless, Europeans continue to experience barriers that prevent them from fully exploiting the

potential of the Single Market. To address these barriers, The Commission adopted in March 2020

an action plan for better implementation and enforcement of Single Market rules

, which aims at

addressing the barriers that arise from violations of EU law. The action plan is based on a renewed

partnership between Member States and the Commission in their shared responsibility to ensure

that Single Market rules are properly enforced and applied.

This annex presents some of the key achievements of the action plan

COM(2020) 94 final.

Since 2021, the Commission has been publishing an update of the implementation of the actions set up in

the Single Market enforcement action plan as part of the Annual Single Market Report.

kom (2024) 0077 - Ingen titel

The Single Mar ket Enf orc em ent Ta skforc e (S MET)

In order to strengthen implementation and enforcement of Single Market rules on the ground, the

Single Market Enforcement Taskforce (SMET)

was set up in April 2020.

The SMET is an innovative forum, where Member States and the Commission work together in a real

partnership to overcome specific, Single Market barriers. It does not replace other enforcement tools

but complements them by bringing the added value of cooperation and networking. SMET projects

are chosen by consensus after a discussion on priorities identified in reports, workshops and other

exchanges of experiences of Single Market barriers provided by stakeholders.

Examples of achievements by the SMET are already available in several Single Market areas

Member States reviewed more than 800 prior checks for the recognition of professional

qualifications and committed to removing 301 of those considered to be as being disproportionate.

Furthermore, they agreed to implement measures to for addressing 90 country-specific barriers to

permitting for renewable energy projects, with two thirds of the measures to be completed by the

end of 2023. Member States are also advancing well with the implementation of selected good

practices for improving the permit-granting process for renewable energy projects and for

streamlining the administrative requirements for the cross-border provision of services. Exchanges

on the synergies between the SMET and other Single Market tools, such as SOLVIT and the Internal

Market Information System, contribute to improving these tools efficiency. In addition, in September

2023, the SMET launched a new project aiming to address the problem of IBAN discrimination, i.e.

the non-acceptance of IBAN numbers from other EU Member States for payments in euro16.

The SMET regularly informs

the Competitiveness Council and the European Parliament’s Internal

Market and Consumer Protection Committee (first report on 29 September 2021 and the second on

28 November 2022).

To continue working effectively, the SMET will develop further cooperation between the different

parts of national administrations working on Single Market policies. Priority areas for its future work

are related to the major Single Market challenges as indicated that stakeholders have identified,

with a special focus on the green and digital transitions.

The Single Mar ket and Competitiveness Scor eboard

The

Single Market and Competitiveness Scoreboard

is an online tool, providing Member

States, the Commission and other EU policy makers with useful performance-monitoring indicators

on the application of Single Market rules.

In its annual update on 31 January 2023, the Commission updated the Scoreboard to better reflect

the situation of individuals and businesses in the Single Market and to assess the competitive

More information on the SMET is available at

Single Market Enforcement Taskforce (SMET) - The EU Single

Market - European Commission (europa.eu), including all reports published.

SMET report 2022 - 2023.

: https://finance.ec.europa.eu/consumer-finance-and-payments/payment-services/payment-services/iban-

discrimination_en

The Single Market and Competitiveness Scoreboard | Single Market and Competitiveness Scoreboard

(europa.eu).

kom (2024) 0077 - Ingen titel

strengths and weaknesses of the EU and its Member States. Additionally, on 14 July 2023, the

Commission published an intermediate update of the Single Market Scoreboard together with the

Annual Report on Monitoring the Application of EU Law, updating the reporting of the “Enforcement

tools” section of the Scoreboard18.

The new edition of the Scoreboard continues to support the

measuring of Member States’ performance in the areas of the

transposition and enforcement of the

Single Market body of law and the related governance tools. In addition, it sheds light on the key

areas where policies by Member States can impact the business framework conditions (e.g.

administrative, or regulatory burden, public procurement, services). Lastly, it assesses the overall

results achieved by the Single Market as regards integration, competitiveness, and major EU policy

goals (economic resilience, the green and digital transitions).

Following the adoption of the communication

Long-term competitiveness of the EU: looking beyond

2030

adopted on 16 March 2023, the Scoreboard has become the tool to report on the key

performance indicators (KPIs) selected by the Commission and by Member States experts to assess

EU progress on the important competitiveness drivers

. To this end, the Scoreboard has been

renamed to the

Single Market and Competitiveness Scoreboard.

The Inter nal Mar ket Infor mation System (IMI)

The

Internal Market Information System (IMI)

has been connecting authorities across borders

and languages for the past 15 years. It is an online application facilitating and supporting the

administrative cooperation between Member States’ public administrations in currently 19 policy

areas of the Single Market

through 95 administrative procedures. Since 2008, the number of

active authorities in the IMI increased from 400 to 12 500 and the number of information

exchanges from 375 to 585 000.

Annual reports on monitoring the application of EU law - European Commission (europa.eu).

COM(2023) 168 final.

For more information, please see Annex 1 Overview of key performance indicators (KPIs) on long-term

competitiveness.

Homepage

–

IMI-Net

–

The EU Single Market

–

European Commission (europa.eu).

Action 13 Single Market enforcement action plan. Rationalising Single Market IT systems.

kom (2024) 0077 - Ingen titel

In 2022, a new interface linked to IMI for the submission of posting declarations in the road

transport sector and an information exchange to enforce posting rules in that sector was launched.

Since then, road transport operators have submitted 34 million declarations. These operators who

are making use of the simple online procedure and the harmonised uniform content of the uniform

posting declaration available in 23 languages. They are also saving time and resources and

reducing bureaucracy. The portal linked to IMI significantly contributes to the smooth functioning of

the road transport sector in the Single Market.

kom (2024) 0077 - Ingen titel

Declarations submitted

35.000.000

30.000.000

25.000.000

20.000.000

15.000.000

10.000.000

5.000.000

The integration of the Regulated Professions Database

into IMI is being finalised and will be

launched in early 2024. This integration is important for from many reasons: (i) it will result in

improved data quality; (ii) given that IMI already supports many administrative cooperation

procedures in the area of the recognition of professional qualifications, authorities already using IMI

will have access to all relevant modules in one system; and (iii) In addition, the integration also

takes into account the notification requirements introduced under the Single Market Transparency

Directive

and therefore contributes to improved transparency in the area of the recognition of

professional qualifications.

IMI currently supports 19 policy areas:

Regulated Profession Database (europa.eu).

EUR-Lex - 310304_1 - EN - EUR-Lex (europa.eu).

kom (2024) 0077 - Ingen titel

SOLVIT

is a network of national centres

, designed to help businesses and individuals get the best

out of the EU Single Market. Created in 2002, it provides an alternative and informal approach to

solving a dispute without the need to consult a lawyer or go to court. SOLVIT centres, based in

national administrations, are tasked with acting as channels of communication channels between

and within Member State authorities. They aim to find swift and pragmatic solutions to problems

that people and businesses encounter with public authorities and decision-makers when exercising

their rights under Single Market rules

From 10 March 2020 (adoption date of the Single Market enforcement action plan) up to

10 November 2023 November 23, SOLVIT has dealt with more than 8 800 cases of which more

than 80% were resolved for European people and businesses.

SOLVIT is a service provided by the national administration in each EU country and in Iceland, Liechtenstein

and Norway.

COM (2001) 0702 final.

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SOLVIT continues to further deepen the cooperation with other European networks and

organisations, such as the Enterprise Europe Network and the European Labour Authority. SOLVIT

continues dealing with the cases linked to the principle of mutual recognition of goods lawfully

marketed in another Member State and will contribute to the evaluation of the Regulation on the

mutual recognition of goods lawfully marketed in another Member State

, which takes place in

2024.

The SOLVIT database (SOLVIT IMI Application) is being revamped. Besides facilitating better case

handling, another important feature will be the creation of a repository for recording systemic

issues (structural and recurrent cases detected via SOLVIT cases).

This will ensure an easier access to and an overview of systemic issues, allowing for more efficient

reporting to policy makers. In addition, work is ongoing to improve the visualisation of SOLVIT data.

In March 2023, the Commission proposed a benchmark for Member States to solve a minimum of

90% of the cases received through SOLVIT within 12 months

This 90% resolution rate is applies to Member States when their SOLVIT centre is acting as lead

centre (i.e. the centre in the country of the authority that created the problem). The ability to solve

the cross-border case received by SOLVIT and comply with the 90% benchmark depends on

numerous many factors. These factors include: (i) cooperation with the home centre; (ii) the

willingness of Member States’ authorities to cooperate with

SOLVIT; (iii) the nature of the case; and

(iv)

its authority/place in the Member States’ national

administrations.

When a case cannot be solved informally through SOLVIT, it is up to the Member States to take the

necessary measures to solve the case using through other means to solve the case.

This new benchmark is monitored and published in the annual Single Market and Competitiveness

Scoreboard.

EUR-Lex - 32019R0515 - EN - EUR-Lex (europa.eu).

The single market at 30, (COM(2023) 162).

kom (2024) 0077 - Ingen titel

Your Europe port al

Your Europe

, the official web portal of the Single Digital Gateway (SDG) since 2020, supports

SMEs’

competitiveness by providing a one-stop- shop for reliable administrative and regulatory

information, assistance services (e.g. SOLVIT) and online procedures at all levels of public

administration across the EU.

As part of the 2023 SME Relief Package

, the first implementation report on the SDG

outlined the

SDG’s

very promising start and what would be done to deepen its impact. About 100 million visits to

Your Europe and its associated national websites are registered every year, and 1.2 million business

cases have been taken on by the assistance services so far, with an over 90% satisfaction rate of

over 90%.

In December 2023, the Commission in close cooperation with Member States launched the core

infrastructure of the ‘Once-Only Technical System’ (OOTS) making it much easier for citizens and

SMEs to request or submit official documents required for an administrative procedure (e.g.

certificates or permits). With the following gradual onboarding of 80 000 national competent

authorities, SDG and Your Europe will keep helping businesses, notably SMEs, to cut red tape and to

fully benefit from the Single Market. At the same time, Member States supported by the

Commission work for the last important milestone: to offer fully online digital administrative

procedures needed by citizens and businesses when they want to move or do business in another

EU country.

Guidanc e t ools f or nationa l aut horities a nd businesses

In December 2022, the Commission published practical and up-to-date

guidance to help EU

countries with the application of important pieces of EU law in the area of the Single

Market for services

. The guidelines respond to demands requests by Member States and also by

stakeholders to support the application of the Services Directive

. They strengthen EU and national

efforts for a consistent and robust application of these central pieces of legislation and thus

improve the EU Single Market.

The

updated Handbook on the implementation of the Services Directive

provides easily

accessible and specific guidance on the day-to-day application of this important directive. The

previous Commission Handbook from 2007 was widely appreciated as an efficient tool assisting

Member States in the implementation of the Services Directive. Changes in the European Court of

Justice’s case law, policy developments,

and new legislation and market developments feed into

this new edition, making it a state-of-the-art reference tool.

https://europa.eu/youreurope/index_en.htm

COM(2023) 535 final.

COM(2023) 534 final.

Single Market for services webpage.

Directive 2006/123/EC.

EUR-Lex - 32006L0123 - EN - EUR-Lex (europa.eu).

The Handbook was updated in 2022:

Implementation (europa.eu).

kom (2024) 0077 - Ingen titel

The

Guidance on the assessment of proportionality pursuant to the Proportionality Test

Directive

–

published in December 2022

–

supports national authorities in carrying out

proportionality assessments of new national regulations before their adoption that restrict access to

professions or the exercise of them. This covers, for instance, rules restricting advertising, limiting

the use of corporate structures to exercise a profession or mandatory membership in professional

bodies. A thorough, evidence-based and Single-Market-oriented assessment of proportionality of

national regulations before they are adopted greatly benefits the Single Market and reduces the

need to resort to enforcement action. This directive is part of the increased emphasis put on

prevention. To reap its full benefits, it is important that the directive is translated into strong ex-

ante proportionality assessment procedures before adoption at national level and that the

proportionality criteria are correctly understood and applied. The guidance explains the logic of this

new preventative approach and provides specific

concrete examples of do’s and don’ts when

evaluating proportionality.

Furthermore, to facilitate the notification of measures related to different notification obligations in

the area of services (Services Directive, Professional Qualifications Directive/Proportionality Test

Directive), the Commission aligned the

information on proportionality

under the different

notification systems. Improvements to the notification form will guide better the users better by

essentially providing on-screen instructions on the information that Member States should provide

about the notified requirements. These changes to the notification form should also significantly

improve transparency: they will help users understand the reasons that led Member States to adopt

such measures in the area of services and reduce the need for follow-up questions due to missing

information or a lack of unclarity after notifications have been sent.

Directive (EU) 2018/958.

EUR-Lex - 4353947 - EN - EUR-Lex (europa.eu).

Services Directive Handbook/Proportionality Test Directive Guidance (europa.eu).

kom (2024) 0077 - Ingen titel

INDUSTRIAL STRATEGY

The Commission’s updated

industrial strategy of May 2021

seeks to drive the transformation to a

more sustainable, digital, resilient and globally competitive economy, while responding to the

lessons learnt from the COVID-19 crisis to boost the recovery and strengthen the

EU’s

open

strategic autonomy. It proposes measures to strengthen the resilience of the Single Market,

especially in times of crisis

. It addresses the need to better understand our dependencies in key

strategic areas and presents a toolbox to address them. It offers new measures to accelerate the

green and digital transitions. It also responds to calls to identify and monitor the main indicators of

the competitiveness of the EU economy as a whole: Single Market integration, productivity growth,

international competitiveness, public and private investment and R&D investment.

This annex presents some of the key achievements of the industrial strategy

COM(2021) 350 final.

See also the June 2023 joint communication on “European economicsecurity strategy”, JOIN(2023) 20 final

Since 2021, the Commission has been publishing an update of the implementation of the actions set up in

the March 2020 industrial strategy and its update in May 2021 as part of the Annual Single Market Report.

This annex summarises some of the key achievements of the strategy.

kom (2024) 0077 - Ingen titel

STRENGTHENIN G SINGLE MAR KET R ESILIEN CE

Single Market Emergency Instrument (SMEI) / Internal Market Emergency and

Resilience Act (IMERA)

The Single Market is central to functioning supply chains, for the free movement of people and the

access to services and goods, especially in difficult times. However, the existing rules and tools for

the Single Market are insufficiently adaptable to handle crises and emergencies effectively.

Therefore, the Commission proposed a Single Market Emergency Instrument (SMEI)

on 19

September 2022. The SMEI will ensure greater transparency and coordination when a critical

situation emerges and will help mitigate the any harmful impacts on the Single Market, safeguard

the free movement of people, goods and services and maximise the availability of products needed

in the a crisis response.

The SMEI aims to establish create a comprehensive preparedness and crisis response architecture

made up of the main features described below.

•

governance body

to ensure adequate coordination and advise the Commission on the

appropriate measures for preventing or addressing the impact of the crisis on the Single

Market.

framework for contingency planning:

this will ensure arrangements for crisis

protocols, trainings and simulations, as well as an early warning system for any incidents

that could disrupt the functioning of the Single Market.

framework for Single Market vigilance:

this will be the framework for impacts of

incidents whose impact has not yet led into a full-blown Single Market emergency. It will

and include a set of vigilance measures, such as monitoring of the supply chains of goods

and services of strategic importance.

framework for Single Market emergencies:

this will include measures for re-

establishing and facilitating free movement, a list of prohibited restrictions of free

movement rights during a Single Market emergency, measures to improve transparency and

the possibility for the Commission to procurement of crisis-relevant goods by the

Commission on behalf of Member States.

•

A number of exceptional measures are included in the emergency framework to ensure the

availability and supply of crisis-relevant goods that require additional (dual) activation: requests for

information from economic companies, calls for priority rated requests and targeted derogations of

harmonised product legislation (contained in the accompanying omnibus proposals).

It is expected that the proposal for the SMEI (renamed IMERA) and the accompanying omnibus

proposals

will be adopted by Parliament and Council the co-legislators in 2024, based on a

provisional political agreement reached on 1 February 2024

COM(2022) 459 final.

Proposal for a Regulation

establishing a Single Market Emergency Instrument and repealing Council

Regulation (EC) 2679/98;

proposal for a Regulation

for the laying down measures to facilitate the supply and availability of crisis-

relevant goods in the context of a Single Market emergency and amending Regulation (EU) 2016/424,

Regulation (EU) 2016/425, Regulation (EU) 2016/426, Regulation (EU) 2019/1009;

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DEALING WITH STRATEGIC DEP END ENCIES: O PEN STRATEGIC

AUTONO MY IN PR ACTIC E

Monitoring the EU’s foreign strategic dependencies

The EU becomes more resilient from being open and integrated in global value chains (i.e. through

cost reduction, economies of scale, risk reduction, access to foreign inputs). However, supply chains

are subject to a risk of disruptions, which are likely to affect products and inputs that are

particularly critical for the EU’s society and economy. Events such as the COVID-19

pandemic, the

Russian’s

full-scale

invasion of Ukraine and the energy crisis have exposed limits to supply

chains’

resilience.

