COMMISSION STAFF WORKING DOCUMENT Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions “The 2024 Annual Single Market and Competitiveness Report”
Date: 2024-02-14
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: competitiveness, digital transformation, economic growth, free movement of capital, green economy, innovation, investment, research and development, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.2.2024  SWD(2024) 78 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions “The 2024 Annual Single Market and Competitiveness Report” {COM(2024) 77 final} - {SWD(2024) 77 final}  
 
 
Table of Contents 

Annex 1: Overview of key performance indicators (KPIs) on long-term competitiveness .................... 2 

Annex 2: Key policy achievements ........................................................................................................ 20 

Single Market enforcement action plan ............................................................................................ 20 

Industrial Strategy ............................................................................................................................. 29 

SME Strategy ..................................................................................................................................... 37 

Annex 3: SME Relief Package ................................................................................................................ 41 

Annex 4: The Single Market at 30 ......................................................................................................... 46 

Annex 5: Overview of resilience measures of key international partners  .......................................... 52 

1 

 
 
 
 
 
ANNEX 1 

Overview of key performance 
indicators (KPIs) on long-term 
competitiveness 

EU’s  long-term  competitiveness  requires  a  forward-looking,  well-defined  and  coordinated  EU  framework 
that can inform the investments decisions for the future. In its communication Long-term competitiveness 
of the EU: looking beyond 20301, the Commission proposes to work along nine mutually reinforcing drivers 
to foster competitiveness and defines a set of key performance indicators (KPIs) to track progress towards 
the targets and ensure the necessary political focus and responsiveness. Accompanying these nine drivers, 
the Commission is working towards a growth enhancing regulatory framework to improve growth. 

This  annex  provides  an  overview  of  the  selected  19  KPIs2  aimed  at  monitoring  progress  in  each  of  the 
competitiveness dimensions3.  

1 COM (2023) 168 Final. 
2 The 19 selected KPIs include 2 candidate KPIs selected by the Chief Economist Network of the EU Member States: KPI 15b: 
Average test scores for 15-year-olds (PISA) and KPI 16a Exports of good and services as a share of the rest of the world’s 
imports, 
3 These KPIs, as well as additional indicators, are reported in the Single Market and Competitiveness 
Scoreboard, available at The Single Market and Competitiveness Scoreboard | Single Market and 
Competitiveness Scoreboard (europa.eu). 

2 

 
 
 
 
 
 
 
 
1.   A functioning Single Ma rket   

KPI  1: Integra tion in the Single Ma rket: trade ov er gross dom estic product ( GDP)  

The chart below shows the trend in the EU’s trade flows in goods and services within the EU and with the rest of 
the world as a share of total EU GDP between 1993 and 2022.4. 

Trade is measured by the average of imports and exports. 

For both goods and services, trade integration in the EU has more than doubled in the past three decades. In 1993, 
trade integration in goods for the 12 EU countries in the Single Market at the time stood at 11.4% of the EU’s GDP. 
This gradually increased to 26.3% in 2022 for today’s 27 EU countries. During the same period, trade integration in 
services grew from 2.9% to 7.5%. 

The Single Market is the EU’s main source of trade in goods. It is about 60% higher than the EU’s trade in goods 
with  the  rest  of  the  world.  Trade  in  services  within  the  EU  remains  broadly  at  the  same  level  as  EU  trade  in 
services with the rest of the world, which is about 7.5% of GDP. 

The data on extra-EU trade are commented under KPI 16. 

Source: Eurostat. 

The following chart provides international comparisons, in particular it shows trade flows in goods and services of 
several economic blocs, within their bloc and with the rest of the world, as a share of their respective GDP.5 This 
comparison is purely indicative as it does not take into account the differences between the political set-ups of the 
economic areas identified (e.g. unlike the others, the USA is a sovereign state). 

Trade is measured by the average of imports and exports. 

Apart from the USA internal market for goods, the EU can be considered as substantially more integrated in both 
goods and services than the other economic blocs, for which the main source of trade is outside their bloc. 

4 The vertical lines highlight breaks in the time series due to changes in the number of countries in the Single 
Market. 
5 It is calculated using 2022 goods data from the Comtrade database and 2021 services data from the WTO. 
Due to lack of data, 2021 goods data is used for Laos and Vietnam. There is also no data for internal USA 
trade in services.  

3 

 
 
 
 
 
 
 
 
Source:  Eurostat,  World  Bank  World  Development  Indicators,  UN  COMTRADE,  U.S.  Freight  Analysis  Network,  WTO  Balanced 
International Trade in Services. 

