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Abstract

Industrial policy is back in the mainstream of economic policy. The Covid pandemic and ensuing supply chain disruptions, as well as intensifying geopolitical competition, have led decision mak- ers and scholars to reconsider the roles of public policy and state intervention in the economy. Moreover, as the EU pushes to transition to a climate neutral economy, China and the US have supercharged the competition for technological leadership and market shares in key clean tech- nologies. The EU has responded to this challenge with different industrial policy initiatives, in- cluding the Green Deal Industrial Plan and the 2023 Net Zero Industry Act (NZIA). Yet industrial competitiveness remains one of the main priorities across the political spectrum. Given this renewed interest in industrial policy across the EU, there is an urgent need for a clearsighted approach to industrial policy – what goals it should pursue, what principles it should be based on, and how it should complement existing policies. As energy-intensive industries in Europe struggle to transform and the position of EU manufacturers in global markets for key clean technologies is increasingly contested, we argue that a renewed industrial policy effort is needed that sets out to change the structure of the economy in the pursuit of climate-neutrality.