Countries all over the world and the EU have started to address tackle challenges to their economic

security, including the EU. The recent communication on a European economic security strategy

aims to minimise the risks associated with specific economic flows amidst heightened geopolitical

tensions and rapid technological changes, and maintaining high levels of economic openness and

dynamism. The strategy intends to

promote

EU’s competitiveness;

protect

our economic

security through a range of policies and tools, including strengthening our toolbox where needed;

and to build

partnerships

with the broadest possible range of countries globally. It identifies four

risk categories as priorities for intra-EU risk assessment in the areas of:

•

Supply chain resilience

Critical infrastructure

Technology security and security-relevant technology leakage

Weaponisation of economic dependencies and economic coercion

The Commission has already adopted data-driven methodologies to identify EU strategic

dependencies across sensitive industrial ecosystems

and those dependencies subject to single

point of failures or choke points, which are more likely to become vulnerable areas for the

EU’s

economic security. In 2021, the Commission carried out a first analysis of Europe’s strategic

dependencies

, developing a novel bottom-up assessment of product dependencies

. It reviewed

more than 5 000 products imported by the EU, and identified those that relied too much on foreign

sources, were significantly scarce in the EU, and had limited potential for domestic substitution. It

proposal for a Directive

amending Directives 2000/14/EC, 2006/42/EC, 2010/35/EU, 2013/29/EU,

2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU,

2014/53/EU and 2014/68/EU and introducing emergency procedures for the conformity assessment, adoption

of common specifications and market surveillance in the context of a Single Market emergency.

SMEI / IMERA: Council and Parliament strike a provisional deal on crisis preparedness -

Consilium (europa.eu)

JOIN(2023) 20 final.

Sensitive industrial ecosystems relate to areas affecting security and safety, the health of Europeans as

well as the ability to access goods, services and technologies that are key for the green and digital transitions

at the core of the EU’s priorities.

SWD(2021) 352 final.

A product is considered as foreign dependent if it fulfils three criteria: 1) the bulk of non-EU imports

originates in less than three foreign countries;, 2) non-EU imports are at least half of the total EU imports;,

and 3) non-EU imports are higher than total EU exports.

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was accompanied by a the first wave of in-depth reviews on six strategic areas

where the EU

faces dependencies. The Commission published a second wave of in-depth analyses of

dependencies

in five key areas

in 2022, and updated its bottom-up methodology in 2023.

The latest analysis carried out by the Commission identifies 204 dependent products in sensitive

industrial ecosystems

. About 20% of those face significant additional risks due to global single

points of failure (SPOFs), which refer to vulnerable geographical points

. In other words, dependent

products subject to SPOFs are particularly vulnerable and at risk of being weaponised for

geopolitical purposes given their particularly limited potential for diversification. The disruption at

these points could result in failures across entire global supply chains.

The various assessments carried out by the Commission in the identified critical areas underpinned

targeted policy actions to mitigate and reduce identified risks within the sectors concerned.

Examples include legislative initiatives such as the European Chips Act, proposed in 2022 by the

Commission, and the European Critical Raw Materials Act and the Net-Zero Industry Act, both

proposed in 2023.

Legislative initiatives move in parallel with the openness agenda of the EU

, aiming to leverage

international trade to:

•

increase efficiency of EU companies by connecting them to growth poles and creating

economies of scale;

improve the access to the inputs needed for the green transition; and,

increase the resilience of supply chains by diversifying and securing sources of supply.

In 2023, the Commission also published a Union List of Critical Medicines

, to foster the security of

supply of medicines considered as critical. In addition, recently launched international partnerships

on sustainable raw materials (for example, with Canada and Ukraine in 2021, Namibia and

Kazakhstan in 2022, and Argentina and Chile, Democratic Republic of Congo, Zambia, Greenland

and Rwanda in 2023) and ongoing industrial alliances will help make supply chains more diversified

and resilient, both for the EU and its partners. These measures underscore the

Commission’s

commitment to proactively curb foreign harmful foreign dependencies and boost resilience in

strategic areas.

Raw materials, batteries, active pharmaceutical ingredients, clean hydrogen, semiconductors and cloud and

edge technologies.

SWD(2022) 41 final.

Rare earths and magnesium, chemicals, solar panels, cybersecurity and IT software.

The underpinning methodology was updated in 2023 to reflect the latest data developments:

An enhanced

methodology to monitor the EU’s strategic dependencies and vulnerabilities (europa.eu).

Among the 204

products, 64 come from China, 38 from US and 15 from Russia. In import values, China is a main source of

strategic dependencies. Examples of dependent products include cell phones and laptops (China), turbines and

certain vehicle types (US), and iron, steel and coal (Russia).

SPOFs occur when: 1) world production is concentrated in a single country;,

and 2) that country’s production

is central to many other countries in an international trade network.

Trade agreements also contribute to the EUs openness agenda: for example the recently signed trade

agreements with New Zealand, Chile, and Kenya, together with the EU commitment to push forward with

negotiations with Australia, India, Indonesia and Thailand and to finalise agreements with Mercosur and

Mexico.

Availability of critical medicines | European Medicines Agency (europa.eu)

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European Chips Act

The

European Chips Act

entered into force on 21 September 2023. It strengthens the

semiconductor ecosystem and strengthens manufacturing activities in the EU, ensures the resilience

of supply chains and supports scale-up and innovation across the whole value chain, and reduces

external dependencies. It is built on three pillars that summarise the strategy: (1) Chips for Europe

initiative; (2) security of supply and (3) monitoring and crisis response.

Pillar 1, the Chips for Europe initiative, aims to support large-scale technological capacity building

and innovation in the EU. The initiative supports the development of pilot lines to prototype and

scale up innovation, to bridge from the lab to the fab. The first call under the initiative, setting up

four pilot lines, was published by the Chips Joint Undertaking in December 2023. As of 2024, the

initiative will also support design capacity and a network of competence centres across the EU.

Pillar 2 focuses on the security of supply of semiconductors in the EU. The approach aims to attract

investments and improve production capacity in semiconductor manufacturing as well as advanced

packaging, test and assembly. Since the publication of the Chips Act proposal in February 2022,

investments of over EUR 100 billion in investment in manufacturing capacity have been announced,

including for advanced cutting-edge manufacturing facilities. The second microelectronics Important

Project of Common European Interest was approved in 2023. With a budget of EUR 21 billion (of

which EUR 8.1 billion is public funding), it supports innovative, state-of-the-art industrial projects by

56 companies in 68 projects across 14 Member States.

Pillar 3, monitoring and crisis response, enables the EU to anticipate future chips crises and tackle

them by closely coordinating with Member States, through the European Semiconductor Board,. It

also and equips the EU with the instruments and measures needed to ensure supply to critical

sectors in case of severe shortages. Supply chains and critical bodies in Member States have been

identified. The Semiconductor Alert System was set up to allow stakeholders to flag critical

disruptions along semiconductors supply chains.

Furthermore, international collaboration on semiconductor policies takes place is established via the

trade and technology councils with the USA and India, and via digital partnerships with Japan,

Korea, Singapore, and Canada. Cooperation is focused on monitoring supply chains, subsidy

transparency, skills, and research collaboration in research.

European Critical Raw Materials Act (CRMA)

In March 2023, the Commission proposed the

European Critical Raw Materials Act (CRMA)

, a

comprehensive set of measures to ensure the

EU’s

access to a secure, diversified, affordable and

sustainable supply of critical raw materials. In November 2023, the European Parliament and the

Council reached a political agreement on the Act.

Critical raw materials are essential for many strategic sectors, including the net-zero industry, the

digital industry, and the aerospace and defence sectors. The EU is heavily dependent on critical raw

materials from a number of non-EU countries. This dependency, combined with the growing global

demand due to the shift towards a digital and green economy makes supply chains vulnerable.

European Chips Act | Shaping Europe’s digital future (europa.eu).

This initiative comprises a

regulation

and a

communication.

The regulation sets a regulatory framework to

support the development of domestic capacity and strengthen the sustainability and circularity of the critical

raw material supply chains in the EU. The communication proposes measures to support the diversification of

supply chains through new international mutually supportive partnerships.

kom (2024) 0077 - Ingen titel

The European Critical Raw Materials Act

will strengthen the

EU’s critical raw materials

capacity

along all stages of the value chain. It aims to: (i) increase our resilience; (ii) diversifying

the EU’s

imports and reduce strategic dependencies; (iii) increase preparedness and improve the

EU’s

capacity to monitor and mitigate risks of disruptions to the supply of critical raw materials; and (iv)

promote supply chain sustainability and circularity. Circular economy solutions are crucial to

promote recovery and recycling of materials, use of secondary raw materials, decrease the

dependence on imported raw materials, and strengthen the resilience and strategic autonomy.

Net-Zero Industry Act

In March 2023, the Commission also proposed the

Net-Zero Industry Act

, to help strengthen the

European manufacturing capacity of net-zero technologies and overcome barriers to scaling up this

capacity. A provisional political agreement has been reached by the European Parliament and the

Council on 6 February 2024.

The measures in the Act will increase the competitiveness of the net-zero technology industrial

base and improve the EU’s energy resilience. By accelerating the development and production of

net-zero technologies, the Act also aims to reduce the risk of replacing EU reliance on Russian fossil

fuels with other strategic dependencies that might hinder our access to key technologies and

components for the green transition.

Together with the proposal for a European Critical Raw Materials Act and the reform of the

electricity market design

, the Net-Zero Industry Act sets out a clear European regulatory

framework to reduce the

EU’s

reliance on highly concentrated imports. The proposals also aim to

create a predictable and simplified regulatory environment for net-zero industries, as announced in

the Green Deal industrial plan

. By drawing on the lessons learnt from the COVID-19 pandemic and

the energy crisis sparked by

Russia’s full-scale

invasion of Ukraine, it will help

make Europe’s

clean

energy supply chains more resilient.

European industrial alliances

Industrial alliances play a significant role in achieving key EU policy objectives, by revealing

opportunities and bottlenecks and setting up joint action to address them. They serve as a platform

to attract private investors, build up pipeline projects and discuss new business partnerships in an

open and transparent way. They bring together a wide range of stakeholders from entire value

chains (including the public, and private sectors and civil society), to help contribute to the delivery

of EU policy objectives. Alliances are significant delivery vehicles for different Commission

strategies (e.g. the hydrogen strategy, the Net-Zero Industry Act and the European Critical Raw

Materials Act).

The following alliances have been launched since 2017 and are operational to date

: the European

Battery Alliance, the Circular Plastic Alliance, the European Raw Materials Alliance, the European

Clean Hydrogen Alliance, the Alliance for Industrial Data, Edge and Cloud, the Renewable and Low-

Critical Raw Materials Act (europa.eu).

Net Zero Industry Act (europa.eu).

Reform of the EU electricity market design (europa.eu).

The Green Deal Industrial Plan (europa.eu).

https://single-market-economy.ec.europa.eu/industry/strategy/industrial-alliances_en

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Carbon Fuels Value Chain Industrial Alliance, the Alliance for Zero-Emission Aviation, and the

European Solar Photovoltaic Industry Alliance

The

European Battery Alliance (EBA)

has also played a central enabling role in delivering on the

2018 strategic action plan on batteries. For example, e.g. the number of announced lithium-ion

gigafactories increased from 26 to 30, i.e. around 70 GWh of installed capacity by the end of 2022.

The European Battery Alliance also directly supports SMEs as part of the European Battery Alliance

EBA Business Investment Platform process, to accelerate their project development.

The

Clean Hydrogen Alliance

has reached a total of 1 755 members, including 541 SMEs. The

Alliance also contributes to the work of the High-Level Forum on European Standardisation (which

was set up as a follow-up to the new EU standardisation strategy); for example, the Alliance

prepared a roadmap on hydrogen standardisation.

A more recent alliance, the

Alliance for Zero-Emission Aviation

is the only organisation bringing

together all the different stakeholders (EU and non-EU) of the aviation ecosystem (it has 150

members). To achieve the decarbonisation of aviation technologies, the

Alliance’s

objectives span

over more than 15 years, starting with drawing up a roadmap for the entry into operation of

electric- and hydrogenpowered aircrafts.

ACCELERATING THE TWIN TRANSITIONS

Transition pathways

The updated European industrial strategy

announced the creation of transition pathways for the

most relevant industrial ecosystems. This is as a co-creation between the Commission, Member

States, industry and other stakeholders to identify the actions needed to achieve the twin

transitions, giving a better understanding of the scale, benefits and conditions required. They form

‘actionable

plan in favour of sustainable competitiveness’. They address key elements such as

infrastructure; investments and funding; regulation and public governance; research and innovation,

techniques and technological solutions; skills; the social dimension; and sustainable

competitiveness. Plans also take into account the industrial technology roadmaps, a core action in

the new European Research Area strategy

, that also supports the twin transition through

guidelines for knowledge valorisation

, including the promotion of standardisation and intellectual

assets management in research

The work on transition pathways

started in June 2021 and since then it has progressed steadily

for all relevant ecosystems concerned since (9 industrial ecosystems developing 10 transition

The Alliance on Processors and Semiconductor Technologies was launched in 2021, but it is not yet

operational.

COM(2021) 350 final.

COM(2020) 628 final

Council Recommendation (EU) 2022/2415 of 2 December 2022 on the guiding principles for knowledge

valorisation

Commission Recommendation (EU) 2023/499 of 1 March 2023 on a Code of Practice on the management

of intellectual assets for knowledge valorisation in the European Research Area and

Commission Recommendation (EU) 2023/498 of 1 March 2023 on a Code of Practice on standardisation in

the European Research Area

EU Transition Pathways (europa.eu).

kom (2024) 0077 - Ingen titel

pathways). Five transition pathways have been published and are being implemented (Tourism,

Proximity & Social Economy, Chemicals, Construction, and Textiles), one is upcoming (Mobility), and

four transition pathways launched consultations in July 2023 (Aerospace & Defence, Agri-food,

Metals, and Retail). To help this work, the Industrial Forum

prepared a common blueprint, which

and sets out key elements and considerations for the creation of pathways.

Each pathway follows a process of information gathering, pre-consultation, preparation, publication

and implementation, in an open and collaborative way open to all stakeholders. The process

involved is not only a co-creation process but also co-implementation to support the industrial

ecosystem in the twin transitions.

Lastly, the European Monitor of Industrial Ecosystems project

aims to analyse the green and

digital transformation of industrial ecosystems and progress made over time. The focus is on 14

industrial ecosystems and 15 green and digital technology groups that are analysed from different

perspectives.

European Monitor of Industrial Ecosystems (europa.eu)

kom (2024) 0077 - Ingen titel

SME STRATEGY

In March 2020, the Commission adopted the SME strategy for a sustainable and digital Europe

. Its

aim was to unleash the power of

Europe’s

SMEs to lead the twin transitions. Many new challenges

have emerged for SMEs since the adoption of the SME strategy. As a result, the priorities identified

in the strategy have only gained in importance: digitalisation helped SMEs weather the COVID-19

pandemic, and sustainable practices helped them lower their energy bills in periods of high inflation.

To support SMEs even beyond the actions contained in the SME Strategy, the Commission adopted

an SME Relief Package in September 2023

(see Annex 3a).

This annex presents some of the key achievements of the 2020 SME strategy.

COM(2020) 103 final.

COM(2023) 535 final.

kom (2024) 0077 - Ingen titel

CAP ACITY BUILDI NG AND SUPPOR T FOR THE TWIN TRANSITIONS

Competitive sustainability is Europe’s guiding principle for the future. Achieving a climate neutral,

resource efficient and agile digital economy requires the full mobilisation of SMEs. Many actions

under the SME strategy supported SMEs in reaping the full potential of the twin transitions. In

January 2022, the new Enterprise Europe Network, including the sustainability advisers, took up its

work

. Moreover, the Digital Innovation Hubs

, the digital crash courses and the intellectual

property action plan

helped SMEs access new digital technologies.

SMEs can benefit from over EUR 45 billion under the Recovery and Resilience Facility

(of which EU

countries must dedicate at least 20% to the digital transition and 37% to the climate transition).

EUR 300 million have has been made available to SMEs to encourage breakthrough innovations

delivering Green Deal objectives under the European Innovation Council. In addition, to help SMEs

find skilled employees, the Skills Pact was launched in 2020

. In 2021, the European Institute of

Innovation and Technology (EIT) has put more than EUR 100 million funding in more than 1670 pre-

seed and seed start-ups and scale-ups in strategic sectors, which has attracted nearly EUR 1.9

billion in investment.

The EIT’s Regional Innovation Scheme (RIS)

has so far supported more than

900 start ups in modest to moderate innovation countries since its creation. By the end of 2025,

the EIT will have hubs in all RIS-eligible areas.