KPI  2: Con formity defi cit (incorrectly transposed directiv es)  

The conformity deficit measures the number of transposed Single Market directives for which the Commission has 
launched infringement proceedings for incorrect transposition. It is expressed as a percentage of the number of 
Single Market directives notified to the Commission as “‘transposed”’ or “‘not requiring any further implementation 
measures’.  Only  the  Court  of  Justice  of  the  European  Union  can  rule  definitively  that  a  directive  has  not  been 
transposed correctly, and the Commission is still working on the conformity assessment of a number of notified 
national measures. This should be kept in mind when interpreting the conformity deficit statistics. 

Conformity deficit of Member States, by Member States as of 5 December 2023: the average conformity deficit 
slightly decreased for the first time in 4 years (1.2% down from 1.3% last year). 

Source: European Commission. 

4 

 
 
 
 
 
 
 
 
 
 
 
2.   Access to priva te ca pital a nd investment   

KPI  3: Priva te inv estm ent as a share of GDP  

This  chart  shows  the  trend  in  private  investment  (gross  fixed  capital  formation)  as  a  share  of 
annual GDP for the EU, the UK and the USA. The 2023, 2024 and 2025 values are forecasts. 

The data refer to the increase of the capital stock belonging to enterprises and individuals, including 
equipment, land, houses and other buildings, and intangibles like R&D. It measures how the private 
sector improves its capacity to produce goods, deliver services and increase income in the future. 

Private investment in the EU has recovered from its fall during the COVID-19 pandemic. As a share 
of  GDP,  it  is  currently  higher  than  the  UK  and  the  USA’s.  Forecasts  indicate  further  increases  in 
2023,  2024  and  2025,  supported  by  NextGenerationEU,  meaning  that  the  EU  economy  should 
develop  faster.  However,  a  challenge  to  both  public  and  private  investment  is  the  tightening  of 
monetary policy due to higher inflation rates in 2023. 

Source: AMECO. 

National data on private investment, share of GDP (2022) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

21.2 14.8 22.1 18.6 19.5 22.4 19.6 10.1 17.3 21.5 15.9 19.3 17.8 17.8 18.2 13.3 22.8 21.9 17.7 21.9 12.7 17.7 20.6 16.2 17.1 20.1 22.3 

KPI  4: Venture capita l investm ents as a share of GD P  

Venture  capital  is  a  form  of  equity  financing  particularly  relevant  for  young  companies  with 
innovation  and  growth  potential  but  untested  business  models  and  no  track  record;  it  replaces 
and/or complements traditional bank finance. 

The chart measures venture capital investments in a country as a percentage of the country’s GDP 
in 2019 and 2022. 

5 

 
 
 
 
 
 
 
 
 
Countries with the highest values are more effective in attracting venture capital investments. 

The venture capital investments to GDP indicator fell in 2022 compared to the previous year. All EU 
countries saw a decrease, except Portugal and Croatia. Estonia is still the country with the highest 
value in 2022, followed by Luxembourg, Sweden, France, Finland. 

The decrease in this indicator was due, in particular, to a reduction in venture capital investments in 
the EU, compared to the previous year, caused by the change in economic outlook (i.e interest rate, 
inflation).  This  decrease  was  mainly  the  result  of  the  lower  volume  of  later-stage  venture 
investments (despite an increase in the number of companies that received a later-stage venture 
investment). 

In  comparison  to  the  EU  average,  the  corresponding  figures  for  USA  and  China  respectively  are 
about  9  and  7  times  higher,  while  UK  is  slightly  above  and  Japan  somewhat  below.  An  overall 
downward trend was also observed in China, US, Japan, UK. 

Source: Invest Europe, EUROSTAT, OECD, Statista. 

3.   Public investment a nd infra structure  

KPI  5: Public inv estm ent as share of GD P  

This chart shows the trend in public investment (gross fixed capital formation) as a share of annual 
GDP for the EU, the UK and the USA. The 2023, 2024 and 2025 values are forecasts. 

Public investment is a measure of how much money a country spends to increase the value of fixed 
assets  (for  example,  road  infrastructure,  buildings,  equipment  and  intangibles).  This  investment  is 
necessary  for  providing  various  public  services,  such  as  public  administration,  schools,  hospitals, 
police  and  the  army.  A  higher  level  of  public  investment  leads  to  more  capacity  to  deliver  public 
services, resulting in, for example, improved roads, better healthcare and increased public safety. 

The  share  of  public  investment  in  GDP  increased  during  2020,  the  first  year  of  the  COVID-19 
pandemic. This increase was the result of more investment in public health and a fall in GDP. In the 
EU, public investment is supported by the NextGenerationEU initiative. However, a challenge to both 

6 

 
 
 
 
 
 
 
public and private investment is the tightening of monetary policy due to higher inflation rates in 
2023, which could lead to more restrictive financing conditions. 

Source: European Commission, annual macro-economic (AMECO) database. 

