New industrial policies

A rapid and sustainable industrial transition requires economic policies, and therefore public intervention, capable of supporting far-reaching transformations in industrial production. The new industrial policies, initiated by the launch of the Green Deal industrial plan in Europe or the US Inflation Reduction Act, or the support that China is giving to this sector, are important in steering production activities towards a greater attention to sustainability issues. Driven by the objective of decarbonizing the economy and, in the European context, reindustrializing it, these policies cover various areas of public action that are central to ensuring the success of the environmental transition, such as energy policy, eco-design and circularity rules for materials, the financing of production activities, innovation and training policies and international trade rules.

Industry is directly responsible for around 20% of the world's greenhouse gas emissions, and for almost 40% if we include emissions from the associated energy production. It also has other significant environmental impacts, including the discharge of pollutants into water and soil and the production of waste. Heavy industries, which produce the basic materials for manufacturing, are the biggest emitters (iron and steel, cement and ceramics, chemicals). The transformations needed to decarbonize industrial processes and reduce the material footprint of the economy will involve major changes in the type of energy inputs and the supply of materials, and the development of new industrial activities that are key to decarbonization, which will have consequences for global supply chains.

The aim of IDDRI's activities is to identify the elements of an industrial strategy that is compatible with Europe's sustainability objectives. Particular attention is being paid to demand-side policies (circular economy, material and energy efficiency and sufficiency), to the management of distributional and social issues, particularly in the context of declining industries linked to fossil fuels, and to the issue of adapting international trade to the challenges of industrial transition.