REDUCING

ACCESS

REGU LATORY

BURDEN

AND

IMPRO VING

MAR KET

European SMEs perceive legislation to be complex and burdensome, especially due to the different

procedures in Member States. These barriers deter many of them from doing cross-border business

and scaling up. To reduce regulatory burden, the Commission has introduced the SME filter

identifying legislation of particular relevance for SMEs, and has set up the Single Market

Enforcement Task Force

The Single Digital Gateway, accessible through the Your Europe portal, was implemented and

facilitates online access to information, administrative procedures, and assistance services that

people and businesses may need in another EU country. Following up to the SME Strategy

, the

https://een.ec.europa.eu/about-enterprise-europe-network/advice-support/sustainability

https://european-digital-innovation-hubs.ec.europa.eu/home

COM(2020) 760.

https://ec.europa.eu/economy_finance/recovery-and-resilience-

scoreboard/assets/thematic_analysis/3_SME.pdf

https://pact-for-skills.ec.europa.eu/index_en

Since its creation, the EIT’ supported start-ups

and scale-ups have attracted EUR 5.8 billion in investment.

You can consult the EIT Business Creation Catalogue here:

https://eit.europa.eu/sites/default/files/final_-

_accepted_tc_-_bc_catalogue_2022-23_2.pdf.

More information about the EIT:

https://eit.europa.eu/

https://eit.europa.eu/activities/eit-regional-innovation-scheme-ris-closing-innovation-divide-europe

COM(2020) 94 final.

In which the Commission committed to consult and assess the need for additional company law measures

to facilitate cross-border expansion and scale-up by SMEs.

kom (2024) 0077 - Ingen titel

Commission adopted a proposal to further digitalise company law

in March 2023, with a view to

supporting SMEs and reducing administrative burden on companies. The proposal will reduce or

remove formalities in cross-border situations and is expected to cut administrative burden for

companies by around EUR 437 million per year thanks to, amongs others, the multilingual EU

Company Certificate, removing the apostille for company documents and

applying the “once-only

principle” for setting up cross-border

subsidiaries and branches. The Commission also helped set up

an Early Warning Europe Mentor Academy that created a training programme for business mentors

working with companies in financial distress.

To support start-ups, a joint Member State declaration for a European Start-up Nations Standard

was launched in March 2021, and the Europe Startup Nations Alliance has been operational since

July 2022

. The European Blockchain Regulatory Sandbox has fostered dialogue and cooperation

by allowing making it possible for developers to present their business cases and discuss legal

guidance with regulators. The aim is to remove legal and regulatory uncertainties for use cases

based on decentralised blockchain solutions.

Furthermore, to help SMEs engage in markets beyond the EU, the Access2Markets’ (A2M)

information portal has been launched

, and the Erasmus for Young Entrepreneurs Global scheme

was extended in March 2021 to six non-European destinations. Since the adoption of the SME

strategy, the Commission has also adopted the long-term competitiveness strategy in March 2023

and has committed to reducing the burden of reporting obligations by 25% without compromising

any policy objectives, such as social or environmental imperatives. In addition, the Commission

provides support to Member States through the Technical Support Instrument, to improve the

business environment.

IMPROVING ACCESS TO FIN ANCING

Access to finance is essential for SMEs to finance the investment needs for the transition. However,

at all stages of development, small businesses struggle more than large enterprises to get finance.

Therefore, the Commission included, within the InvestEU programme, the SME window

, aiming at

guaranteeing lending and equity support to EU SMEs and small midcaps. Since the signature of the

InvestEU Guarantee Agreement in 2022 with the European Investment Bank Group, and notably the

European Investment Fund, more than 1,800 SMEs and small mid-caps received over EUR 800

million in debt and equity financial support, which helped them improve their competitiveness,

benefit from solvency support and foster their innovation, digitalisation and transition to

sustainability. The SME Window includes measures aiming at e.g. favouring the access of SMEs to

public equity markets via the “IPO initiative”, providing scaling up financing through the ESCALAR

initiative

, supporting green tech and gender-smart finance initiatives. In addition, the State aid

rules to promote risk finance investments have been simplified , and some of their key concepts

clarified.

Some of these actions (e.g., ESCALAR, gender-smart financing) and others aimed at

COM(2023) 177 final.

https://startupnationsstandard.eu/

https://trade.ec.europa.eu/access-to-markets/en/home

https://eyeglobal.eu/

https://single-market-economy.ec.europa.eu/access-finance/investeu/investeu-fund-sme-window_en

Link to the ESCALAR call for expression of interest:

https://www.eif.org/InvestEU/escalar-call-for-expression-

of-interest/index.htm

See in particular Communication from the Commission

–

Guidelines on State aid to promote risk finance

investments, OJ C508, 16.12.2021; Communication from the Commission

–

Framework for State aid for

kom (2024) 0077 - Ingen titel

facilitating access to finance for young and innovative companies, particularly deep tech scale-ups,

are in the process of being implemented as part of the New European Innovation Agenda, which

was adopted by the European Commission in July 2022. Over the last year, the European Innovation

Council Fund has taken more than 150 investment decisions into deep-tech companies, worth

around EUR 1 billion. Over 50 of the EIC companies have already completed their investment rounds

leveraging approximately 3.5 Euro of additional equity investment for every Euro of EIC

investment.

GOVERN ANCE

The SME strategy needed commitment and actions at both EU and national levels. The SME Envoy

Network, which brings

together the Commission, Member States’ SME policy makers and SME

organisations, has been essential in exchanging best practices on SME support, and in identifying

SME-relevant policy initiatives through the SME filter. The EU SME Envoy was appointed on 31

January 2024

, as reiterated in the SME Relief Package

adopted in September 2023.

research and development and Innovation, OJ 2022/C 414/01; Commission Regulation (EU) 2023/1315

amending Regulation (EU) No 651/2014 declaring certain categories of aid compatible with the internal

market in application of Articles 107 and

108 of the Treaty (“GBER”), OJ L 167, 30.6.2023.

On 31 January 2024, Markus Pieper was appointed as EU SME Envoy. He will report directly to President

Ursula von der Leyen. Mr Pieper will take office in the Directorate-General for Internal Market, Industry,

Entrepreneurship and SMEs (DG GROW) and he will also report to the Commissioner for Internal Market on all

SME-related activities. The date of effect of his appointment will be determined later.

COM(2023) 535 final.

kom (2024) 0077 - Ingen titel

ANNEX 3

SME RELIEF PACKAGE

Policy tracker

COM (2023) 535 final.

kom (2024) 0077 - Ingen titel

STAT

ACTION

DESCRIPTION

In September 2023, the Commission proposed a

Directive establishing a Head Office Tax System for

SMEs

. This gives SMEs operating cross-border

through permanent establishments the option to

deal with only one tax administration, instead of

having to comply with multiple tax systems.

The proposed Directive is now being discussed by

the co-legislators and agreed by the European

Parliament and the Council to reach an agreement

before its adoption and entry into force.

Action 1:

propose a tax simplification

directive establishing a Head Office Tax

System for SMEs

MAKING THINGS EASIER FOR SMEs

Action 2:

systematically consider specific

2024

SME-friendly provisions in new legislative

proposals, where appropriate, justified and in

line with Union EU policy objectives

Action 3:

appoint a dedicated EU SME Envoy

reporting directly to the President

Action 4:

ensure the EU SME Envoy’s

participation in Regulatory Scrutiny Board RSB

hearings on initiatives that have a high impact

on SMEs

Action 5:

promote with the co-legislators the

implementation of an ‘on the spot’

2024

assessment of the impact of their substantial

amendments on SMEs and competitiveness of

their substantial amendments

Under development.

The EU SME Envoy was appointed on 31 January

2024.

To be implemented when the SME Envoy has taken

office. The EU SME Envoy was appointed on 31

January 2024.

Under development.

2024

Action 6:

engage with EU agencies to make it

easier for SMEs to use the agencies’ services

Under development.

2024

Action 7:

work with Member States to

promote regulatory sandboxes

Under development.

The Commission has proposed expanding the SDG’s

scope in its proposals on short-term rentals

, the

Net-Zero Iindustry Act

, the Critical Raw Materials

Actprojects

, the Data Governance Act

, driving

licences

, European associations

and the right to

repair

Action 8:

launch by the end of 2023 the

once-only technical system in co-operation

with Member States and further expand the

scope of the Single Digital Gateway to cover

new procedures, taking into account SME

COM (2023) 528 final

(Head

Office Tax System for SMEs (europa.eu))

COM(2022) 571 final.

COM(2023) 161 final.

Critical Raw Materials Act (europa.eu).

Regulation (EU) 2022/868 of the European Parliament and of the Council of 30 May 2022 on European

data governance and amending Regulation (EU) 2018/1724 (Data Governance Act).

Updated requirements for driving licences (europa.eu).

kom (2024) 0077 - Ingen titel

needs

The infrastructure for the once-only technical

system

has been launched in December 2023

and the process of connecting national authorities

to the system will follow in 2024.

In October 2023, the Commission put forward, as

part of the 2024 work programme

, 26 additional

rationalisation proposals. These aim to reduce

administrative burden without lowering social,

safety, consumer protection, environmental or

economic standards.

In September 2023, the Commission proposed a

new Regulation on late payments in commercial

transactions to tackle payment delays. Late

payments are an unfair practice that compromises

SMEs’ cash flows and hampers the competitiveness

and resilience of supply chains. The proposal is now

being discussed and agreed by the European

Parliament and the Council to reach an agreement.

In September 2023, the Commission adopted its

amended Do No Significant Harm (DNSH)

guidance

100

. Discussions with Member States on

transferring resources to national compartments of

InvestEU are ongoing.

Action 9:

present the next set of proposals to

rationalise reporting requirements

Action 10:

propose a new Late Payment

Regulation

IMPROVING LIQUIDITY AND ACCESS TO FINANCE

Action 11:

encourage Member States to

allocate additional resources to InvestEU

national compartments and provide additional

guidance on the application of the 'do no

significant harm’ (DNSH) principle

2024

facility to allow export credit agencies to

support SMEs’ in trading with Ukraine

Action 12:

work towards setting up a pilot

Under development.

Action 13:

promote the use of standardised

2024

procurement provisions and conditions

suitable for SMEs to improve the participation

of SMEs in public procurement.

Action 14:

ensure that SMEs have a simple

and standardised framework to report on ESG

issues, by limiting the risk of disclosure

requirements trickling down on non-listed

2024

SMEs in the value chain of undertakings in the

scope of CSRD, and ensuring the rapid

delivery of voluntary standards for non-listed

SMEs.

Under development.

Under development. A public consultation on

sustainability reporting standards for SMEs is

ongoing and open until 21 May 2024

101

COM(2023) 516 final.

COM(2023) 155 final.

Once Only Technical System (europa.eu).

Commission work programme 2024 (europa.eu).

100

C/2023/111.

101

https://www.efrag.org/News/Public-479/EFRAGs-public-consultation-on-two-Exposure-Drafts-on-

sustainability

kom (2024) 0077 - Ingen titel

Action 15:

encourage financial institutions to

include green SME financing in their business

2024

models by:

developing a green loans definition and

assessing the Green Asset Ratio

Under development.

ENABLING ACCESS TO SKILLED

STAFF

Action 16:

present a proposal to establish an

EU Talent Pool and an initiative to improve the

recognition of qualifications and skills of third

country nationals to help skills gaps in the EU

labour market

–

by Q4 2023

In November 2023, the Commission presented a

Skills and Talent Mobility package

102

to make the

EU more attractive to talent from outside EU, and

to facilitate mobility within the EU. Among other

new initiatives, the Commission proposes to

establish create an EU talent pool

103

to facilitate

the recruitment of jobseekers from non-EU

countries in occupations facing EU-wide shortages.

The proposal is now being negotiated by the

European Parliament and the Council.

Projects targeting the groups mentioned are

launched and ongoing under the Single Market

Programme (SMP)

104

and the European Social Fund

Plus (ESF+)

105

Action 17:

work with groups whose untapped

2024

entrepreneurial potential remains high, such

as women, young people and persons with

disabilities

Action 18:

be attentive to the needs of

companies that outgrow the thresholds of the

SME definition, and the broader range of

small mid-cap companies; and by the end of

2023:

analyse the impact of high inflation and

longer-run increases in productivity, as well as

the interaction with possible additional

measures for mid-caps, to raise - when

justified - the financial thresholds of the

2024

current SME definition;

develop a harmonised definition for small

mid-cap companies;

thereafter, take actions necessary to reflect

a revised SME definition in relevant legislative

acts, and

build a dataset based on the small mid-cap

definition and assess possible measures to

support these companies in their growth

(including potential application in adapted

form of certain measures favouring SMEs).

SUPPORTING SMES THROUGHOUT THEIR ENTIRE

BUSINESS LIFE CYCLE

Under development.

Commission proposes new measures on skills and talent (europa.eu).

Proposal for a Regulation on the establishment of an EU Talent Pool.

104

Overview - European Commission (europa.eu)

102

103

105

European Social Fund Plus (europa.eu).

kom (2024) 0077 - Ingen titel

Action 19:

assess framework conditions for

2024

business transfers in Member States together

with the network of SME Envoys

–

by Q2

2024

Under development.

Date: 1 February 2024

Implemented

Launched /

Under preparation

2024:

To be launched

kom (2024) 0077 - Ingen titel

ANNEX 4

The Single Market at 30

106

Policy tracker

106

COM (2023) 162 final.

kom (2024) 0077 - Ingen titel

ACTION

DESCRIPTION

In the Single Market and Competitiveness

Scoreboard, the Commission monitors how EU

Single Market rules are implemented in

Member States (e.g. transposition and

conformity deficits, public procurement,

payment delays by public authorities and

availability of digital public services), using as

well as indicators developed in the reform

recommendations for professional services.

The Single Notification Window (SNW)

108

was

launched on 19 September 2023 and is now

available online. The platform gives national

administrations a better overview of the

notification requirements relevant for the

Single Market. It which simplifies the

procedural steps for notifications to the

Commission and helps Member States to

ensure compliance with EU law.

The Commission initiated a process whereby it

is working with Member States and

stakeholders to analyse and address barriers

to the provision of services in the

construction, retail and tourism ecosystems.

The Single Market needs a dedicated voice

presence within national administrations. The

office should have senior leadership, and

appropriate resources, and a standing brief to

proactively raise issues and propose solutions

within the national decision-making system.

Discussions and exchange of good practices

on the organisation of the services

responsible for the Single Market offices are

ongoing within the SMET. SMET members

109

have agreed to share their best practices to

further develop the concept for these offices.

The Services Directive notifications tool has

been significantly improved and strengthened.

This has been done by introducing a detailed

assessment grid and guidance for Member

States’ proportionality assessments, aligning

it with the data input form for regulated

ENFORCING SINGLE MARKET RULES AND REMOVING MEMBER STATE-LEVEL BARRIERS

Monitor selected indicators from the Single

Market and Competitiveness Scoreboard

107

and other relevant sources related to

enforcement and the business environment

Setting up a single notification entry point for

Single Market notifications

Launching a priority process, together with

Member States, to tackle barriers to the free

movement of services in industrial

ecosystems with a high-services content

(construction, retail, tourism and business

services)

The Commission proposes to each Member

State to establish a dedicated Single Market

office to address Single Market barriers.

Adapting the Services Directive notification

tool and providing additional targeted

guidance to Member States for applying the

proportionality criteria.

The Single Market and Competitiveness Scoreboard | Single Market and Competitiveness Scoreboard

(europa.eu).

108

Single notification window (europa.eu).

109

Members and Sherpas - Single Market Enforcement Taskforce (SMET) - European Commission (europa.eu)

107

kom (2024) 0077 - Ingen titel

professions. The Internal Market Information

system (IMI)

110

online tool was improved and

adjusted so that Member States can use the

new form for notifications as of February

2024. This will contribute significantly to

better and less restrictive regulation and

avoid recourse to costly and unnecessarily

confrontational

ex post

enforcement.

The Commission is promoting the timely

agreement and widespread implementation

by interested Member States of a common

electronic form of electronic form for

declaring posted workers. In parallel, the

Commission is working to make a multilingual

portal available so that companies can submit

posting declarations online in their own

language for all Member States that decide to

make use of this tool.

This aims to limit both the transposition and

the conformity deficit to 0.5%. Monitoring will

be done via the Single Market and

Competitiveness Scoreboard.

This aims to solve a minimum of 90% of the

cases (when cross-border rights in the Single

Market are breached) within 12 months in

each Member State. Monitoring will be done

via the Single Market and Competitiveness

Scoreboard. It is up to the Member States to

try to informally solve those cross-border

cases through their SOLVIT centres. Those

cases that, due to their nature, cannot be

solved through SOLVIT, need to be addressed

through other, possibly formal, means,

including infringement procedures.