National data on public investment, share of GDP (2022) 

BE  BG  CZ  DK  DE  EE 

IE 

EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK 

FI  SE 

2.73 2.30 4.66 3.10 2.60 5.14 2.00 3.56 2.77 3.73 3.77 2.68 2.57 3.90 3.17 4.24 5.39 3.37 3.16 3.39 4.09 2.38 4.33 5.40 3.01 4.13 4.80 

4.   Resea rch a nd Innova tion  

KPI  6: R&D expen diture as a percen tage of GDP  

The following chart shows the development of annual R&D expenditure as a percentage of GDP for 
the EU, China, Japan, the UK and the USA. 

EU R&D intensity grew from 2.12% to 2.27% of GDP between 2015 and 2021. However, it remains 
below that of the USA (3.46% in 2021), Japan (3.34% in 2021) and China (2.40% in 2020). With a 
gap  of  0.73  percentage  points,  the  EU  remains  some  distance  from  its  ambition  to  raise  R&D 
intensity to 3% by 2030. 

7 

 
 
 
 
 
 
 
 
 
Source: Eurostat, OECD Main Science and Technology Indicators. 

National R&D intensity, share of GDP (2021) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

3.43 0.77 2.00 2.76 3.13 1.75 1.11 1.46 1.43 2.22 1.24 1.45 0.83 0.74 1.11 1.04 1.64 0.65 2.27 3.26 1.43 1.68 0.47 2.13 0.92 2.99 3.40 

KPI  7: Num ber of pa tent applicati ons per mi llion inhabi tants  

The chart shows: (a) the number of patent applications to the European Patent Office (EPO) by EU 
applicants per million population, and (b) the number of patents filed under the Patent Cooperation 
Treaty (PCT) per million population by applicants’ country of residence.  

A  patent  application  to  the  EPO  can  provide  protection  in  up  to  44  countries,  including  all  EU 
countries, whereas a PCT patent application can provide protection in the 157 contracting states to 
the PCT. The number of EPO patent applications and PCT patent applications should not be directly 
compared because each system provides differing geographical scopes of protection. 

Patent applications to the EPO by EU applicants grew on average by 1% every year between 2015 
and 2022, reaching 151 per million inhabitants in 2022.  

The number of PCT patent applications filed by EU applicants remained stable between 2015 and 
2020,  slightly  decreasing  between  2020  and  2021  to  around  100  per  million  inhabitants.  This 
figure is significantly lower than the number of PCT patent applications filed by applicants residing 
in  Japan  (358.87 per million  inhabitants  in  2021)  and  the USA  (168.99)  but higher than  in China 
(39.03) and the UK (86.20). 

8 

 
 
 
 
 
 
 
Source: Eurostat (EPO patents), OECD (PCT patents), World bank (population). 

National data on the number of patents applications rounded to the unit - EPO (2022)  

BE  BG CZ  DK  DE  EE  IE  EL  ES  FR  HR  IT  CY LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

224  7  21 453 297 50 225 18 41 161  8  82 46 12 28 531 11 138 387 266 16 30  2  58  9  386  482 

National data on the number of patents applications rounded to the unit - PCT (2021) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR  IT  CY  LV  LT  LU  HU MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

115  6  24  255  198  29  176  8  30  106  6  58 42 16 13  451  10  85  222  169  9  19  1  41  7  327  349 

5.   Energy 

KPI  8: Share of en ergy  from renewa ble sourc es  

This  indicator  measures  the  share  of  energy  from  renewable  sources  in  gross  final  energy 
consumption.  The  revised  Directive  (EU)  2018/2001  on  the  promotion  of  the  use  of  energy  from 
renewable  sources  (Renewable  Energy  Directive)  sets  a  binding  European  Union  wide  target  of 
42.5% in 2030, with an indicative top-up of 2.5%.6. 

Renewable  energy  deployment  has  been  steadily  increasing  in  recent  years  and  the  EU  has 
historically surpassed other major economies in this field. In 2020 energy from renewable sources 
represented 22% in gross final energy consumption as compared to shares approximately between 
9 and 14% of UK, USA, Japan and China. In 2022, the EU share was 23%. Nonetheless, an increase 
of current shares is required in less than a decade to timely achieve the 2030 target (42.5%). 

6 Values for the EU are taken from Eurostat and those for the UK, USA, China and Japan have been provided 
by JRC. 

9 

 
 
 
 
 
 
 
 
 
Source: Eurostat, JRC. The UK figure is based on data from Great Britain; thus, it excludes Northern Ireland. 

