Brussels Shortly before the EU Commission’s decision on how to deal with nuclear energy in the future, Internal Market Commissioner Thierry Breton spoke out in favor of classifying nuclear power as climate-neutral. “It is simply not feasible to double our electricity capacities without nuclear power,” said Breton in an interview with Handelsblatt and other business media.
26 percent of Europe’s energy supply is currently covered by nuclear reactors. “In order to achieve climate neutrality, we have to use everything that is available to us,” warned the French commissioner.
In December, the EU wants to define in the so-called taxonomy which investments will be considered green in the future. This classification could have far-reaching consequences for the financing of new power plants.
France, which relies heavily on nuclear energy in its climate strategy, vehemently calls for nuclear technology to be classified as sustainable. Germany is against it. There is a risk of a violent dispute with the future traffic light coalition.
In view of high energy prices and persistent delivery bottlenecks, Breton sees a “strong risk of inflation”. That will be one of the important topics in the coming year. In order to alleviate the supply problems, he advocates strengthening the European chip industry.
Breton announced that it would present the “EU Chips Act” in the first quarter of next year, which should facilitate subsidies. “We want to be able to offer the same funding as the USA, Japan, China and Korea,” he emphasized.
Against the background of the alarming pandemic situation and the high demand for booster vaccinations, the Commissioner assured that the vaccine shortage in Europe was finally overcome: Year can deliver. “
Read the entire interview here
Mr Breton, the new government is just being formed in Berlin, and a serious conflict with Brussels is already emerging. Will the Commission classify nuclear power as a sustainable technology despite German concerns?
We haven’t made the decision yet, we’re working on it. But I have already met with the future Chancellor, it was a week ago. Olaf Scholz and I had a good, very open conversation, but I’ll keep the discussion to myself. It is clear that we also have to find a regulation for gas, which is particularly important for Germany.
Specifically, it is about the taxonomy, which should give investors clarity about which investments will be considered sustainable in the future. The Greens don’t believe in a Franco-German barter of “gas for nuclear power”.
In order to generate clean energy and achieve climate neutrality, we have to use everything that is available to us. We have to double the capacity of electricity production in Europe within the next 30 years. The consequences of CO2 emissions are clear to everyone today. But of course it is better to generate electricity with gas than with coal.
Can Europe achieve its climate goals without nuclear power?
It’s impossible, it’s perfectly clear to me, and I think everyone understands that. 26 percent of our energy supply comes from nuclear reactors. It is simply not feasible to double our electricity capacity without nuclear power.
There are capacity problems not only with the power supply. We also see acute bottlenecks in industry. The result is rising prices.
We are faced with different types of bottlenecks. There is a shortage of skilled workers and there are problems with raw materials, energy and semiconductors. Many factories were closed during the pandemic and had to be restarted. Now production does not meet demand.
What can the EU do about it?
We analyze the bottlenecks in all supply chains and will present a strategy in the first quarter. This is very important for our companies and our medium-sized businesses. In the auto industry in particular, a lot of sales are lost due to delivery problems. Unfortunately, the semiconductor shortage will continue for the next few quarters. Even if the peak of the supply crisis is probably behind us, we probably won’t see much improvement before summer. That drives the price level.
So far, inflation has been played down in Brussels.
When resources are scarce in many sectors, there are consequences. We have a strong risk of inflation. That will be one of the important issues in the coming year and we have to address it.
You have set yourself the goal of doubling chip production in Europe. But companies are investing elsewhere. Samsung has just announced the construction of a chip factory in Texas. Is Europe going empty-handed?
First of all, Samsung’s decision came as no surprise to me, it wasn’t exactly the best-kept secret. This does not stand in the way of our goal of doubling the European share of global chip production. I said before the pandemic: Because we need more and more semiconductors, we have to strengthen European production.
And should the state give a lot of support?
The numbers are clear. The demand for semiconductors will double in the next ten years. The chip market is currently worth $ 500 billion and will be $ 1 trillion in 2030. The manufacturers always produce just as much as they need, they depend heavily on the economic situation. You don’t want to produce too much, because then the price would drop. It’s similar to the oil industry.