The Single Market Enforcement Task Force

(SMET) is a useful cooperation tool for

removing or easing barriers in the Single

Market. Member States are working on

significant projects, such as improving the

permitting for renewable energy; streamlining

the requirements for the cross-border

provision of services; removing prior checks

and documents requirements for the

recognition of professional qualifications;, and

IBAN discrimination

111

Introducing a common e-declaration for

posted workers

Monitoring specific enforcement targets set on

enforcement

Monitoring benchmark on SOLVIT

Reporting on progress in solving Single Market

barriers using cooperative tools, such as SMET

Internal Market Information System (IMI) - The EU Single Market - European Commission (europa.eu).

More detailed information on the achievements of the taskforce is available in the SMET report:

The Single

Market Enforcement Taskforce (europa.eu).

110

111

kom (2024) 0077 - Ingen titel

CONTINUING TO FOSTER THE GREEN AND DIGITAL DIMENSIONS OF THE SINGLE MARKET

Creating and interconnecting common

European data spaces in strategic sectors and

domains of public interest.

Since 2021 the Commission has published

several calls for proposals under the Digital

Europe programme for to create data spaces

in strategic sectors and key areas of public

interest that to strengthen digital capacity

across the EU.

The work on the data spaces is accompanied

by a review of the policy and legislative

framework for data access and use. This

includes the Data Governance Act

112

, the Data

Act

113

, and the Implementing Act on High-

value datasets

114

under the Open Data

Directive

115

, which was adopted in December

2022.

On 27 April 2023, the Commission proposed

a new framework for standard essential

patents (SEP)

116

. This should maximise R&D

investment by holders and implementers alike

of EU standard essential patents. Other

proposals of the patent package related to

supplementary protection certificates and

compulsory licensing in case of emergencies,

will also bring more transparency, legal

certainty, and efficient procedures in the

Single Market, benefiting EU companies, SMEs

and individuals alike.

On 6 September 2023, the Commission

proposed new steps to further digitalise the

coordination of social security in the EU

117

with the aim to make access to social security

services across borders quicker and simpler.

The first phase of ESSPASS piloting activities

took place between 2021 and -2022. A

second phase is taking place from 2023 to

2025

118

. Based on the outcomes of the pilot

The unitary patent will be accompanied by a

reform of standard essential patents setting

out the global licensing standards

Presenting an initiative on digitalising social

security coordination

Working on a pilot project for the European

Social Security Pass (ESSPASS)

European Data Governance Act | Shaping Europe’s digital future (europa.eu).

The Data Governance Act entered

into force on 23 June 2022 and, following a 15-month grace period, is has been applicable since September

2023.

113

Data Act | Shaping Europe’s digital future (europa.eu).

On the 28 June 2023, a

political agreement

was

reached between the European Parliament and the Council of the EU on the Data Act.

114

EUR-Lex - 32023R0138 - EN - EUR-Lex (europa.eu).

115

EUR-Lex - 32019L1024 - EN - EUR-Lex (europa.eu).

116

COM(2023) 232

–-

Proposal for a regulation of the European Parliament and of the Council on standard

essential patents and amending Regulation (EU) 2017/1001. This proposal

was part of the Commission “‘patents

package”’

that included other proposals in the area of supplementary protection certificates (four regulations:

COM(2023) 221, COM (2023) 222, COM (2023) 223, COM (2023) 231) and on compulsory licensing

(COM(2023) 224).

117

COM(2023) 501 final.

118

Currently, 12 Member States’ institutions are piloting ESSPASS to digitally issue and verify citizens’ social

security entitlements documents used across borders, such as the

‘Portable

Document A1’ for work purposes and

the EHIC in healthcare:

European Social Security Pass - Employment, Social Affairs & Inclusion - European

112

kom (2024) 0077 - Ingen titel

projects, the Commission will decide on the

next steps,. This includes deciding on on the

feasibility of deploying ESSPASS throughout

Europe and whether this would need a new

legislative framework.

On 12 September 2023, the Commission

adopted a key package of initiatives to reduce

tax compliance costs for large, cross-border

businesses in the EU

119

. BEFIT will reduce tax

compliance costs for large businesses,

primarily those who operate in more than one

Member State, and make it easier for national

authorities to determine what taxes are

rightly due.

On 17 May 2023, the Commission released

proposals for an ambitious and

comprehensive reform of the EU Customs

Union

120

. The proposed measures aim to

simplify customs processes for businesses. By

embracing digital transformation, the reform

will reduce burdensome customs procedures,

and will provide customs authorities with the

tools and resources to properly assess and

stop imports that pose real risks to the EU, its

people, and its economy.

The Commission is preparing potential

common training frameworks in co-operation

with Member States and stakeholders. The

Commission is also preparing a study on the

better use of digitalisation to make the

recognition of qualifications more efficient,

which includes the concept for the European

professional card.

On 15 November 2023, the Commission

adopted a Recommendation on the

recognition of qualifications of third-country

nationals

121

In April 2023, the Commission launched a

pilot with several Member States (Austria,

Finland, France, Spain, Romania) to test the

practical use of an EDSC in work, education

and training.

The final European digital skills certificate will

be rolled out in 2024, based on the pilot and

Introducing a single corporate tax rulebook for

the EU via the Business in Europe: Framework

for Income Taxation (BEFIT) , creating a

coherent approach to business taxation

throughout the EU

Reforming the Customs Union

Exploring with Member States the possibility

of using the European professional card and a

common training test and similar tools more

widely

Facilitating the recognition of qualifications of

third-country nationals

Piloting the European digital skills certificate

(EDSC) to ensure a minimum level of quality

of digital skills and upskilling and its

recognition across the EU

Commission (europa.eu).

119

COM(2023) 532 final (Business

in Europe: Framework for Income Taxation (BEFIT) (europa.eu)).

120

COM(2023) 257 final, COM(2023) 258 final, COM(2023) 259 final, COM(2023) 262 final (EU

Customs Reform

(europa.eu)).

121

C(2023) 7700 final.

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the following feasibility study.

In November 2022, the Commission published

its Progress Report towards the achievement

of the European Education Area

123

. The report

highlights the work done so far, and the

challenges still to be addressed.

In 2023, the Commission invited Member

States and other stakeholders to join the EEA

mid-term review process. This focuses on

drawing lessons from the first initial years

and building momentum and commitment

leading up to until 2025.

In 2024, the Commission will propose a

blueprint for the future joint European degree,

which will contribute to achieving a European

Education Area. It will be supported by

recommendations on quality assurance in

higher education and on attractive academic

careers.

124

In 2025, a full report on the European

Education Area is planned.

Completing the European Education Area (EEA)

by 2025

122

Date: 1 February 2024

Implemented

Launched / Under preparation

Homepage | European Education Area (europa.eu).

Building the European Education Area: Progress report published | European Education Area (europa.eu).

124

Commission work programme 2024. COM(2023) 638 final.

122

123

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ANNEX 5

OVERVIEW OF RESILIENCE

MEASURES OF KEY

INTERNATIONAL PARTNERS

NB:

This document is a non-exhaustive list of resilience measures to date taken by the EU’s key international partners .

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Type of resilience measures examined

1. Early warning system: market and supply chain monitoring, iIn-depth analysis (strategic

dependencies, industrial capacities, etc.)

2. Collection of key supply chain information from public authorities and iIndustry

3. Funding/subsidies, tax incentives, support to investments, R&D etc., in specific sectors/value

chains

4. Public procurement measures used in support of domestic production capacities, resilience, and

security of supply, etc.

5. Stockpiling of critical inputs

6. Prioritisation of supplies of goods and services

7. Trade and investment measures: tariffs, export restrictions, anti-coercion measures, standards,

etc.

8. International partnerships

Included countries and territories

US, UK, Canada, Japan, China, Singapore, Korea, India, Australia, and Taiwan

List of acronyms

Afa

–

Alliances for Action,

Singapore

ALMM

- Approved list of models and manufacturers,

India

CET

- Critical and emerging technologies,

CSF

–

Centre for Strategic Futures,

Singapore

CFIUS

–

Committee on Foreign Investment in the United States,

DPA

–

Defense Production Act,

EDI

–

Economic deterrence initiative,

EIS

–

Enterprise Innovation Scheme,

Singapore

–

Executive orders,

ESPA

–

Economic Security Promotion Act,

Japan

EST

–

Emerging Stronger Taskforce,

Singapore

FABS

- Facilitating American-Built Semiconductors,

FEPO

- Future Economy Planning Office,

Singapore

FIRB

–

Foreign Investment Review Board,

Australia

FSC

–

Korea Financial Services Commission,

South Korea

GPA

–-

Government Procurement Agreement,

–

Green transformation,

Japan

H2Hubs

–

Regional clean hydrogen hubs,

IPEF

–

Indo-Pacific Framework for Prosperity

IRA

–

Inflation Reduction Act,

ITC

–

Investment tax credit,

Taiwan

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ITM

–

Industry Transformation Map,

Singapore

JOGMEC

–

State-owned Japan Oil, Gas and Metals National Corporation,

Japan

KOMIR

–-

Korea Mine Rehabilitation and Mineral Resources Corporation,

South Korea

MAFF

–

Ministry of Agriculture, Forestry and Fisheries,

Japan

METI

–

Ministry of Trade and Industry,

Japan

MHLW

–

Ministry of Healthy, Labour and Welfare,

Japan

MLCCs

–-

Multilayer ceramic capacitors,

Japan

MLIT

–-

Ministry of Land, Infrastructure, Transport and Tourism,

Japan

MoA

–

Memorandum of agreement

MoC

–

Memorandum of cooperation

MoU

–

Memorandum of understanding

MoTIE

–

Ministry of Trade, Industry and Energy,

South Korea

NdFeB

–

Neodymium-iron-boron,

NDS

–

National defence stockpile,

NEMS

–

National emergency management stockpile capability,

Australia

NKPs

–

National key R&D programmes,

China

NEV PTE

–

NEV purchasing,

China

NSIA

–

National Security and Investment Act,

ODI

–

Outward direct investment,

PIPL

–

Personal Information Protection Law,

China

PLI

–

Production linked incentive,

India

PPE

–

Personal protective equipment,

Australia, UK

R&D

–

Research and development

RIE2025

–

Research innovation entrepreneurship programme,

Singapore

RISE

–

Partnership for Resilient and Inclusive Supply-chain Enhancement,

Japan

SCMs

–

Specified critical minerals,

Japan

SLACIP Act

–

Security Legislation Amendment Critical Infrastructure Protection Act,

Australia

SMA

–-

Southeast Asia Manufacturing Alliances,

Singapore

SPECS

–

Promotion of manufacturing of electronic components and semiconductors,

India

TSMC

–

Taiwan Semiconductor Manufacturing Company,

Japan

UFLPA

–

Uyghur Forced Labour Prevent Act,

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Introduction

Although Europe has and will gain resilience from being open and integrated in global value chains,

recent crises such as the COVID-19 pandemic and the Russian invasion of Ukraine have highlighted

that economic dependencies in global trade can be weaponised to our own disadvantage. To

address such dependencies, governments all over the world are adopting measures to secure their

supply chains and, more broadly to accelerate the green and digital transformation in their

countries. For example, in the context of the G7 and in line with the European Economic Security

Strategy, the G7 members have collaborated intensively on issues pertaining to Economic Security

including by setting up a dedicated platform of coordination on economic coercion.

To increase our understanding of today’s emerging context of “geopolitics of supply chains”,

this

annex aims to give a non-exhaustive picture

125

of measures taken by some of the EU’s main

international partners to reduce their strategic dependencies and reinforce the resilience of their

supply chains necessary for the digital and green transitions.

Gaining a better understanding of how international partners unilaterally reinforce their supply

chains can help the EU to mitigate its own strategic dependencies and strengthen its open strategic

autonomy. What is more, it sheds light on measures that could also potentially reinforce supply

risks for the EU by, for example, aiming at encouraging delocalisation and future disinvestment

decisions.

With a strong focus on measures adopted after the COVID 19 pandemic (mostly since 2020) -

which is considered as a pivotal shift for countries in addressing their strategic dependencies, the

inventory below lists the resilience measures that the Commission and EU delegations are aware of

in partner countries and territories, at the time of adoption of this document, and depending on the

level of information for each country.

In consequence, this toolbox should not be considered as an exhaustive account of all

resilience measures across the world, but rather as an illustrative list reflecting some

key measures taken by third countries. It is therefore likely that the actual number of

resilience measures adopted by international partners could be far greater.

This annex specifically looks at policies undertaken in the US, the UK, Canada, Japan, China,

Singapore, South Korea, India, Australia, and Taiwan- which are the most prominent international

economic players that have been the most active in mitigating their dependencies and reinforcing

their resilience in a context of arising risks from geopolitical tensions and unfair international

competition.

After scrutinising the collected data, third country measures have been classified into 8 specific

categories:

1. Early-warning system: market and supply chain monitoring, in depth-analysis (strategic

dependencies, industrial capabilities

etc…

The data used in this inventory is publicly available and has been collected through the

knowledge and intelligence of Commission services and EU delegations, notably in media articles,

press releases, official governmental documentation, as well as from interactions with respective

public authorities.

125

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2. Collection of key supply chain information from public authorities and industry

Funding/subsidies, tax incentives, support to investment, R&D etc… in specific sectors/value

chains

4. Public procurement measures used in support of domestic production capabilities, resiliency

and security of supply, etc…

5. Stockpiling of critical inputs

6. Prioritisation of supplies of goods and services

7. Trade, and Investment Measures: tariffs, export restrictions, anti-coercion measures,

standards, etc…

8. International partnerships

These categories have been chosen as they mirror policy instruments and components within

various EU legislations and instruments - such as the EU Internal Market Emergency and Resiliency

Act and the EU Critical Raw Materials Act

–

all embedded with the objectives of

promoting

our

economic, industrial and technologic base in strategic areas,

protecting

our economic security and

safeguarding the global level-playing field by strengthening our trade defence instruments, and

partnering

with international allies to coordinate policies on supply chain resilience and to

diversify sources of supply.

Despite of the non-exhaustive nature of the toolbox, the scope of the categories is deliberately

granular to easily classify and regroup together third countries measures as well as grasp the policy

rationale, objectives and means of international partners in reinforcing the resilience of their supply

chains.

As a result, we have identified to date 14 early warning systems measures; 6 measures on the

collection of key supply chain information from public authorities and industry; 57 measures related

to funding and subsidies, tax incentives, support to investments, R&D etc., in specific sectors and

values chains; 10 measures on public procurement; 10 measures on stockpiling of critical inputs; 8

measures related to the prioritisation of the supplies of goods and services; 23 trade and

investment measures; and 27 international partnerships.

However, classifying a third country policy measure is not always clear cut and a

specific measure may consequently be counted in several categories. Therefore, the total

number of policy measures may not be exactly accurate, but nevertheless the inventory

sheds light on the various types of policy instruments used by international partners in

reinforcing their respective resilience and competitiveness.

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1. Early warning system: market and supply chain monitoring, in-depth analysis

(strategic dependencies, industrial capacities, etc.)

•

US: Executive

Order 14017 ‘America’s Supply Chains’:

The involved publication, in 2022,

of reports on: semiconductor manufacturing and advanced packaging; large-capacity batteries,

including for electric vehicles; critical minerals, including rare earths; and pharmaceuticals and

their active ingredients. The reports include assessments of and strategies to strengthen supply

chains for the following industrial sectors: energy; transportation; production and distribution of

agricultural commodities and food products; public health and biological preparedness; ICT; and

defence.

US: The Supply Chain Disruption Task Force, created in June 2021,

is a coordinating

inter-agency process on supply chain issues.

US: Executive Orders 13953 (Addressing the Threat to the Domestic Supply Chain

from Reliance on Critical Minerals From Foreign Adversaries and Supporting the

Domestic Mining and Processing Industries) of 30 September 2020, and 13817 (A

Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals) of 17

December 2017.

EO13953 entrusted the Secretary of the Interior to with the task of

producing every 180 days a report on critical minerals supplies and potential risks from foreign

powers. EO13817 launched an in-depth review of critical minerals supply chains necessary for

the US economy and national defence and investigated expanding mining production in the US.

UK:

The

critical imports and supply chains strategy

which was published in January 2024

sets out how the UK government intends to help businesses build secure and reliable supply

chains in areas which are vital to the UK’s economic prosperity, national security, and the

delivery of essential services. The strategy builds on the existing sectoral strategies, such as

the critical raw materials and semiconductors strategies, which aim to ensure that UK is a

centre of excellence on supply chains, building on the analytical work undertaken to date. The

defined critical sectors are chemicals, civil nuclear, communications, defence, emergency

services, energy, finance, food, government, health, space, transport and water. Moreover, The

identified growth sectors set out are digital technology, green industries, life sciences, advanced

manufacturing and creative industries. It complements the

advanced manufacturing plan,

adopted in December 2023.