National data on share of energy from renewable sources (2022) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

13.8 19.1 18.2 41.6 20.8 38.5 13.1 22.7 22.1 20.3 29.4 19.0 19.4 43.3 29.6 14.4 15.2 13.4 15.0 33.8 16.9 34.7 24.1 22.9 17.5 47.9 66.0 

KPI  9: E lectricity  pric es for n on -household consumers  

The chart shows non-household retail electricity prices in the EU, UK, USA and Japan. This indicator 
gives  an  idea  of  energy  costs  and  cost-competitiveness,  especially  for  those  industries  where 
electricity prices make up a significant proportion of total energy costs. 

Non-household  retail  electricity  prices  in  the  EU  are  calculated  using  Eurostat  data,  broken  down 
into two consumption bands. The data are from the first half of 2015 and are measured in euro per 
KWh, excluding VAT and other recoverable taxes. 

The  IC  consumption  band  refers  to  medium-sized  consumers  with  an  annual  consumption  of 
between 500 MWh and 2  000 MWh, i.e the vast majority of small sized enterprises in services and 
manufacturing sectors, and gives an insight into affordability. 

The ID consumption band refers to large-sized consumers with an annual consumption of between 
2  000 MWh and 20 000 MWh, such as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness. Only this band is used for international comparisons. 

Since 2021, average prices in the EU, the UK and Japan have been on a similar clear upward trend. 
The latest values are EUR  0.16 per KWh for Japan (in the first half of 2022), EUR  0.21 per KWh for 
the EU and EUR  0.28 per KWh for the UK (both in the first half of 2023). However, prices in the USA 
(EUR   0.07  per  KWh)  have  remained  significantly  lower  than  in  the  EU,  like  in  most  other  G20 
countries, particularly those with emerging industrial economies. 

10 

 
 
 
 
 
 
 
 
Source:  Eurostat  ‘Electricity  prices  for  non-household  consumers  -  bi-annual  data  (from  2007  onwards)’  [NRG_PC_205]. 
International prices are reported for the USA, UK and Japan, using data from the US Energy Information Administration (EIA), 
the UK Department for Energy Security and Net Zero (DESNZ) and the International Energy Agency (IEA). 

National data on electricity prices for non-household consumers - IC band (2023 S1) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

0.23 0.15 0.20 0.13 0.22 0.16 0.28 0.21 0.12 0.25 0.29 0.24 0.28 0.15 0.17 0.25 0.30 0.13 0.24 0.26 0.21 0.10 0.33 0.22 0.27 0.10 0.11 

National data on electricity prices for non-household consumers - ID band (2023 S1) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

0.22 0.14 0.18 0.14 0.21 0.15 0.24 0.22 0.11 0.22 0.23 0.24 0.27 0.13 0.15 0.23 0.27 0.12 0.25 0.23 0.21 0.09 0.25 0.22 0.25 0.09 0.10 

6.   Circularity 

KPI  10: Circ ula r ma terial us e rate  

This  indicator  measures  the  degree  of  the  economy’s  circularity  by  looking  at  the  rate  of  use  of 
secondary materials. Secondary raw materials, replacing primary materials in the economy, reduce 
pressures on resources and limit waste. A higher rate indicates a higher degree of circularity7. 

Secondary raw materials accounted for only 11.5% of all materials used in the EU economy, slightly 
increasing between 2019 and 2022. This suggests that the linear model (no reuse of material) still 
prevails, and the EU is far from reaching the aspirational target of 23.4% that requires doubling its 
circular material use rate by 2030. 

7 On the right axis, the chart also shows the percentage change since 2019. 

11 

 
 
 
 
 
 
 
 
 
 
Source: Eurostat. 

7.   Digita lisa tion 

KPI  11: Di gita l intensity in SMEs  

The indicator measures the share of SMEs with at least a basic level of digital intensity. 

The digital intensity score is based on counting how many out of 12 selected technologies are used 
by  enterprises.  A  basic  level  requires  usage  of  at  least  4  technologies.  The  set  of  technologies 
considered  by  the  indicator  can  vary  between  different  survey  years,  depending  on  the  questions 
included in the survey (see DII v1 v2 v3 v4 2015-2023.xlsx (europa.eu)). 

In 2022 the share of the SMEs with at least basic level of digital intensity in Member States ranged 
between 89.5% and 41.2%, with an EU average of 69.1%. Around 60% of the EU countries show a 
value below the EU average. The value of the indicator is still far from the 2030 EU target of 90%, 
established by the Digital Decade Policy Programme. 

Source: Eurostat: see also: https://digital-strategy.ec.europa.eu/en/library/2023-report-state-digital-decade  

12 

 
 
 
 
 
 
 
 
KPI  12: Di gita l technologi es adoption by  com panies  

This indicator measures the degree of companies’ adoption of digital technologies: big data, cloud 
and artificial intelligence (AI). 

