Mon. Jun 5th, 2023
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EU minister have endorsed their mandate for the European Chips Act. Photo by ColiN00B on Pixabay

Brussels, 1 December 2022

The ministers held a meeting at the Competitiveness Council (Internal Market and Industry section) in Brussels, where they agreed on a general approach to a draft regulation on the chips act, a draft regulation on the protection of geographical indications of craft and industrial products, and a draft regulation on corporate due diligence in the field of sustainability. This was the last Council under the Czech Presidency to address the issue of increasing competitiveness and strengthening the market in the European Union.

“Today we have successfully concluded the topic of competitiveness, the internal market, research and innovation and industry. During our Presidency, we focused in particular on strengthening the resilience of the internal market in the context of the Russian aggression in Ukraine. We have managed to strengthen the EU economy, thanks to which we are now better prepared for crises than ever before,”said Minister of Industry and Trade Jozef Síkela.

EU ministers have reached agreement on a general approach to the chips act. This will substantially increase the resilience of EU industry by ensuring a stable supply of chips to businesses. “Over the past year, the supply of chips has been disrupted in Europe, threatening the automotive, energy, and healthcare sectors, as well as strategic sectors such as defence, security and space technology,” said Minister Síkela, adding: “The European Union wants to be one of the industry leaders in the chip market in the future.” The ambition is to more than double its current share of the global production of state-of-the-art and sustainable semiconductors to 20% of the market by 2030. The aim is not only to reduce dependency but also to seize economic opportunities, as the global semiconductor market is expected to double by the end of the decade.

The chips act, which is one of the priorities of the Czech Presidency, pursues the objectives of the New Industrial Strategy and the Digital Compass 2030, aims to address the shortage of semiconductors for the EU industry and to ensure the future technological sovereignty of the EU. The aim is to reduce the vulnerability of Member States caused by the disruption of one of the most important supply chains. The chips act targets investment in R&D, support for pilot lines, promotion and facilitation of the construction of production capacities, including design centres in the EU, and the establishment of a coordination mechanism between Member States and the European Commission to monitor semiconductors.

Another key point was the regulation on the protection of geographical indications for craft and industrial products. The regulation is intended to improve the protection of craft and industrial products protected by geographical indications at EU level, which will bring many benefits and contribute to the recovery of the European economy. “The proposal aims to encourage innovation and investment in craft production. We want to help craft producers, especially SMEs, to promote their products and protect their traditional know-how,” said Minister Síkela.

The ministers also agreed on a draft directive on corporate sustainability due diligence. The directive, which is the responsibility of the Ministry of Justice, will be an important tool for setting common standards on issues of human rights violations and social and environmental obligations by companies. The Directive sets out a horizontal framework that will encourage businesses operating in the internal market to contribute to achieving the transition to a climate-neutral and green economy in line with the Green Deal and the UN Sustainable Development Goals. The Directive will also guarantee uniform and transparent rules for businesses across the internal market, thus avoiding fragmentation.

Last but not least, ministers discussed the 2022 report of the Single Market Enforcement Taskforce (SMET). Ministers praised the contribution of the SMET in removing obstacles to doing business in the internal market, in particular in areas such as the posting of workers or the deployment and construction of renewable energy sources.

Press conference

Source – Czech EU Council Presidency


European Chips Act: EU Council adopts position

The Council has adopted its position (‘general approach’) on the proposed regulation establishing a framework of measures to strengthen Europe’s semiconductor ecosystem, better known as the ‘Chips Act‘.

The Chips Act addresses the current shortage of semiconductors in Europe. With the Chips Act, the EU aims to double its global market share in semiconductors from 10% to at least 20% by 2030 in order to ensure the EU’s future technological sovereignty.

Chips are amongst the most important cutting-edge technologies that exist today, but the EU currently does not have sufficient capacity to design and produce its own mature and advanced chips. The EU has to reduce its overdependence on global semiconductor leaders in Asia and the USA and, with the Chips Act, it is taking matters into its own hands.

Jozef Síkela, Czech Minister of Industry and Trade

Infographic – The EU Chips Act: See full infographic

Reducing dependencies

Chips are essential for a wide range of technological and digital products, such as cars, household appliances and electronics. Due to geostrategic issues and supply chain disruptions, European industry is currently facing challenges in the supply of semiconductors. The Chips Act aims to reduce the EU’s vulnerabilities and dependencies on foreign actors. This will improve the EU’s security of supply, resilience and technological sovereignty in the field of chips.

Financial architecture

The Chips Act will mobilise €43 billion in public and private investments, focusing on three pillars:

  • the Chips for Europe Initiative, supporting technological capacity building and related research and innovation
  • a new framework to ensure security of supply and resilience by attracting increased investment
  • a mechanism to monitor the semiconductor supply chain and coordinate actions in crisis situations

The Commission’s Chips Act proposal provides that, of the total amount, €3.3 billion will be dedicated to pillar 1, the Chips for Europe Initiative. The Council clarifies that the €1.65 billion included from Horizon Europe should be committed to research and innovation, and the funding from the Digital Europe programme should finance capacity-building activities.

To respect the existing interinstitutional agreement on the Multiannual Financial Framework, the Council’s mandate does not include reallocation of decommitted funds from Horizon Europe, as was proposed by the Commission. As this means a reduction of €400 million in the overall funding coming from the Digital Europe programme, the Council’s position adopted today is accompanied by a statement asking the Commission, together with the member states and the European Parliament, to look for alternative solutions to maintain the overall budget of €3.3 billion.

European Chips Infrastructure Consortium

The regulation proposes the option of a new legal instrument: a European Chips Infrastructure Consortium (ECIC). The ECIC would be a legal entity that could implement actions and other tasks funded under the Chips for Europe Initiative.

The Council clarifies the voluntary nature of establishing an ECIC and specifies its openness to different legal forms of cooperation and other participants. It also clarifies rules for the selection of proposals for funding that will not be based on a specific legal form of cooperation.

Council’s mandate

Other proposed changes to the Commission proposal include clarifications related to:

  • the definition of a ‘first-of-a-kind’ semiconductor manufacturing facility
  • the formulation of the general and operational objectives and the content of the Chips for Europe Initiative
  • the establishment of a European network of competence centres in semiconductors, integration technologies and system design
  • the requirements to be met by Integrated Production Facilities and Open EU Foundries, in particular as regards positive spill-over effects on the EU’s semiconductor value chain
  • the design of mandatory information requests during a crisis stage
  • the scope and implementation of the emergency toolbox
  • the enforcement of information and notification obligations and of compliance with priority rated orders through fines and penalties
Next steps

The general approach agreed today formalises the Council’s negotiating position. It provides the Council presidency with a mandate for negotiations with the European Parliament, which will start as soon as the Parliament adopts its position.

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