UK:

The UK established its first

Critical Minerals Intelligence Centre

in July 2022, which

provides ongoing intelligence on the supply of and demand for critical minerals. The centre

advises the government on economic, environmental, ethical, and geopolitical issues linked to

supplies of critical mineral resources. The centre

has already published reports on the UK’s

future demand of for critical raw materials for EV electric vehicle batteries, and on the

UK’s

dependency for the UK on 26 critical materials.

UK: The Integrated Review Refresh 2023

outlines how the UK government needs to

respond to the deteriorating global security environment. The strategy identifies energy

security, economic security, and democratic and wider societal resilience as priority areas to

address the UK’s vulnerabilities. It builds on the Integrated

Review from 2021 which included a

supply chains resilience framework based on the following five areas: diversification,

international partnerships, stockpiling and surge capacity, onshoring, and demand management.

The review sets out to identify whether it may be beneficial to manage the demand for

components or goods, considering substitutes and alternatives, innovation, and circularity. The

•

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review’s

recent Refresh from 2023 emphasises economic security.

•

Japan:

As part of the

Economic Security Promotion Act (ESPA),

an umbrella instrument

adopted in May 2022, and intended for full implementation within the next 2 years, the

Japanese government selected 11 materials as

‘specified critical materials

(SCMs)’ which are

strategically important the country. Measures to ensure a stable supply of these products were

included in the comprehensive economic stimulus package in 2022. The list covers 11 sectors

and 4 ministries (list below). For each of these critical products, the ministries have published

sectoral policy guidelines

that: (i) analyse

their importance for Japan’s economic security,

external dependencies and supply chains; (ii) lists all existing sectoral policies and measures;

and (iii) explains why supplementary measures are necessary on economic security grounds. In

November 2023, the government announced its intention to designate additional critical

commodities. The list of critical products is evolving with the upcoming decisions to designate

new critical products such as uranium

(as one of the critical minerals) and

multilayer

ceramic capacitors

(MLCCs) by the end of 2023.

i. Ministry of Trade and Industry

(METI)

(8): semiconductors, cloud computing,

storage batteries,

permanent magnets,

critical minerals,

machine tools and

industrial robots, aircraft

part materials and LNG.

ii.

Ministry of Land, Infrastructure, Transport and Tourism (MLIT) (1):

maritime

transport / shipping equipment (engines, propellers, navigational equipment (sonar)

etc.); to support maritime transport.

iii.

Ministry of Agriculture, Forestry and Fisheries (MAFF) (1): fertiliser raw

materials.

The establishment of a stockpiling system and state support on storage

fees for fertilisers held by private companies (e.g. fertiliser manufacturers) will be

considered.

iv.

Ministry of Healthy, Labour and Welfare (MHLW) (1):

antimicrobials.

•

Ministry of Healthy, Labour and Welfare (MHLW) (1):

antimicrobials.

Australia:

In 2021, the Australian government created the Office of Supply Chain Resilience

under the Prime Minister. The office is dedicated to monitoring

Australian supply chains’

resilience. Its tasks of the Office include: health, safety and wellbeing, economic stability and

viability, national security and international partners. The office advises the Australian

government on supply chain risks and potential actions to improve resilience. benefit.

South Korea:

since 2022, advance warning on supply chains and economic security issues are

provided by: (i) the

Economic Security Centre

managed by the Ministry of Foreign Affairs; (ii)

the Global Supply Chain Analysis Centre managed by the Ministry of Trade, Industry and

Energy; and (iii) the Office of Economic Security managed by the Office of the President

provide, since 2022, advance warning on supply chains and economic security issues.

South Korea: South Korea

has an early warning system in place to monitor 20 key raw

materials to ensure stable supplies.

Singapore: Alliances for Action (AfA) (June 2020).

The AfAs are industry-led coalitions,

working in partnership with the government, to prototype ideas in areas of opportunity for

Singapore or to address a common challenge. A total of nine AfAs were formed under the

Emerging Stronger Taskforce (EST): - Supply Chain Digitalisation;, - Sustainability;, Digitalise

Built Environment;, -Smart Commerce;- Robotics Solutions;, - Safe and Innovative Visitor

•

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Experiences;, - EduTech;, -MedTech; and, - AgriTech Ecosystem.

•

Singapore: Emerging Stronger Taskforce.

To oversee the longer-term work of responding

to the structural shifts in Singapore’s economy, the Emerging

Stronger Taskforce (EST) was set

up in May 2020 under the Future Economy Council (FEC). Chaired by the Minister for National

Development and, the Minister-in-charge of Social Services Integration, and the CEO of PSA

International Group CEO, the tTaskforce comprised business leaders with rich experience in key

areas such as digitalisation and connectivity, and with broad perspectives on the global

economy.

Singapore:

Singapore

established a Future Economy Planning Office (FEPO)

within its

Ministry of

Trade and Industry (MTI). FEPO’s key roles include developing industry

transformation maps (ITMs) to secure Singapore’s economy resilience.

Singapore:

The

Centre for Strategic Futures (CFS)

is part of the

Singapore’s Prime

Minister’s

Office. CSF is a foresight department whose mission is to position the Singapore

government to so that it can navigate emerging strategic challenges and harness potential

opportunities.

•

2. Collection of key supply chain information from public authorities and industry

•

US: ‘Section 232 investigations’

under the Trump Administration served to collect market

information from companies and stakeholders on aluminium and steel, on the dominant role of

China in the supply chain, and the risks associated with the

US’s

import dependency on China,

especially for sintered magnets (100%).

US: The Defense Production Act (DPA)

allows the US government to obtain information from

defence industry businesses, including information needed for defence industry studies.

US: Subpoena power of the Federal Trade Commission

grants the Consumer Protection

Agency to have authority to order companies to turn over information for research purposes, a

power it has used to study the privacy practices of broadband providers and start-up acquisitions

by the five U.S. tech giants, among other areas.

Australia:

The

Security Legislation Amendment (Critical Infrastructure Protection) Act

(SLACIP Act) (2022)

amends the Security of Critical Infrastructure Act 2018 (the SOCI Act) to

build upon the existing framework and uplift the security and resilience of Australia’s critical

infrastructure. The SOCI Act contains definitions that outline each of the 11 critical infrastructure

sectors. Definitions were developed in consultation with industry to ensure clear articulation of

what constitutes a critical infrastructure asset within each sector.

Japan:

Under the

Economic Security Promotion Act

(ESPA), when business operators

(including foreign operators) engaged in the production, import or sale of

‘designated

critical

commodities’ apply to the governmental support programme (including for financial support), the

operators are required to report data on the production, import, sale, procurement or storage of

such commodities or related raw materials, and may be subject to on-site inspections.

Additionally, the government will screen

‘critical

equipment’ owned by

‘designated

core

infrastructure operators’ in 14

‘core

infrastructure sectors’:

(i)

electricity; (ii) gas, ; (iii) oil; (iv)

•

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wate; (v) telecoms; (vi) broadcasting ; (vii) post; (viii) finance; (ix) credit cards; (x) railways; (xi)

land freight; (xii) sea freight; (xiii) aviation; and (xiv) airports.

•

South Korea: South Korea’s Framework Act on the

supply chain management for

economic security,

announced in 2022, establishes a presidential committee on economic

security and supply chain management to act as a control tower to monitor the entire supply

chain process, including information collection, risk -detection, risk prevention and risk

management. The Act furthermore establishes a Supply Chain Stabilisation Fund to be managed

by KEXIM Bank, Korea’s import/export bank.

3. Funding/subsidies, tax incentives, support to investments, R&D etc., in

specific sectors/values chains

•

US:

The US Energy Department of Energy announced in October 2023 USD 7 billion to

launch seven

regional clean hydrogen hubs (H2Hubs)

across the US to accelerate

the commercial-scale deployment of low-cost, clean hydrogen. The funding derives

from the Bipartisan Infrastructure Law.

US: The Inflation Reduction Act (2022)

makes major federal investments designed

to: (i) reduce US greenhouse gas emissions and combat climate change (USD 370

billion estimated at US Congress level, but potentially higher as the US budget is

uncapped); (ii) catalyse US domestic clean energy, development, deployment, and

expansion; and (iii) enhance US energy security (over USD 60 billion). Some elements

of the IRA Act, notably with respect to discriminatory content and assembly

requirements, have raised concerns amongst international partners, regarding

distortion of international trade and investments, adverse impacts on companies not

located in the US and its compatibility with World Trade Organization (WTO) rules.

US:

The

Chips Act (2022)

is to include a USD 52 billion budget directed towards

domestic semiconductor research, design, and manufacturing.

US:

The

Investment and Infrastructure Jobs Act (2021)

makes available USD 1.2

trillion in investment in transport, power, and broadband infrastructure, with domestic

preference

(‘Buy America’)

requirements attached.

US: The Facilitating American-Built Semiconductors (FABS) Act (2021)

is to

provide semiconductor investment tax credits. The bill was incorporated under the

Chips Act.

US:

The

Energy Storage and Tax Incentive and Deployment Act (2019)

creates

an investment tax credit for energy storage.

US: The Innovation and Competition Act creates a USD 250 billion supply chain

resiliency and crisis response programme.

US: The Export-Import Bank

offers medium- and long-term loans and loan

guarantees available for "‘export-oriented domestic manufacturing projects,"’ with a

particular focus on sectors such as semiconductors, biotech and biomedical products,

renewable energy, and energy storage.

•

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•

Canada:

the The 2023 federal budget 2023 presented in March 2023 earmarks

CAD

80 billion (EUR 54 billion) worth of tax credits and infrastructural

investments over 11 years

to encourage investments in low-carbon electricity,

manufacturing, and other green industrial activity (the

‘Made

in Canada

plan’).

The

combined value of the tax credits is CAD 65 billion. These consist of:

The

clean electricity investment tax credit,

with a total cost of CAD 25.7

billion (EUR 17.4 billion) over 11 years. The 15% credit targets investments in

non-emitting electricity generation systems (including large-scale hydro- and

nuclear facilities), abated natural gas-fired electricity generation, stationary,

fossil fuel-free storage systems, as well as electricity transmission equipment.

The clean technology investment tax credit.

Announced in the 2022 Fall

Economic Statement, the 30% tax credit will promote investment in areas like

wind, solar, small modular nuclear reactors, and geothermal energy. Its 5-year

is estimated at CAD 6.7 billion (EUR 4.3 billion). Companies cannot draw on

both the clean electricity investment tax credit and the clean technology

investment tax credit for the same project.

The investment tax credit for clean hydrogen.

Announced in the 2022

Fall Economic Statement, the credit will vary between 15% and 40% of

project capital costs, depending on the lifecycle carbon intensity of the

produced hydrogen. This credit is expected to cost CAD 5.6 billion(EUR 3.8

billion) over the next 5 years, and another CAD 12.1 billion (EUR 8.2 billion)

between 2028-2029 and 2034-2035.

The carbon capture, utilisation and storage investment tax credit

has been extended. Announced in the 2022 budget 2022, this update will add

$CAD 516 million (EUR 349 million) to the

credit’s CAD

4.1 billion (EUR 2.8

billion) total over the next 5 years.

The tax credits are complemented by a CAD 15 billion (EUR 10.1 billion)

Canada

Growth Fund.

To de-risk private investment, the fund uses so-called

‘contracts

for

difference’, which provide a governmental guarantee for the future price of, for

example, carbon or hydrogen. The fund will start investing from July 2023 onwards.

In addition, the budget launches:

extension of the reduced tax rates

for zero-emission technology

manufacturers;.

CD 500 million (EUR 338 million) top-up for the Strategic Innovation

Fund

to support the development and application of clean technologies in

Canada.

•

Canada:

On 24 March 2023, Canada presented the

Critical Minerals

Infrastructure Fund

–

a new fund announced in the 2022 budget that will allocate

CAD 1.5 billion for energy and transportation projects needed to unlock priority mineral

deposits. The new fund will complement other clean energy and transportation

supports, such as the Canada Infrastructure Bank and the National Trade Corridors

Fund, as well as other federal programmes that invest in critical minerals projects,

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such as the Strategic Innovation Fund.

•

UK:

In March 2023, the UK reformed the UK Infrastructure Bank and its governance.

The bank was created in 2021 with a capital of GBP 22 billion to mobilise investments,

including in climate-related technologies, to ensure the UK reaches its 2050 climate

targets.

UK:

In May 2023, the UK unveiled its

national semiconductor strategy,

which

includes a plan to redouble efforts in design, research, and advanced chip leadership.

To do this, the government will invest up to GBP 1 billion in the next decade to

improve access to infrastructure, power more research and development and facilitate

greater international cooperation, with up to GBP £200 million over the years 2023-

2025.

UK:

Announced in its Integrated Review 2023 the establishment of a new

Task &

Finish Group on Critical Minerals Resilience

for UK industry, to support the

delivery of the UK Critical Minerals Strategy and investigate vulnerabilities and

resilience opportunities across value chains. The group had its first meeting on 20 April

2023.

UK:

In February 2023, the UK government launched

‘CleanTech

for UK’,

a coalition

of leading clean tech entrepreneurs, investors and venture builders with combined

funds of over GBP 4 billion, committed to working together to supercharge the

country’s green economy and innovation for a net-zero

emissions future.

UK:

In November 2022, the government announced over

GBP 65 million

investment to help speed up the development of new green technologies

backed by the talent and expertise of British business. This pledge will go towards the

world’s first large-scale

industry transition programme, by the Climate Investment

Funds, to help energy-intensive industries in developing economies including India and

Indonesia to go green. This comes on top of a further GBP 65.5 million for the Clean

Energy Innovation Facility, which provides grants to researchers and scientists to

accelerate the development of innovative clean energy technologies in developing

countries.

UK:

The

British Industry Supercharger,

announced in February 2023, is designed to

reduce industrial electricity prices for eligible energy intensive industries in Great

Britain. It aims to ensure the energy costs for key Britain’s strategic energy intensive

industries are in line with other major economies around the world and to tackle the

challenge of indirect carbon leakage and the risk of that the policy costs imposed on

energy intensive industries could lead to the displacement of production, and

associated emissions. The annual value of the scheme is estimated between around

£320 to £410 million per year, from which about 300 businesses in sectors including

steel, metals, chemicals and paper will benefit.

UK:

The

critical minerals strategy,

adopted in July 2022,

sets out the government’s

plans for improving the resilience of critical minerals supply chains and increasing UK

security of supply. Through this strategy, the UK intends to accelerate growth of the

UK’s domestic capabilities,;

collaborate with international partners, and; enhance

international markets to make them more responsive, transparent, and responsible.

•

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•

UK: The Subsidy Control Act of April 2022,

which replaces the EU’s

State aid

regime and is mandated by the EU Trade and Cooperation Agreement (TCA), came into

force on 4 January 2023. Under the TCA, the UK is committed to establishing an

effective system of control of subsidies with a view to ensuring that subsidies are not

granted where they have or could have a material effect on trade or investment

between the EU and the UK. The new regime diverges significantly from the

EU’s

approach which is centralised and regulates ex-ante basis. The UK regime features a

new definition of subsidies and a set of subsidy control principles, aligned with the

Trade and Cooperation Agreement, against which public authorities must self-assess

the compliance of proposed subsidies via an "‘Assessment of Compliance’.

Australia:

On 25 October 2023, Australia announced an

AUD 2 billion expansion

in critical minerals financing,

which will solidify

Australia’s

position as a world-

leading provider, help the transition to net zero, boost the economy and support more

jobs and opportunities for Australians. Critical minerals, including rare earths, are the

building -blocks for a clean energy future, and are essential to achieving

Australia’s

energy transition. This significant commitment will double the capacity of the Critical

Minerals Facility to finance Australian critical minerals mining and processing projects.

This expansion of the Critical Minerals Facility takes the

government’s

value-adding

investments in Australian resources to AUD 6 billion.

Australia:

Established in 2021, Australia’s

Supply Chain Resilience Initiative

provides businesses up to AUD 2 million to establish or scale up a manufacturing

capability or a related activity to address supply chain vulnerabilities for a critical

product or input identified in the sovereign manufacturing capability plan. The main

new policy tool is the SCRI grant (AUD 50 million) to improve access to critical

products in times of crisis.

Australia:

In 2020, the Australian government launched the its

modern

manufacturing strategy with a budget of AUD 1.3billion.

The strategy is a key

feature of the plan to harness Australian manufacturing capability and to drive

Australian economic recovery and future resilience. The

strategy’s

vision for the

strategy is for Australia to be recognised as a high-quality and sustainable

manufacturing nation that helps to deliver a strong, modern and resilient economy for

all Australians. The Australian modern manufacturing strategy is implemented by the

national manufacturing priority roadmaps. These road maps for the six priority areas

were developed with industry through taskforces ion the following domains:medical

products, resources technology & critical minerals processing, food and beverage,

defence, and recycling and clean energy.