The big data series is the percentage of businesses analysing big data from any data source. The 
cloud series measures the percentage of businesses purchasing at least one of the following cloud 
computing  services:  hosting  a  database,  accounting  software  applications,  customer  relationship 
management  software,  computing  power.  The  AI  series  measures  the  percentage  of  businesses, 
employing 10 or more people, using at least one AI technology. The indicator is calculated for all 
businesses in manufacturing and service sectors, excluding the financial sector. 

The share of EU businesses that have adopted digital technologies was 14% for big data (2020), 
34% (2021) for cloud and 8% for AI (2021). 

The  Digital  Decade policy  programme  set  a  common  target  for  these three  technologies:  at least 
75% of EU businesses are expected to take up one or more of them by 2030. The chart shows that 
just three of the 27 EU countries are close to the target, whereas most countries score very low for 
all three technologies. 

Source: Eurostat. 

8.   Educa tion a nd Skills  

KPI  13: Adult participa tion in education an d  training ev ery  y ear (av erage of ma le 
and fema le)  

This  indicator  measures  the  share  of  adults  (25-64  years)  that  have  taken  part  in  an  organised 
learning  activity  in  the  12  months  before  the  survey.  These  learning  activities  can  encompass 
formal education and training in institutions or activities in non-formal settings such as in-company 
training and training purchased on the market or provided by local authorities or other bodies. 

13 

 
 
 
 
 
 
 
 
The  EU  leaders  welcomed  in  2021  the  target,  proposed  in  the  European  Pillar  of  Social  Rights8 
Action Plan, of 60% of adults participating in learning by 2030, with each Member State setting a 
national target. 

The  EU  Labour  Force  Survey  (LFS)  and  the  EU  Adult  Education  Survey  (AES),  both  coordinated  by 
Eurostat  ask  adults  about  participation  in  learning,  with  slightly  different  definitions.  The  LFS  is 
carried out every 2 years (as of 2022), the AES every 6 years (latest 2016). The chart is based on a 
special extraction from the 2016 AES. 

The chart shows a large difference in the rate across countries, with 5 countries above 50% and 3 
around 10% or less. The EU average is at 37.4%, meaning that about one adult in three participates 
in learning over one year. This falls short of meeting the need to keep the EU workforce sufficiently 
skilled to harness the digital and the green transitions, which are changing the labour market and 
the skill sets required. 

Source: Eurostat, 2016 EU Adult Education Survey. 

KPI  14: Adult em ploym ent rate  

This indicator shows the EU trend in the employment rate of people aged 20 to 64 and compares 
the EU rate with other countries. 

The employment rate9 measures the use of available labour resources and is affected by changes 
in the activity10 and unemployment11 rates. This indicator is sensitive to economic cycles and is also 
affected  by  policies,  such  as  active  labour  market  policies  or  income  support,  and  inequalities  of 
opportunities  for  disadvantaged  groups.  For  individuals,  employment  is  a  source  of  income  and 
promotes inclusion in society. 

In  2022,  the  EU  employment  rate  was  74.6%.  The  European  Pillar  of  Social  Rights  sets  three 
headline targets. One of them is that at least 78% of the population aged 20 to 64 should be in 

8 The European Pillar of Social Rights in 20 principles - Employment, Social Affairs & Inclusion - European Commission 
(europa.eu) 
9 Glossary: Employment rate - Statistics Explained (europa.eu) 
10 Glossary: Activity rate - Statistics Explained (europa.eu) 
11 Glossary: Unemployment - Statistics Explained (europa.eu) 

14 

 
 
 
 
 
 
 
employment by 2030. The chart shows progress to this target despite a fall in employment during 
the COVID-19 crisis. 

Employment rates in the EU and the USA follow a broad similar pattern, and rates in the UK and 
Japan remained higher between 2015 and 2022. (For international comparison purposes, the chart 
uses OECD data for non-EU countries. The definition of employed people might differ slightly and 
lead to slight differences in levels – see source below). 

Source: EU: Eurostat, Labour Force Survey (Statistics | Eurostat (europa.eu) ; Japan, UK, US: OECD, Labour Force Survey. 

National data on adult employment rate (2022) 

BE  BG  CZ  DK  DE  EE 

IE 

EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK 

FI  SE 

71.9 75.7 81.3 80.1 80.7 81.9 78.2 66.3 69.5 74.0 69.7 64.8 77.9 77.0 79.0 74.8 80.2 81.1 82.9 77.3 76.7 77.5 68.5 77.9 76.7 78.4 82.2 

KPI  15: ICT specialists  (average of female a nd  ma le, % of em ploy ment)  

This  indicator  measures  the  share  of  employed  ICT  specialists  out  of  total  employment.  The 
definition  of  ICT  specialists  is  based  on  the  International  Standard  Classification  of  Occupations 
(ISCO-08)  and includes ICT service managers, ICT professionals, ICT technicians, ICT installers and 
servicers. 