What does this mean for the EU?
It is clear that the production capacities that exist today are not sufficient to meet the growing demand. Currently ten percent of the chips produced worldwide are manufactured in Europe, ten percent in the USA. That means: 80 percent of the chips come from Asia, mostly from Taiwan, followed by Korea and China. The chips that we need for high-speed computers, edge computing and networked driving, chips below five nanometers in size, are mainly manufactured in Asia.
Is Europe oversleeping this race for the future?
Building a chip factory is more complex than building an airplane. There are only about ten companies that can do this at all. TSMC, Samsung, Intel, for example, and smaller providers in Europe such as Infineon, NXP and Bosch. All of these companies are thinking about how to meet the increasing demand.
You want to lure these companies to Europe. How exactly is that supposed to work?
We are the largest market and have great research institutions like Imec in Belgium and Fraunhofer in Germany. For geopolitical reasons, too, it makes sense for companies not to concentrate their production in one region. I don’t think I’ll have to draw you a map for that. You know what I’m talking about: Taiwan. I have therefore been in discussions with the companies for many months.
The key question is: How much subsidy do you offer?
We know that it is very expensive to invest and we are ready to take risks. We can offer subsidies, especially for groundbreaking technologies. But we need a comprehensive legal framework to welcome new investments. Because we want to be able to offer the same funding as the USA, Japan, China and Korea. That is why I said to Commissioner Ursula von der Leyen: Now is the right time to present an EU Chips Act.
Europe already has many laws, what is missing are chip factories.
Wait for it. I have just visited the location these companies want to invest in. The companies are very demanding, they need a lot of space. I won `t tell you more.
Very interesting, you were recently in Dresden.
I’m everywhere. Last week I was in Bulgaria, Slovakia, Romania, as well as France and Italy. But yes, I was also in Dresden, a location that is very important. You need a lot to set up a chip factory. Qualified employees, water and subsidies to limit the risk and, most importantly, a stable power supply. Incidentally, that’s one of the reasons why I believe in nuclear energy.
Time is running out. When do you present your Chips Act?
I would like to do it before Christmas, that probably isn’t possible. But we are finalizing the bill. It will be presented early next year, during the French Presidency. We do not expect any difficulties with parliament or the member states.
For companies, the crucial question is what type of chips can be subsidized by the state. Only the chips of the future, i.e. smaller than five nanometers, or others too?
Our competition law instruments have so far been geared towards promoting future technologies. I also spoke about this with my colleague, Competition Commissioner Margrethe Vestager. Everyone now understands that the focus on future technologies is absolutely important, but we also have to make sure that our economy remains resilient in times of crisis. After all, it is about the geopolitical balance of power.
What do you mean?
We need to understand the geopolitics of critical supply chains. In the case of vaccines, we saw it when the US closed its borders. We therefore have to see where our strengths lie so that we can use them in an emergency. If we closed our borders, there would be no more chips in the rest of the world, as all manufacturers depend on machines from ASML from the Netherlands. To make this clear does not mean promoting protectionism, but rather creating the right balance of power. Just as we did with vaccines.
Where do we stand with the vaccine supply? The fourth wave has hit Europe, and the fear of new variants is growing. Are our supplies enough?
A year ago we had the problem that there were no production facilities in Europe for the two vaccines that were approved first. We had to start from scratch, build capacities, like in a war economy. We are now making 300 million doses of vaccine a month and the number is increasing, so we will soon be shipping four billion doses a year. There are no longer any supply problems. We started from scratch and are now the world’s pharmacy. That’s a great success.
However, the World Health Organization (WHO) criticizes the fact that Europeans get booster vaccinations instead of immunizing the rest of the world first. This results in the risk of ever new virus variants.
I heard that statement. But I think there is a misunderstanding. We supply vaccine to 150 countries and it takes less than a month to produce vaccines to boost the entire EU adult population.
Mr Breton, thank you very much for the interview.
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