India:

In May 2023, the Ministry of Electronics and Information Technology launched

‘India

Semiconductor Mission’

to act as the central entity coordinating all

semiconductors-related policies of the Indian government and ensure their smooth

implementation. Some initiatives in place include

the Semicon India programme,

which provides USD 10 billion for 100 Indian companies in the field of electronics.

Since 2022, the amended

programme for semiconductors and display fab

ecosystems

provides fiscal support of 50% of project cost for all technology nodes

for semiconductor fabs, fiscal support of 50% of project cost for display fabs, and

fdiscal support of 50% of capital expenditure for compound semiconductors, silicon

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photonics, sensor fab and semiconduction facilities. The

Digital India campaign

also

aims to develop the electronics sector, making it worth USD 300 billion by 2026,

particularly in semiconductor and design, smartphones, IT hardware, and components.

•

India:

The Ministry of New and Renewable Energy in August 2021 launched the

National Hydrogen Mission

as a blueprint for India’s transition to a hydrogen-based

economy, with the goal of reaching a production of 5 million tonnes of green hydrogen

by 2030. The Indian government is offering special manufacturing zones to produce

hydrogen, with free energy transmission across state lines and priority connection to

the grid. In February 2023, the Indian government also announced an INR 350 billion

(EUR 4 billion) fund to invest in energy security and green transition (with a focus on

solar power and green hydrogen production), the aim of being to reach net-zero

emissions by 2070.

India:

The

Production Linked Incentive (PLI) Scheme (2020),

managed by the

Ministry of Heavy Industries, is a scheme to help develop local supply chains. Although

the scheme invites foreign companies to set up units in India, it also aims to

encourage local companies to set up or expand existing manufacturing units and

reduce

the country’s reliance on imports from other countries.

Benefiting industries

include the battery ecosystem (under the

‘national

programme on advanced

chemistry cell battery storage),

with USD 2.49 billion over 5 years in subsidies to

develop 50 GWh of battery capacity in India. Beneficiaries must ensure a 60%

increase in domestic value added within 5 years. An additional PLI scheme was

launched to boost solar panel production in India, with a budget of USD 600 million.

The goal is to attract USD 2.30 billion in private financing and to reach an additional

10 000 MW of solar electricity production capacity in India. Other schemes have been

designed for the Promotion of Manufacturing of Electronic Components and

Semiconductors (SPECS) initiative, and more recently in 2023 for IT Hardware to

promote the localisation of components and sub-assemblies of semiconductor design,

ICT manufacturing, laptops, tablets, and packaging.

China:

China has a NEV Purchasing tax exemption (NEV PTE), which is gradually being

reduced, as follows: in 2023, exemption for 10%, no tax reduction cap; in 2024-2025,

exemption for 10%, with cap of CNY 30 000; and in 2026-2027, exemption for 10%,

with cap of CNY 15 000 RMB. All products are eligible for PTE, regardless of whether

they are imported or locally manufactured. Electric vehicle subsidies apply only for

locally made vehicles, but includes products manufactured by EU joint ventures in

China.

China: The 14th Five-Year Plan (2021)

included an entire chapter devoted to

boosting

the digital sector’s added value to 10% of GDP by 2025. This notably

includes targeted investments in 6G and in cloud services. According to the law

“‘Classified

Catalogue of Telecommunications Services 2015’

law

updated in 2019,

only Chinese companies can be licensed to operate cloud services for security reasons

and to guarantee a protected market for Chinese companies.

China:

The

implementation plan for the development of new energy storage

technologies

during the 14th Five-Year Plan period implements several investment

measures to develop energy production and storage in emerging fields such as

compressed air, hydrogen, battery, and thermal energy, with the goal of reaching self-

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reliance in those fields. The goal is notably to reach 100 GW of battery storage

capacity by 2030.

•

China:

The

China Hydrogen Alliance

is a public body charged with boosting

hydrogen production in China. Hydrogen has been included as one of China’s six

industries of the future and has received important investments as part of the 14th

Five- Year Plan for a modern energy system.

China:

The

dual circulation strategy (2020)

includes tax breaks, cheaper utility

rates, low-interest loans and free or discounted land for chipmakers to: (i) meet higher

technical standards; (ii) advance technology development; and (iii) incentivise

reshoring and development of local capacity. Even though foreign invested companies

are in principle eligible for these breaks, the goal is to achieve self-reliant economic

development to have complete supply chains under Chinese control.

China:

Central government funding is available for fuel-cell vehicles, up to CNY 1.7

billion (EUR 230 million), for local governments that meet specific targets. Local

governments will also promote the roll-out of FCVs, with the provinces of Beijing,

Shanghai, Hebei, Inner Mongolia, and Shandong each aiming to have 10 000 FCVs on

their streets by 2025.

China:

The government calls on public and private institutions to work towards

technological innovation in strategic areas. State funds support public universities and

research institutes to conduct research, while state-owned and private enterprises

pursue R&D in high-priority areas. This is often done through

national key R&D

programmes

(NKPs). Since 2016, the government has announced 66 NKP projects

focusing on hydrogen technologies, with a total estimated value between CNY 1.75

and CNY 5 billion (EUR 240 and 680 million, respectively). Of these, 14 NKPs have an

explicit focus on green hydrogen, with a combined estimated value between CNY 400

million and CNY 1.25 billion (EUR 54 to EU 170 million).

China:

The government directly or indirectly funnels credits and investment into

‘strategic sectors’,

e.g. through

‘government

guidance funds’

that combine public

and private investment and through lending by state-owned banks.

Taiwan:

The

5+2 Innovative Industries Plan (2016)

aims to upgrade Taiwan as

an industrial global player in key sectors. Implementation focuses on seven industries

and projects including intelligent machinery, green energy, biomedicine, national

defence and aerospace, new agriculture, circular

economy and ‘Asia Silicon Valley’.

The

focus on these areas is expected to move Taiwan forward from contract

manufacturing to a new commercial model centred on high-value-added business,

services and solutioning.

Taiwan:

Last amended in June 2023, the

Statute of Industrial Innovation

states

that companies with a critical position in the global supply chain may claim

investment tax credit (‘ITC’) of 25% on research & development R&D expenditure and

5% on procurement of machinery/equipment. The applicable period for utilising such

ITCs spans 7 years, running from 1 January 2023 to 31 December 2029 (expiry date

of Statute).

Taiwan:

The

Statue of Industrial Innovation,

last amended in 2023, represents

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Taiwan’s largest investment tax reduction incentive in history.

The effective tax rate

for companies investing in the chips sector in Taiwan is 1%. For companies with

technological innovations in semiconductors, electric vehicles, and 5G, the law provides

a 25% reduction in expenses related to forward-looking R&D, and a 5% reduction in

the purchases of new machinery or equipment for advanced processes, offset by the

tax payable in the year of purchase.

•

Taiwan:

The

electric truck subsidy plan (2022),

dedicates TWD 200 million to

green logistics. Domestic companies are able to obtain subsidies to improve electric

vehicles and develop greener dispatching systems, with the caveat that key project

components of the project (including batteries and motors) cannot be manufactured in

China.

Taiwan: E-bus subsidy plan (2023).

A seven-year NT$64.3 billion (US$2.1 billion)

plan to make all buses and coaches in Taiwan battery electric by 2030. The program

aims to decarbonize public transport nationwide between 2024 and 2030 as part of

government efforts to achieve net-zero emissions by 2050.

Taiwan:

To tackle Taiwanese semiconductor talents outflow to China, the Ministry of

Labour implemented two distinct rules in 2021

prohibiting the advising or

intermediation of recruitment for Taiwanese individuals to work in China.

The

rules are not exclusive to engineers but apply to all sectors. The first announcement, in

April 2021, prohibits labour agencies from assisting in advertising recruitment or

acting as an intermediary helping personnel going to work in China. Violations of this

rule can result in fines. The Ministry of Labour further specified regulations, prohibiting

domestic advertising recruitment or intermediation of personnel going to work in

mainland China unless by a Taiwanese company permitted by the Ministry of

Economic Affairs to invest in mainland China and with actual business operations

there. Different penalty amounts are specified based on the number of first-time and

repeated offences.

Japan:

In June 2023, the Japan Investment Corporation, a government-backed fund

overseen by Japan’s Ministry of Economy, Trade and Industry, concluded an

unprecedented buyout offer worth

USD 6.4 billion targeting JSR,

a leading

Japanese listed company in photoresists, a technology needed in semiconductors

value chains. At the time of the offer, the capitalisation of JSR was USD 4.7 billion.

Japan:

The

green transformation (GX) basic policy (May 2023)

is an investment

roadmap for 150 trillion yen of public-private financing over the next 10 years. It is

comprised of two main parts: (i) measures for stable energy supply (energy efficiency,

renewables, nuclear, other energy sources like hydrogen, ammonia, LNG, batteries,

carbon recycling); and

(ii) ‘growth-oriented’

carbon pricing schemes. It will introduce a

carbon tax by 2028, starting with a voluntary emissions trading scheme introduced

starting in 2026. The GX plan will drive forward investment in: renewables, grid

flexibility, energy efficiency and the circular economy, supported by an upcoming

sovereign bond to stimulate private-sector investment.

Japan: Partial amendment of the Japan Bank for International Cooperation

Act (April 2023)

focused on: (i) enhancement of supply chain resilience to contribute

towards maintaining and improving the international competitiveness of Japanese

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industries; (ii) assistance for Japanese companies, including start-ups, in taking further

taking risks with expectations of such sectors such as digitalisation and green

initiatives growing; and (iii) participation in the international support for the recovery

of Ukraine.

•

Japan:

In October 2022, METI (the Ministry of Economy, Trade, and Industry) launched

a new Resource Autonomous Economy Strategy Planning Office and new study group

to design a pro-growth economy with circular economy and resource autonomy. The

study group will explore ways to encourage industries to use circular resources against

the backdrop of limited domestic resources, increasing global demand for critical

raw

materials, unexpected supply disruptions and economic fallout from the

weakening yen.

Japan:

In September 2022, METI approved production plans for advanced memory

semiconductors in Hiroshima by Micro Memory Japan and Micron Technology, for

thewith a maximum subsidy in the maximum amount of JPY 46.5 bn. The ministry

emphasised that this would contribute to further strengthening of Japan-US

cooperation on semiconductors since Micron conducts development and production in

both the U.S. and Japan.

Japan:

Under the

Economic Security Promotion Act (ESPA) (May 2022),

specific

companies supplying designated critical commodities can receive financial and fiscal

support over the medium to long term. Subsidies under ESPA will aim to reduce risk

for private operators and encourage them to enter currently low-margin / high-risk

businesses and R&D. Examples of measures under the ESPA include:

A package worth approx. JPY 800 billion (EUR 6.15 billion) to support the domestic

semiconductor industry, including the construction of a chip plant in Kumamoto

Prefecture by a joint venture of Taiwan Semiconductor Manufacturing Co. (TSMC),

Sony and Denso.

A new economic stimulus package to support the development of production

infrastructure, diversification of supply sources and development of

alternative commodities. In April/August 2023, the Japanese government of

Japan designated 20 critical and emerging technologies (maritime, aerospace,

cyberspace, biotechnology, semiconductors, robotics and quantum, hypersonic,

cybersecurity utilising AI, drones and unmanned aerial vehicles, next-

generation furnaces and fusion furnaces). Selected projects are expected to

begin by Q3/4 of 2023 and will be funded for up to 5 years (max. of 10

years). In this context, already JPY 500 bn (EUR 3.2 bn) has been allocated to

the key technologies for economic security.

Re-introduction of secret patents. The recent Basic Policy Guidelines identified

25 technologies to be covered, including technologies related to aircrafts,

unmanned aerial vehicles, guided weapons, jet engines, solid fuel rocket

engines, weapons with electromagnetic launchers, laser weapons,

electromagnetic pulse munitions, defence against aircraft and guided missiles,

telecommunications jamming, uranium and plutonium isotope separation,

decomposition and reprocessing of nuclear fuel, nuclear devices, etc. The

Implementation will start in 2024.

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•

Japan:

2022 saw the

establishment of RAPIDUS, a corporation in which Japan’s major

chips manufacturers are participating to establish mass production of next-generation

semiconductors.

Japan:

The

State-owned Japan Oil, Gas and Metals National Corporation

(JOGMEC) supports exploration and technological development by Japanese

companies through equity capital and liability guarantees. JOGMEC invests in rare

earth overseas projects to diversify supply involving Japanese companies to diversify

supply. Its purpose, scope, structure, and obligations are set out in the

JOGMEC

ACT

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Japan:

Under the planned revision of the JOGMEC ACT, JOGMEC is to strengthen

financial support for Japanese businesses’ rare

earths exploration and refining

operations. The revised legislation is reported to: (i) increase the ceiling of

JOGMEC’s

loan and investment ratio by expanding government’s support

through JOGMEC from

the current level of 50% to 75% of investment in projects; (ii) allow JOGMEC to invest

in or grant debt guarantees to domestic Japanese mineral-refining operations (at

present JOGMEC can only support refining operations overseas, in practice in China);

and (iii) allow JOGMEC to actively support overseas mining and projects involving

Japanese companies (risk money support).

South Korea:

In August 2023, the Korea Financial Services Commission (FSC)

announced a set of measures aimed at boosting support for the export industry by

providing 23 trillion South Korean won (EUR 16.4 billion). These export credits will be

focused on 20 strategic export sectors, which encompass the

‘12

new export growth

engines’ (secondary batteries, electric vehicles, high-value-added shipbuilding, green

industries, edu-tech, agro and fishery food products, smart farming, ICT services,

creative contents, pharmaceuticals/medical devices, and cosmetics), as well as

Korea’s

eight backbone industries (chips, displays, steels, machinery, petro-chemicals, nuclear

power plants, national defence, overseas construction, environmental industry).

South Korea:

In April 2023, President Yoon Suk Yeol announced that the government

will invest 20 trillion won (USD 15.1 billion) in the electric vehicle battery industry by

2030 to turn it into a key component of the country’s national security and strategic

assets, along with semiconductors, and to secure a significant lead over rivals. More

specifically, the government will support large research projects to develop solid-state

batteries, while top battery cell makers ― LG Energy Solution, Samsung SDI and SK ―

plan to produce prototypes of solid-state batteries domestically and then mass

produce them overseas.

South Korea:

In April 2023, the Ministry of Economy and Finance announced that the

government will invest 4.5 trillion won (USD 3.5 billion) and provide support measures,

including tax benefits, to encourage private corporations to invest 150 trillion won into

chips, displays and batteries. The government will also engage in strategic cooperation

with countries with advanced technologies in these fields.

South Korea:

South Korea passed on 30 March 2023 its own

‘K-Chips

Act’ that gives

specific advantages to Korean chipmakers, with tax breaks to increase production in

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300052290.pdf (jogmec.go.jp)

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Korea. The goal is to encourage them to spend approximately a combined about EUR

379 billion by 2030 to facilitate South Korea becoming a global powerhouse in

memory and non-memory chips. Large companies will get receive a tax credit of 15%,

while

SMEs’

capital expenditure will get a tax break of 25%. Any additional investment

in chipmaking in 2023 will receive another 10% tax break. In addition, the Act

streamlines administrative procedures for chipmakers. Samsung announced in April

2023 that it would invest some EUR 212 billion into a new massive chip cluster with

five advanced chip-manufacturing plants around the Korean city of Yongin by 2042.

SK Hynix is also planning to establish a semiconductor cluster in the same city,

investing some EUR 85 billion. Semiconductors are a key export product for South

Korea, accounting for about 20% of its exports in 2022.

•

South Korea:

South Korea issued in February 2022 the

Special Act on

Strengthening and Protecting Competitiveness of National High-Tech

Strategic Industries

with the goal to reduce the administrative burden, speed up

relevant licensing processes, and subsidise training programmes in the

semiconductors sector and beyond.

South Korea:

In 2022 government started to apply a higher tax credit rate of 15% on

facility investment in the chip industry for conglomerates, up from 8%. The rate for

small and medium-sized businesses also rose from 16% to 25 %. In 2023, the

government started applying an additional tax credit rate of 10% on the amount of

investment, increasing year on year. The proposed plan could help the strategic

industries, including rechargeable battery makers, save 3.65 trillion won (USD 2.85

billion) in taxes in 2024.

South Korea:

In February 2022, the national government adopted a new technology

protection strategy to harmonise the different protection measures taken by various

national ministries to avoid leakages of core technologies. To give special funding to

the technologies that are considered strategic by the government, a Special Taxation

Act has been in effect since 01 January 2023. The Act sets out a precise list of 150

strategic technologies for which Korea-based manufacturing companies can receive

tax credits to the tune of 937.6 billion won (USD 711.2 million) in 2023. In April 2023,

the Ministry of Industry announced that the list would be updated to include 50 extra

technologies, bringing the list to 200 items.

Singapore:

Singapore’s

research priorities and funding have been detailed in the

Research Innovation Entrepreneurship Programme (RIE2025).