In 2022, the percentage of ICT specialists employed in EU countries was between 2.5% and 8.6%, 
with an EU average of 4.60%. Around 56% of EU countries are below the EU average. The indicator 
shows a positive trend with constant growth in recent years. However, the target for ICT specialists 
to make up 10% of total employment (20 million ICT specialists in absolute terms) seems unlikely 
to be met on current trends. 

15 

 
 
 
 
 
 
 
Source: Eurostat. 

National data on ICT specialists (2022) 

BE  BG  CZ  DK  DE  EE 

IE  EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK  FI  SE 

5.6  3.8  4.5  5.7  5.0  6.6  6.2  2.5  4.3  4.3  3.7  3.9  4.6  4.4  4.4  7.7  4.1  4.8  7.2  5.0  3.6  4.5  2.8  4.5  4.3  7.6  8.6 

Candidate KPI 15a :  Av erage test scores for 15 -y ear -olds (PIS A)  

This  chart  shows  the  PISA  scores  of  15-year-olds  in  mathematics,  reading  and  science  in  2022, 
2018 and 2015. 

EU data are the average scores of the 27 Member States, weighted by the number of 15-year-olds 
enrolled in education. In 2022, Luxembourg did not participate so is not included in the EU average. 
Chinese  data  come  from  the  following  four  Chinese  provinces/municipalities  that  participated  in 
PISA  2018:  Beijing,  Shanghai,  Jiangsu,  and  Zhejiang.  In  2022,  China  was  unable  to  collect  data 
because schools were closed during the intended collection period. In PISA 2015, Chinese data came 
from Beijing, Shanghai, Jiangsu, and Guangdong. 

Overall,  EU  students  underperform  compared  to  their  peers  in  the  UK,  the  USA,  Japan  and  China. 
Compared to 2018, EU students performed worse in 2022 in all three disciplines. 

16 

 
 
 
 
 
 
Source: OECD PISA database. 

9.   Tra de a nd open stra tegic a utonomy  

KPI 16: T ra de wi th th e rest of th e world (as share of GD P)  

The chart below shows the role played by trade in goods and services between EU Member States 
and the rest of the world, as a share of total EU GDP, between 1993 and 2022. Trade is measured 
by the average of imports and exports. 

In  both  goods  and  services,  EU  trade  with the  rest of  the  world  has  overall increased  in the  past 
three  decades.  While  in  1993  trade  in  goods  for  the  12  Member  States  composing  the  Single 
Market at the time stood at 8.4% of the bloc’s GDP, it has gradually increased to 17.6% in 2022 for 
today’s EU-27. During the same period, trade in services went from 2.8% to 7.7%. 

The share of extra-EU trade in goods over GDP amounts to approximately two thirds of trade within 
the Single Market  and has been growing particularly since 2020. As for trade in services  with the 
rest  of  the  world,  it  remains  broadly  at  the  same  level  as  EU  trade  in  services  within  the  Single 
Market. 

17 

 
 
 
 
 
 
 
Source: Eurostat. 

National data on extra-EU trade in goods, share of GDP (2022) 

BE  BG 

CZ  DK  DE 

EE 

IE 

EL 

ES 

FR  HR 

IT 

CY 

LV 

LT  LU  HU  MT  NL  AT 

PL 

PT 

RO 

SI 

SK 

FI 

SE 

25.8  23.8  18.6  15.0  18.1  12.8  30.2  19.0  14.4  12.6  12.3  15.1  12.6  14.5  23.8  7.1  21.1  18.2  28.9  14.6  15.3  10.5  10.0  18.1  25.3  14.9  14.3 

National data on extra-EU trade in services, share of GDP (2022) 

BE  BG  CZ  DK  DE  EE 

IE 

EL  ES  FR  HR 

IT  CY  LV  LT  LU  HU  MT  NL  AT  PL  PT  RO  SI  SK 

FI 

SE 

9.0  4.9  4.2  18.0  5.7  8.8  52.1 11.6  4.4  5.7  5.3  2.6  40.8  5.3  6.0  67.1  5.0  49.1  9.3  4.0  4.1  6.4  3.1  4.1  3.0  5.6  8.2 

Candidate KPI 16a : E xports of goods and services as a share of th e rest of th e 
world’s  imports  

The chart shows the exports of goods and services of the EU, the UK, the USA, Japan, and China as 
shares  of  the  rest  of  the  world’s  imports  from  2015  to  2022.  This  helps  evaluate  the  relative 
importance  of  exports  from  the  EU  and  those  four  countries  in  the  global  market.  A  higher 
percentage  indicates  a  more  significant  role  in  the  global  economy,  and  a  lower  percentage 
suggests a smaller presence. 

