The European Union is set to propose a law to boost green industry with state aid and a European Sovereignty Fund to keep the businesses from moving to the United States, European Commision President von der Leyen said on Tuesday. In a speech, von der Leyen said the measures would be part of EU’s Green Deal industrial plan to increase chances of Europe becoming a hotspot for clean technology and industrial innovation, as the bloc moves towards net-zero emissions by 2050. The EU is concerned that European companies will move to the United States, which has a $369 billion scheme to subsidize energy transition technologies.

“To help make this happen, we will put forward a new Net-Zero Industry Act,” von der Leyen said. “The aim will be to focus investment on strategic projects along the entire supply chain. We will especially look at how to simplify and fast-track permitting for new clean tech production sites,” she added.

“To keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU,” von der Leyen said.

“This is why we will propose to temporarily adapt our state aid rules to speed-up and simplify. Easier calculations. Simpler procedures. Accelerated approvals,”

“I don’t think massive new state aid models do anything good for Europe,” Danish Economy Minister Poulsen said.

Von der Leyen acknowledged that state aid alone could create an unfair environment and “fragmentation” of the EU single market. She pointed to EU funds for solution.

“To avoid a fragmenting effect on the single market and to support the clean tech transition across the whole Union we must also step up EU funding,” von der Leyen said. “For the medium term, we will prepare a European Sovereignty Fund as part of the mid-term review of our budget later this year.”

The plan was welcomed by several EU countries which were quick to underline the importance of EU funding to even the playing field.

“It has to be implemented through European mechanisms that ensure equality within the European space,” Portuguese finance minister Medina said. “The smaller European countries cannot lose to the larger countries in an internal competition.”

Italian Finance Minister Giorgetti said the EU financing scheme should be modeled on the bloc’s existing €800 billion recovery fund, which offers grants and loans, and on the EU’s loans-based SURE programme to support employment.

Von der Leyen first laid out her idea of a Sovereignty Fund in September. She did not give an indication of the size of the planned fund. Such a fund does not have the support of all EU governments as of yet, including Germany.

But von der Leyen said both the Sovereignty Fund, as well as an intermediate pool of cash that could be mobilized faster – a “bridging solution” – would offer both grants and loans in targeted support. She said the Commission was now working on what the needs of the green industry were.