RIE2025 gives

priority to health, sustainability, digital economy, advanced manufacturing, and

security. RIE strategies respond to new technological and societal driving forces.

Singapore:

In February 2021, Singapore announced the establishment of the

Southeast Asia Manufacturing Alliances

(SMA), a tripartite alliance (public-

private) to secure supply chain resilience in the region. Grants up to SGD 1,.5 million

are provided by the Economic Development Board of Singapore (the Ministry of Trade

and Industry’s economic development body), while Enterprise

Singapore (the

government agency for business development) provides matching events and a

platform. A network of private sector

‘strategic partners’

offer preferential services

(reduced costs on leasing and logistics) for businesses that join the alliance.

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•

Singapore:

the

“30

by 30” policy–

whereby Singapore intends to be able to produce

30 % of its nutritional needs by 2030 and enhanced its food security, a major

endeavour to tackle food security issues.

Singapore:

the

Enterprise Innovation Scheme (EIS)

enhances tax deductions for

businesses on activities that boost innovation, such as R&D conducted in Singapore,

registration of intellectual property, and innovation carried out with Institutes of

Technical Education.

•

4. Public procurement mMeasures used in sSupport of domestic production

capacities, rResilience, and sSecurity of Supplysupply, etc.

•

US: Inflation Reduction Act (2022)

includes incentives for public procurements of significant

size to

‘Buy

America(n)’ programmes (support for US Postal Service to

‘electrify’

its fleet with

subsidies) and the implementation of the Defence Production Act (USD 500 m earmarked for

critical minerals manufacturing) without foreign bidders allowed.

US: ‘Buy American’ rules for

procurement (2021)

not covered under the WTO Agreement on

Government Procurement. The rules apply to all U.S. federal government agency purchases or

federally financed purchases of goods valued over the micro-purchase threshold (USD 10 000).

To be considered as being produced in the U.S., goods must be manufactured in the U.S. and at

least 55% of the cost of their components must come from the U.S. Waivers can be granted for

the public interest, non-availability or if the cost of U.S. products is unreasonable compared to

equivalent foreign products. IT and

‘commercial

off-the-shelf’ products are exempt. Impact on

the

US’s

international commitments under the Government Procurement Agreement (GPA) is not

yet clear.

Canada:

In the 2023 federal budget 2023, the Canadian government announced the that it

intended to

introduce new reciprocity requirements in federal public procurement;

these

would grant foreign companies an equivalent access to Canadian federal public procurement

than equivalent to that granted to Canadian companies in the respective third countries. Similar

reciprocity conditions will be required for foreign companies’ access

to Canadian tax credits as

well.

India:

India’s unified

licence scheme blocks any foreign company from receiving a licence to

exploit a 5G frequency. The goal is to foster the development of local companies in the sector.

India:

India’s 2017

‘Preference

to Make in India’ Order

gives preference to local production

of goods and services for a wide range of products on public procurement markets. The Order

introduces classes of suppliers (Class I, II and non-local suppliers) depending on how much local

content those suppliers use (above 50%, 50%> and 20%> respectively). Sensitive sectors such

as railways or defence require the supplier to be Class I or II for a bid to be eligible. Greatest

procurement priority is allocated to tender submissions with the highest percentage of local

content, and the government may mandate technology transfers.

China:

The

Eastern data, Western computing plan (2022)

aims to develop the digital

industry in China by constructing eight computing hubs and 10 data centre clusters in key areas

in eastern and western China. The plan and is led by the Ministry of Industry and Information

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Technology. The goal of the plan is to create the required infrastructure to allow enable the

development of Chinese industries in the fields of iInternet of tThings, AI, big data, and cloud

computing while relying on Chinese infrastructure.

•

China:

China’s New Infrastructure

plan (2020)

unlocked USD 1.4 trillion on a digital

infrastructure public spending programme in the sectors of 5G networks, industrial internet,

inter-city transportation and rail systems, data centres, AI, ultra-high voltage power transmission,

and new-energy vehicle charging stations. The goal is to stimulate the development of strategic

sectors for the Chinese economy and help the rise of Chinese

‘champions’

in those industries.

This effort has been compounded by similar infrastructure plans developed by 25 of China’s

provinces.

China:

China applies

a ‘Buy

National’

policy,

with a few exceptions. Under its Government

Procurement Law, China applies de facto market access barriers, including

the ‘buy

national

policy”’ and “‘indigenous innovation,”’

which give preferential treatment to goods and services

developed locally. In theory, foreign-invested companies in China are to be treated like domestic

companies, but in practice domestic companies are preferred.

China:

The medium- and long-term national plan for science and technology development

directs government agencies to buy products listed in certain procurement catalogues, which

include only qualified indigenous innovation products (with few exceptions).

Japan:

Under the

Economic Security Promotion Act (ESPA) (2022),

the government

designates designated critical, core and sensitive infrastructures in 14 sectors including aviation,

railways, gas, and oil etc. If a business operator in designated infrastructure is selected as a

core/ important operator by ministers in charge (not all operators), the government will have the

right to pre-screen any projects in those sectors, recommend remedies and potentially order

operators to change suppliers or abandon transactions.

•

5. Stockpiling of critical inputs

•

US:

The U.S. Departments of Energy (DoE) and Department of Defense (DoD), and the

Department of State (DoS) signed a memorandum of agreement (MOA) in February 2022 that

sets the foundation for a

critical minerals stockpile

to support the U.S’s. transition to clean

energy and national security needs. The DoD, which manages the national defence stockpile

(NDS), currently stockpiles critical minerals for national security purposes. The MOA creates a

new, inter-agency process for stockpiling minerals that enable vital clean energy technologies.

UK:

The UK is creating

strategic reserves

of water treatment chemicals,: monitoring stockpiles

of chemicals and exploring stockpile requirements.

Australia:

The Australian government committed more than $AUD 8 million in the 2023-2024

federal bBudget to establishing a

national emergency management stockpile (NEMS)

capability

to provide rapid access to critical emergency management goods and services to

augment state and territory emergency response and immediate relief capabilities. The NEMS is

comprised of three parts: (i) a national stockpile of Australian government-owned disaster goods

and services, and a seasonal strategic reserve of single-use consumables; (ii) a standing offer

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panel to facilitate the procurement, management and deployment of critical goods and services

in a crisis; and (iii) memoranda of understanding with other Australian government humanitarian

and crisis response capabilities. The pPanel is expected to be in operation by 1 July 2024 and will

run for 3 years, with options for two 1-year extensions. The panel will ensure a continuous and

reliable national stockpile of essential goods and services like emergency shelters, generators

and water purification systems, to augment state and territory emergency responses to

communities impacted by disasters.

•

Australia:

Australia maintains a national medicine stockpile storing medications, vaccines,

antidotes, and personal protective equipment to be used in case of supply chain disruptions in

the health sector.

China:

It is estimated that China stockpiles 1.5 million to 2 million tonnes of copper, 800 000-

900 000 tonnes of aluminium, and 250 000-400 000 tonnes of zinc. China is also believed to

have around 7 000 tonnes of cobalt, a key metal used in battery manufacturing.

China:

The government promotes the consolidation of Chinese companies into a handful of big

groups per sector, often state-owned or state- led. This is meant to increase their bargaining

power on international markets and to modernise the sector.

Japan: The Japan Oil Gas, Metals National Corporation (JOGMEC)

operates a national

stockpiling system of rare metals to secure long-term raw materials supply. Stockpiles are

sufficient to meet 60 to 180 days’

demand. In addition, under the planned revision of

the

Mining

Act,

Japan is to restrict access to rare -earth

resources in Japan’s exclusive economic zone

(offshore deposits). JOGMEC emphasised the

importance of confidentiality in the

stockpiling policy

since it is a

matter of national/economic/resource security.

This acts

also as a deterrent against potential coercive practices by third countries, especially in the case

of CRM critical raw materials over-dependencies on concentrated sources/limited suppliers. The

less public the information is, the more difficult a potential economic coercion becomes. (Japan

learnt a bitter lesson on rare earths in 2010).

JOGMEC’s stockpiling plan is classified

as it

includes information on selection of critical raw materials (CRM), actual quantities required for

each CRM, how / when to purchase, release CRMs and conduct test exercises, the exact location

of stockpiling facilities and how stocks are managed etc. The JOGMEC Act also includes

confidentiality obligations for companies participating in the stockpiling.

Japan:

As part of the its Economic Security Promotion Act (ESPA), the Japanese government of

Japan announced the creation of a

‘strategic

surplus

LNG’

system to ensure that LNG is

secured on a sustainable basis by utilising the procurement capabilities of companies. The

surplus LNG secured will be sold on overseas markets in normal times and to domestic operators

in times of emergency.

South Korea:

South Korea has a state-run reserve management and stockpiling of critical raw

materials at the national level. Under the Ministry of Trade, Industry and Energy (MoTIE), the

state-owned KOMIR (Korea Mine Rehabilitation and Mineral Resources Corporation), launched in

September 2021,

implements the government’s strategies and policies pertinent to the raw

materials, and. It also promotes foreign investment in overseas resource development. Moreover,

Under the strategy on critical minerals released in February 2023, the stockpile of critical

minerals is has been increased in order to suffice for 100 days, up from the current 54.

Moreover, the government has allocated the budget of KRW 28.3 billion (20 million euro) for the

stockpiling of cobalt in 2023.

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•

Singapore:

Particularly in the field of food, the government can use its discretionary power to

ensure a minimum quantity of private stockpiles, which need to be maintained for a stipulated

period (such as the Rice Stockpile Scheme). Given its exposure to imports from Malaysia and

Indonesia, Singapore has stockpiles of food to prevent crises. To affect negotiation with overseas

suppliers, the presence of the stockpiles is known but not the actual numbers to affect their

negotiation with overseas suppliers. Singapore maintains a national stockpile of two other

essential items, such as granite used in construction, and Personal Protective Equipment (PPE),

including masks, drugs, and medical supplies, following outbreaks of SARS in 2003 and H1N1 in

2009.

6. Prioritisation of supplies of goods and services

•

US:

The

Inflation Reduction Act

has domestic content requirements (clean electricity

production credit, electricity produced from certain renewable resources credit, and energy credit)

as well as local final assembly requirements (clean vehicle credit). These can be seen as an

heavily financial incentive to change the composition of the renewable energy, battery and

automotive supply chain, and to expand production and assembly in the US for the US market

and beyond on US soil, resulting from the improving economies of scale generated by US

production and the proximity of the electric vehicle supply chain.

US:

The

Defence Production Act

gives the US President the authority to expedite and expand

the supply of materials and services from the U.S. industrial base needed to promote the

national defence. DPA authorities may be used to:

▪

•

require acceptance and preferential performance of contracts and orders;.

provide financial incentives and assistance for U.S. industry to expand productive capacity

and supply needed for national defence purposes;.

provide antitrust protection for businesses to cooperate in planning and operations for

national defence purposes, including homeland security;.

The DPA provides authority to obtain information from businesses, including information

needed for industry studies.;

The US has established a DPA programme to provide loans, grants, and other financing to

build and expand the health resources industrial base.

•

UK:

The UK announced in its Integrated Review 2023 that it is working on a national supply

cChains and import strategy to support specific government and business action to strengthen

the country’s resilience in critical sectors.

UK:

Via the

UK Make

programme, the UK is encouraging development of domestic production

capacities for personal protective equipment within the health sector.

India:

The Ministry of New & Renewable Energy issued in January 2019 an

‘Approved

models

and manufacturers of solar photovoltaic modules’

(Requirements for compulsory

registration) complying with the Bureau of Indian Standards and. At the same time, it published a

list called entitled the

‘Approved

list of models and

manufacturers’

(ALMM). The list of

•

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manufacturers was recently updated in 2023, with an enlisted capacity of 22 389 MW and more

than 70 manufacturers. The module models on the list are only eligible for use in open access

and net metering projects along with government projects, government-assisted projects, and

projects under various government schemes and programmes. Although the implementation of

ALMM has been deferred by until 2024, ALMM protects the interests of Indian domestic

manufacturers.

•

China:

The

dual circulation strategy (2020)

calls for relying principally on China’s large

domestic market and leveraging/building its strengths, including comprehensive and deep supply

chains. Economic exchanges with the rest of the world are also encouraged, not discouraged, but

‘domestic circulation’ must be able to function autonomously in case of problems with foreign

supplies.

South Korea:

The government announced its

renewed strategy on critical minerals for

businesses

on 27 February 2023. The aim is

to help mitigate Korea’s reliance on imports

from a

selected certain few countries and maximise utilisation of domestic mineral resources,

contributing to supply chain stabilisation. Under the new strategy, 33 critical minerals with a

bearing on economic security are to be selected with regard to economic security; and out of the

33, 10 strategic critical minerals needed for stabilising the supply chain of chips and secondary

batteries will be prioritised for intensive management. For the 10 strategic critical minerals, the

government plans to cut by 2030 its dependency on imports from the current 80% to 50%; and

to increase recycling from the current 2% to 20%. Moreover, to provide strategic minerals for the

industry, KOMIR is currently carrying out 18 overseas projects in different stages of development,

which include projects relating to copper, cobalt, manganese and zinc project.

Taiwan:

Since 2013, Taiwan has developed its

offshore wind generation

capability through

public auctions. Since 2018, local content requirements have been obligatory for successful bids.

The latest rules and guidelines, adopted on 15 December 2023, maintain these requirements.

•

7. Trade, and investment measures: tariffs, export restriction, anti-coercion

measures, standards, etc.

•

US:

On 4 May 2023, the White House introduced a

standards strategy for critical and

emerging technologies (CET),

supplementing the 2021 national standards strategy. The CET

includes eight strategic technologies: (i) communication & networking; (ii) semiconductors &

microelectronics; (iii) AI & machine learning; (iv) biotechnologies; (v) positioning, navigation &

timing services; (vi) digital identity infrastructure & distributed ledger technologies; (vii) clean

energy generation & storage; and (viii) quantum information technologies. The strategy outlines

eight measures to strengthen US standard development organisations (SDOs) through 2024

federal budget funding, public-private partnerships, workforce upskilling, and collaboration with

international partners.

US:

The

‘Section

232 investigation’

was effectively concluded on 21 September 2022. The

White House announced that imports of neodymium-iron-boron (NdFeB) permanent magnets

threaten national security and that the Administration would implement a series of

recommendations proposed in the Department of Commerce report. The Department of

Commerce, however, rejected the imposition of any tariffs or restrictions on imports since

‘the

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current severe lack of domestic production capability throughout the magnet supply chain, tariffs

and quotas would have an adverse impact on consuming sectors and might incentivise businesses

to move operations incorporating NdFeB magnets offshore.’ The Department of Commerce also

argued that the national security of U.S. allies and partners was essential to U.S. national security,

partially basing its decision on Australia, Japan, and the EU’s reliance on rare earth minerals or

oxides. However, the report adds, the decision whether or not to impose tariffs or other import

restrictions may be imposed later is left open to re-evaluation as the U.S. develops its domestic

production capacity.

•

US:

Following the

Uyghur Forced Labor Prevent Act

(also known as the

‘UFLPA’),

which went

into effect in June 2022), US Customs and Border Protection officials have seized around USD 1.3

billion worth of imports. US Customs officials have confirmed that import detentions connected to

the law surged 63% from October 2022 through early January 2023, with 2, 600 seizures worth

USD 806 million. The majority of the detained imports were solar panels. However, as industry is

figuring out what can be shipped and what violates the law, the number of US seizures may drop.

US:

The

Export Control Reform Act of 2018

allows the US government to enact controls on

exports, re-exports, and transfers of emerging and foundational technologies if they could be

used to threaten the US national security of the US or if they give a qualitative military or

intelligence advantage to the US. Some 14 emerging technologies are identified, including biotech,

AI, and semiconductors.

US:

The Defense Production Act (DPA) sets up the

Committee on Foreign Investment in the

United States (CFIUS).

The committee can review foreign investments and real estate

transactions by foreign persons in the US in case those investments could present a risk to

national security. It can also impose conditions on such acquisitions or refer the case to the

President for decision. Australia, Canada, New Zealand, and the UK are exempted from review by

CFIUS, but the EU is not.

UK:

In March 2023, the UK launched

a new economic deterrence initiative (EDI)

to boost its

diplomatic and economic tools to respond to and deter hostile acts. With up to GBP 50 million of

funding over 2 years, the initiative will improve sanctions implementation and enforcement.

Currently, there is an ongoing review of export controls and emerging technologies (quantum, AI,

biotech and semiconductors) due for completion by the end-2023, with the aim to identify

potential gaps in the system. On outbound investments, the UK is working to develop the evidence

base to enable it to assess the potential national security risks posed by outward direct

investment (ODI). This work will inform how the UK can best calibrate its actions to respond

effectively to these risks.

UK: National Security and Investment Act (NSIA) (2021).