The indicator is calculated using goods data from the Comtrade database and services data from 
the Word Bank’s World Development Indicators. Trade within the EU is not considered in the rest of 
the world’s imports or in the EU’s exports. The amount of trade in services within the EU and from 
the EU are estimated using ratios calculated with Eurostat data. 

In  2022,  EU  exports  in  goods  and  services  accounted  for  16.2%  and  33.1%  of  the  rest  of  the 
world’s imports, respectively. Among the countries featured in the chart, only China’s goods exports 
captured a larger share of its respective applicable market than the EU’s. 

18 

 
 
 
 
 
 
 
 
Source: Eurostat. 

10. 

Regula tory burden  

KPI  17: Eas e of regula tory  compliance (Burden of gov ernmen t regulati on)  

The indicator is measured by tracking replies to the survey question: ‘In your country, how easy is it 
for  companies  to  comply  with  government  regulation  and  administrative  requirements  (e.g.,e.g. 
permits, reporting, legislation)? (1 = Overly complex; 7 = Extremely easy)’. Higher values indicate a 
better performance (i.e.,i.e. less burdensome regulation). 

In 2022, stakeholders’ perception of the regulatory burden in the EU was on average 3.8, up from 
3.6 in 2021. 

The  right  axis  of the chart  also  indicates  the  percentage  change since  2019. Over  the  previous  3 
years the indicator shows that there have been improvements in 22 Member States. 

No data are available for Croatia for 2022. 

Source: World Economic Forum. 

19 

 
 
 
 
 
 
 
 
 
ANNEX 2 

KEY POLICY ACHIEVEMENTS 

Single Market enforcement 
action plan 

The  Single  Market  is  one  of  Europe’s  greatest  achievements  for  businesses  and  individuals. 
Nevertheless, Europeans continue to experience barriers that prevent them from fully exploiting the 
potential of the Single Market. To address these barriers, The Commission adopted in March 2020 
an action plan for better implementation and enforcement of Single Market rules12, which aims at 
addressing the barriers that arise from violations of EU law. The action plan is based on a renewed 
partnership  between  Member  States  and  the  Commission  in  their  shared  responsibility  to  ensure 
that Single Market rules are properly enforced and applied. 

This annex presents some of the key achievements of the action plan13. 

12 COM(2020) 94 final. 
13 Since 2021, the Commission has been publishing an update of the implementation of the actions set up in 
the Single Market enforcement action plan as part of the Annual Single Market Report. 

20 

 
 
 
 
 
 
 
 
 
The Single Mar ket Enf orc em ent  Ta skforc e (S MET)  

In order to strengthen implementation and enforcement of Single Market rules on the ground, the 
Single Market Enforcement Taskforce (SMET)14 was set up in April 2020. 

The SMET is an innovative forum, where Member States and the Commission work together in a real 
partnership to overcome specific, Single Market barriers. It does not replace other enforcement tools 
but complements them by bringing the added value of cooperation and networking. SMET projects 
are chosen by consensus after a discussion on priorities identified in reports, workshops and other 
exchanges of experiences of Single Market barriers provided by stakeholders. 

Examples  of  achievements  by  the  SMET  are  already  available  in  several  Single  Market  areas15. 
Member  States  reviewed  more  than  800  prior  checks  for  the  recognition  of  professional 
qualifications and committed to removing 301 of those considered to be as being disproportionate. 
Furthermore, they agreed to implement measures to for addressing 90 country-specific barriers to 
permitting for renewable energy projects, with two thirds of the measures to be completed by the 
end  of  2023.  Member  States  are  also  advancing  well  with  the  implementation  of  selected  good 
practices  for  improving  the  permit-granting  process  for  renewable  energy  projects  and  for 
streamlining the administrative requirements for the cross-border provision of services. Exchanges 
on the synergies between the SMET and other Single Market tools, such as SOLVIT and the Internal 
Market Information System, contribute to improving these tools efficiency. In addition, in September 
2023, the SMET launched a new project aiming to address the problem of IBAN discrimination, i.e. 
the non-acceptance of IBAN numbers from other EU Member States for payments in euro16. 

The  SMET  regularly  informs  the  Competitiveness  Council  and  the  European  Parliament’s  Internal 
Market and Consumer Protection Committee (first report on 29 September 2021 and the second on 
28 November 2022). 

To  continue  working  effectively,  the  SMET  will  develop  further  cooperation  between  the  different 
parts of national administrations working on Single Market policies. Priority areas for its future work 
are  related  to  the  major  Single  Market  challenges  as  indicated  that  stakeholders  have  identified, 
with a special focus on the green and digital transitions. 

