Innovation and R&D Although the objectives of the EGD are largely focused on emissions reductions and nature positivity, innovation is a central enabler to help Europe meet its climate targets.68 Currently, the EU remains dependent on the import of key renewable technologies,69,70 threatening a similar reliance as was experienced with imported natural gas and that resulted in the 2020 energy crisis.71 China, for example, has already taken the lead in renewable technology innovation, and is critical for European technology value chains. Its patent applications for renewable technologies have skyrocketed in the last decade, while patents in other regions have declined.72 2.1 Innovation and permitting Renewable patent applications in selected economies (thousands) FIGURE 6 5 4678910Patent applications (thousands) 2000 2002 2004 2006 2008 2010 201223 1 0 2014 2016 2020 2022 2018 China USA South Korea Japan EU Note: Includes geothermal energy, hydro energy, solar energy, wind energy technology Source: World Intellectual Property Organization (WIPO). (2023). WIPO statistics database; International Renewable Energy Agency (IRENA). (2024). Renewable capacity statistics 2024. Renewable energy technologies contribute to approximately 1% of Chinese GDP (gross domestic product), compared to 0.1-0.3% in the EU, US, Japan and Korea.73,74,75,76,77,78 The EU does have the foundation and capacity necessary to improve its position in the global green tech race, however, as over one-fifth of clean technologies is still developed in the region.79 European manufacturing capacity for wind technology and hydrogen electrolysers, for example, is still notable globally (e.g. 26% of global capacity for electrolysers, 41% for offshore wind towers, 25% for offshore wind nacelles).80 According to surveyed companies, the EU holds competitive advantages in emerging technologies, such as hydrogen and carbon capture and storage (CCS), which were mentioned by 63% of the companies.81 Interviewed executives remain concerned, however, about the EU effectively leveraging public procurement to sustain that advantage and promote these domestic technologies.82 Delivering on the European Green Deal: A Private Sector Perspective 14

Delivering on the European Green Deal A Private Sector Perspective 2025