The NSIA sets up an FDI screening

regime with mandatory notifications to the government for acquisitions in 17

‘most

sensitive’

economic sectors, including defence, communications, and energy. The government can review

and potentially block acquisitions if they risk undermining

the UK’s national security.

Australia:

Reforms to the

Foreign Investment Review Board (FIRB)

in 2020 introduced a

mandatory notification procedure for acquisitions connected to

‘national

security business’ or

‘national

security land’ or linked to critical infrastructure. Critical infrastructure covers 15 sectors

including electricity, gas, water, ports, healthcare, and cloud services among others. The

government can order divestment or prohibit the acquisition if it finds that it could present risks

to national security. These reforms include measures to strengthen the existing frameworkby

means of an enhanced national security review of sensitive acquisitions, extra powers and

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resources to ensure foreign investors comply with the terms of their approval, and amendments

to streamline investment in non-sensitive areas. As of January 2021, with the implementation of

an updated foreign investment regime, the

government’s

focus has firmly been on national

security and compliance. Generally, the Treasurer approves the vast majority of applications.

However, FIRB has been increasingly willing to use conditions and undertakings as a mechanism

to increase the

government’s

oversight of more complex or sensitive investments. Undertakings

required from FIRB may include matters relating to governance, location of senior management,

listing requirements, market competition and pricing of goods and services (e.g. that all off-take

arrangements must be on

arm’s-length

terms) and other industry-specific matters. FIRB has also

issued a set of standard tax conditions that apply to those foreign investments that pose a risk to

Australia’s

revenue.

•

India:

In October 2023, India launched a new online authorisation system for imports of laptops,

tablets, and personal computers to monitor the quantity of imports and where they originate

from. The government may ask laptop, server and other IT hardware importers to provide an

international certification attesting that their product is from a trusted source before allowing it to

be imported a licence-free import of it.

India:

The Department of Science and Technology has launched a

‘grand challenge’

on the

development of standards for electric vehicle charging infrastructure to help develop the local

industry.

India:

With effect from April 2022, the Indian government has imposed a basic customs duty on

the import of solar PV photovoltaic cells and solar PV modules at of 25% and 40% on the import

ofrespectively. The aim is solar PV modules to reduce the influx of imported PV cells and modules

and increase the domestic manufacturing.

India:

India revised its FDI policy in 2020 to make foreign acquisitions of Indian companies more

difficult. Notably, companies from countries that share a border with India (China being the target

here) must undergo a security analysis before an acquisition can go through. However, the

government may decide to scrutinise acquisitions by any foreign entity. The Indian government

has published for guidance a list of sensitive sectors in which it is likely to scrutinise acquisitions.

Sectors include broadcasting, telecommunication, satellites

–

establishment and operation, private

security agencies, defence, civil aviation and mining and mineral separation of titanium-bearing

minerals and ores.

China: The Export Control Law (2020)

is China’s primary legislation for restricting exports of

goods and technology for national security and public policy reasons. In addition to national

security, it is suspected that China wields export controls to ensure preferential access of its

domestic industry to inputs and to safeguard or establish technological supremacy of its industry,

as well as for coercion of foreign governments, voters and businesses. Export controls of concern

are numerous, but include those on rare earths, urea, gallium and germanium, drones and

graphite. China’s export controls are broad, often vaguely formulated, lack transparency and are

poorly justified.

China: The Catalogue of Technologies Restricted and Prohibited for Export (2002),

which

does not fall under the Export Control Law, additionally restricts the export of technologies. The

legal basis for adding technology to the catalogue is both broad and vague, ranging from national

security to compliance with any Chinese legislation. It is believed that the primary purpose of the

export controls on technologies on this catalogue is to safeguard China’s technological edge in

industries where it is dominant. It includes, notably, technologies for processing rare earths,

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including the production of rare-earth magnets, a key input to the green and digital transitions

used in electric vehicles, robotics and wind turbines.

•

China:

Stringent data protection rules such as the

Data Security Law, Personal Information

Protection Law (PIPL)

and the

Measures for Security Assessment for Cross-Border Data

Transfers

restrict the flow of data out of China.

Japan:

In June 2023, the Government of Japan expanded the sectoral coverage of its inbound

FDI screening to cover all 11 materials designated as “specified

critical materials (SCMs) under

the Economic Security Promotion Act (ESPA).

South Korea:

Promotion of Tech acquisition through overseas mergers & acquisitions is

promoted for areas where it is difficult to secure

‘core

tech’ among essential items in the

domestic value chain. Acquisition funds of over EUR 2 billion have been made available for

advisory, consulting, and follow-up integrated management.

Taiwan:

The

Foreign Trade Act (2019)

provides the

legal basis for managing Taiwan’s export

control regime and the trade of Strategic High-Tech Commodities . The Strategic High-Tech

Commodities entity list currently includes over 7,000 items, for which Taiwanese exporters must

require an export license from the International Trade Administration of the Ministry of Economic

Affairs of Taiwan.

Taiwan:

The

National Security Act

(amended in June

2022)

aims to prevent the leakage of

national core key technologies. The Act imposes fines of up to NT$100 million (approx. EUR 3

million) and imprisonment for up to 12 years for the illegal transfer of national core key

technologies. In December 2023, Taiwanese authorities issued the

critical technologies list

(implemented as part of the National Security Act) that designates 22 technologies believed to be

Taiwan’s leading technologies requiring immediate protection. The list, subject to review in early

2024, covers five domains, including (1) defence, (2) space, (3) agriculture, (4) semiconductors,

and (5) information and communication security.

Taiwan:

In June 2022, authorities amended the

Regulations Governing the Approval of Investment or Technical Cooperation in

Mainland China,

which now require Taiwanese firms to obtain approval if they plan to sell their

local assets and factories or transfer their equities in China to avoid the risk of technology

leakage.

Taiwan:

Stricter administrative rules issued in 2022 on FDI screening processes aim to prevent

circumvention by PRC firms. These rules follow changes made in 2021 to tighten the definition of

a “PRC investor” so that a third-area

company can also be defined as such.

•

8. International partnerships

•

–

Canada:

The US and Canada announced in March 2023 the intention to set up an

Energy Transformation Task Force

to coordinate their efforts on critical clean energy

technologies and the related supply chains, including critical raw materials.

The task force’s

stated function is to “‘accelerate

cooperation on critical clean energy opportunities and

supply chains, including but not limited to, securing and strengthening renewable energy and

electric vehicle supply chains, critical minerals and rare earths, grid integration and resilience,

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advanced and conventional nuclear energy and other areas”’

The task fForce will be chaired

by the U.S. Special Presidential Coordinator for Global Infrastructure and Canada’s Deputy

Prime Minister.

•

–

UK:

The two countries announced on 8

June 2023 the intention to negotiate a

bilateral

critical minerals agreement.

In the intentions of President Biden and PM Sunak,

this targeted agreement will ensure that five critical minerals necessary for batteries

–-

cobalt, graphite, lithium, manganese, and nickel

–

that are extracted or processed in the

United Kingdom count toward sourcing requirements for clean vehicles eligible for the

Section 30D clean vehicle tax credit of the Inflation Reduction Act.

–

India:

The two countries signed an MoU on establishing a semiconductor supply chain

and innovation partnership. This will seek to establish a collaborative mechanism on

semiconductor supply chain resiliency and diversification, in line with the US’s CHIPS and

Science Act and India’s Semiconductor

Mission. The MoU also aims to leverage the

complementary strengths of both countries and facilitate commercial opportunities and

development of semiconductor innovation ecosystems. It also envisages mutually beneficial

R&D, talent, and skill development.

–

Australia:

In May 2023, Australia and the United States signed the Compact on

Critical Minerals and Clean Energy. On 2 October 2023 saw the inaugural meeting of the

Australia- US Taskforce on Critical Minerals that arose from that the compact took place. Its

aims is to expanding reliable, responsible and secure global access to critical minerals.

–

Japan:

The two countries signed a bilateral

agreement on critical minerals

on 28

March 2023. The agreement is expected to make Japanese companies eligible for Inflation

Reduction Act subsidies. It covers five critical raw materials used in electric vehicle supply

chains (cobalt,; graphite,; lithium,; manganese; and nickel), and provides forsets out to

maintaining the current practices of not imposing import and export limitations while

safeguarding environmental and labour rights. It will be revised every two 2 years.

–

South Korea:

In May 2022, the two countries signed an MoU on the establishing a

‘Supply

Chain and Commercial Dialogue’ and upgrading their existing working-level industrial

cooperation dialogue platform. Under the agreement, the two countries plan to hold an

economic security dialogue between their respective national security councils once a year

and discuss a wide range of industry and economic issues, including resilient supply chains

of semiconductors and other high-tech items, the digital economy, health care technologies

and exports control. They also agreed to boost cooperation on R&D, and create more

business opportunities. On the occasion of President Yoon’s attendance at the 2023 APEC

summit in San Francisco, US companies GM, DuPont, IMC and Ecolab declared commitments

to investing in South Korea on the occasion of President attendance at the 2023 APEC

summit in San Francisco.

Canada

–

South Korea:

South Korea’s

Ministry of Trade, Industry and Energy has arranged

MoUs between LG Energy and several Canadian companies to reinforce critical mineral

supply chain cooperation. These MoUs will help Korean companies to establish new supply

chains in North America for secondary batteries and electric vehicles, particularly in

conjunction with the US Inflation Reduction Act. Through these deals, LG Energy Solution will

be able to tap into Canada’s stable supply stream of critical minerals for manufacturing

secondary batteries in North America, and KOMIR, the Korea Mine Rehabilitation and Mineral

Resources Corporation KOMIR, will be able to provide better support to private sectors with

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data on Canada’s mining investment.

•

–

Canada:

The two countries announced a new partnership in March 2023 to increase

their cooperation on the supply of critical raw materials. This new

UK-Canada Critical

Minerals Supply Chains Dialogue

has the stated objective of integrating the critical raw

materials supply chains of Canada and the UK, driving higher ESG standards, and boosting

research and development in the field.

–

Australiasupply chain resilience capability building initiative.

This was set up in

February 2022 with the goal of increasing shared understanding and insight about common

dependencies and critical supply chain risks. The UK and Australia are developing a joint

supply chain resilience initiative to engage interested countries in developing and improving

public-sector approaches to managing critical supply chain risks. This will initially begin with

a pilot project to determine further scope. The initiative will support countries that want to: -

improve public- sector approaches to building critical supply chain resilience, -strengthen

global supply chains through shared learning and coordinated action, -build greater

transparency into key global supply chains, and -promote international action to respond to

supply chain disruptions. It will include: - a series of modules designed to support the

capability of interested partner governments, and will also share approaches to

strengthening critical and vulnerable supply chains and enhancing global supply chain

resilience for mutual benefit.

–

Australia:

A working group on critical minerals was set up in 2021. Australia and the

UK are continuing to identify investment opportunities that would bolster Australia’s critical

minerals sector and the UK’s manufacturing and energy ambitions.

–

Japan Critical Minerals Memorandum of Cooperation:

The UK and Japan have

agreed a memorandum of cooperation (MoC) establishing a new partnership on critical

minerals. The MoC delivers on a specific commitment made by leaders in the Hiroshima

Accord. It will provide a framework for deepening critical minerals cooperation between the

two countries and promote dialogue on a range of areas including: research and innovation,

critical minerals data and traceability, industry partnerships and public-private cooperation,

infrastructure projects in third countries, cooperation to support developing producer

countries, cooperation on technical standards and environmental, social and governance

standards. The MoC was signed by Kemi Badenoch, the UK Secretary of State for Business

and Trade, and Yasutoshi Nishimura, the Japanese Minister of Economy, Trade and Industry

of Japan, at the G7 Trade Ministers’ Meeting in Osaka on 28

October 2023.

–

South Korea:

In February 2022, the two countries signed the Critical Supply Chain

Resilience MoU signed in February 2022. The MoU called for holding both senior-level and

working-level talks on a regular basis to exchange policy measures and information

regarding supply chain issues and to promote two-way investment and trade. The UK and

the South Korea plan to explore deeper collaboration, including by sharing approaches to

building mutual capability, coordination of joint principles and responses to economic shocks,

and working together in multilateral forums including, but not limited to, G7+ and G20.

–

South and Southern Africa

announced a new partnership in November 2022 on

minerals for future clean energy technologies to promote increased responsible exploration,

production and processing of minerals in South and Southern Africa.

–

Taiwan:

Announced On 14 November 2023, the UK and Taiwan announced an

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enhanced trade partnership focused on three priority areas: (i) investment; (ii) digital trade;

and (iii) renewable energy and net zero. The two partners agreed to cooperate on green trade

by developing energy infrastructure, supporting offshore wind deployment in Taiwan by

developing ports capacity and financing models, and improving health and safety

implementation. Additionally, they agreed to collaborate in emerging energy technologies

and seek to remove barriers to trade in environmental goods and services, and work

bilaterally to build a circular economy, develop skills and share best practices.

•

Australia

–

India:

The two countries have concluded a bilateral commercial cooperation

over rare earth elements to reinforce supply chains between the two countries in these

sectors.

Australia

–

South Korea:

in December 2021, the two countries signed an MoU on

cooperation in critical mineral supply chains to further strengthen cooperation in resources

and energy. This builds on previous commitments outlined in their 2019 MoU on energy and

mineral resources cooperation.

India

–

Japan:

The two countries signed an MoU on semiconductor design, manufacturing,

equipment research, and talent development to bring resilience to the semiconductors supply

chain.

Australia

–

India

–

Japan:

Supply chain resilience initiative to cooperate on supply chain

resilience in the Indo-Pacific region. Cooperation consists of sharing of best practices on

supply chain resilience; and holding an investment promotion/buyer-seller matching event.

Australia

–

Singapore:

The two countries launched the Australia

–

Asia Sun Cable project

in 2022. The goal is to develop physical interconnections between Singapore and Australia’s

electric grids, and

to reinforce Singapore’s access to green electricity via massive

investments in solar farms in Australia.

Japan

–

United Arab Emirates:

On 17 July 2023, on the margins of a state visit by the

Japanese Prime minister that produced 23 bilateral agreements on strategic technologies

and critical raw materials, Japan and the UAE signed a memorandum of understanding for

the supply of clean iron and steel. As part of the MoU, the parties will develop a joint

framework for collaboration over the logistics and digital supply chain requirements, and

share information and expertise on industry best practices. Abu Dhabi Ports will be

responsible for providing the land for new plant, in the KEZAD Musaffah economic zone. It

will also offer maritime and logistics services for the supply of iron ore to the plant, and the

export of the materials around the world. Emirates Steel Arkan will provide

‘extensive

decarbonisation expertise’ and use clean and green energy sources, including solar and

hydrogen, to power the plant.

South Korea

–

Uzbekistan:

The two countries signed MoUs in December 2021 to establish

a communication channel for energy, cooperate in the production of rare metals, and join

efforts to develop industrial technology for electric vehicles.

South Korea

–

Indonesia:

South Korea and Indonesia signed a total of five MoUs in

February 2022 to boost bilateral cooperation in the supply chains of key minerals and the

electric car sector. The MoU on key minerals in particular called for sharing information

between the two ministries of trade and industry and supporting joint related projects so as

to help ensure the countries'’ stable supplies of major industry items.

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•

South Korea

–

the Philippines:

In October 2022, the two countries agreed during their

annual economic cooperation committee to sign an MoU on the supply of critical minerals

and other raw materials for industry purposes, and to launch working-level talks for on the

details. Under the MoU, a new director-level entity on supply chains is expected to be set up.

South Korea

–

Chile:

In October 2022, on the occasion of the bilateral dialogue at prime

ministerial level, the Korea Mine Rehabilitation and Mineral Resources Corp (KOMIR) signed

an MoU with its Chilean counterpart on the supply of mineral resources.

Chip 4 Alliance (US, Japan, South Korea, and Taiwan):

Announced in March 2022, the

Chip 4 Alliance is a US-led cooperation forum for governments and companies to discuss

and co-ordinate policies on semiconductor supply chains, workforce development, R&D,and

subsidies.

The Quad (US, Australia, India, and Japan) has set up a Critical and Emerging

Technology Working Group

to monitor and improve the security of supply chains for

critical technologies. The

Quad’s

CET Working Group promotes global technology markets

and standards based on openness, diversity, trust, and resilience. The CET Working group

cooperates on technical standards,; 5G,; horizon scanning; and technology supply chains.

Indo-Pacific Framework for Prosperity (IPEF) Supply Chain Agreement with the US,

South Korea, Japan, India, Australia and ASEAN members:

The parties signed the

agreement in 2023 to: (i) promote regulatory transparency in areas which may impact

supply chains; (ii) develop a shared understanding of global supply chain risks through each

pParty identifying their critical sectors and key goods in their supply chains; (iii) monitor and

address supply chain vulnerabilities; and (iv) promote responsible business conduct and

transparency in terms of upholding labour rights in supply chains.

•