The Single Mar ket and  Competitiveness  Scor eboard  

The  Single  Market  and  Competitiveness  Scoreboard17  is  an  online  tool,  providing  Member 
States, the Commission and other EU policy makers with useful performance-monitoring indicators 
on the application of Single Market rules. 

In its annual update on 31 January 2023, the Commission updated the Scoreboard to better reflect 
the  situation  of  individuals  and  businesses  in  the  Single  Market  and  to  assess  the  competitive 

14 More information on the SMET is available at Single Market Enforcement Taskforce (SMET) - The EU Single 
Market - European Commission (europa.eu), including all reports published. 
15 SMET report 2022 - 2023. 
16 : https://finance.ec.europa.eu/consumer-finance-and-payments/payment-services/payment-services/iban-
discrimination_en 
17 The Single Market and Competitiveness Scoreboard | Single Market and Competitiveness Scoreboard 
(europa.eu).  

21 

 
 
 
 
 
 
strengths  and  weaknesses  of  the  EU  and  its  Member  States.  Additionally,  on  14  July  2023,  the 
Commission  published  an intermediate  update  of  the  Single  Market  Scoreboard  together  with  the 
Annual Report on Monitoring the Application of EU Law, updating the reporting of the “Enforcement 
tools”  section  of  the  Scoreboard18.  The  new  edition  of  the  Scoreboard  continues  to  support  the 
measuring of Member States’ performance in the areas of the transposition and enforcement of the 
Single  Market body of law and the related governance tools. In addition, it sheds light on the key 
areas  where  policies  by  Member  States  can  impact  the  business  framework  conditions  (e.g. 
administrative,  or  regulatory  burden,  public  procurement,  services).  Lastly,  it  assesses  the  overall 
results achieved by the Single Market as regards integration, competitiveness, and major EU policy 
goals (economic resilience, the green and digital transitions). 

Following the adoption of the communication Long-term competitiveness of the EU: looking beyond 
203019  adopted  on  16  March  2023,  the  Scoreboard  has  become  the  tool  to  report  on  the  key 
performance indicators (KPIs) selected by the Commission and by Member States experts to assess 
EU  progress  on  the  important  competitiveness  drivers20.  To  this  end,  the  Scoreboard  has  been 
renamed to the Single Market and Competitiveness Scoreboard.  

The Inter nal Mar ket  Infor mation System  (IMI)  

The Internal Market Information System (IMI)21 has been connecting authorities across borders 
and  languages  for  the  past  15  years.  It  is  an  online  application  facilitating  and  supporting  the 
administrative  cooperation  between  Member  States’  public  administrations  in  currently  19  policy 
areas  of  the  Single  Market22  through  95  administrative  procedures.  Since  2008,  the  number  of 
active  authorities  in  the  IMI  increased  from  400  to  12  500  and  the  number  of  information 
exchanges from 375 to 585 000. 

18 Annual reports on monitoring the application of EU law - European Commission (europa.eu). 
19 COM(2023) 168 final. 
20 For more information, please see Annex 1 Overview of key performance indicators (KPIs) on long-term 
competitiveness. 
21 Homepage – IMI-Net – The EU Single Market – European Commission (europa.eu).  
22 Action 13 Single Market enforcement action plan. Rationalising Single Market IT systems. 

22 

 
 
 
 
 
 
 
In  2022,  a  new  interface  linked  to  IMI  for  the  submission  of  posting  declarations  in  the  road 
transport sector and an information exchange to enforce posting rules in that sector was launched. 
Since then, road transport operators have submitted 34 million declarations. These operators who 
are making use of the simple online procedure and the harmonised uniform content of the uniform 
posting  declaration  available  in  23  languages.  They  are  also  saving  time  and  resources  and 
reducing bureaucracy. The portal linked to IMI significantly contributes to the smooth functioning of 
the road transport sector in the Single Market. 

23 

 
 
 
 
 
Declarations submitted

35.000.000

30.000.000

25.000.000

20.000.000

15.000.000

10.000.000

5.000.000

0

￼

The  integration  of  the  Regulated  Professions  Database23  into  IMI  is  being  finalised  and  will  be 
launched  in  early  2024.  This  integration  is  important  for  from  many  reasons:  (i)  it  will  result  in 
improved  data  quality;  (ii)  given  that  IMI  already  supports  many  administrative  cooperation 
procedures in the area of the recognition of professional qualifications, authorities already using IMI 
will  have  access  to  all  relevant  modules  in  one  system;  and  (iii)  In  addition,  the  integration  also 
takes into account the notification requirements introduced under the Single Market Transparency 
Directive24  and  therefore  contributes  to  improved  transparency  in  the  area  of  the  recognition  of 
professional qualifications. 

IMI currently supports 19 policy areas: 

23 Regulated Profession Database (europa.eu).  
24 EUR-Lex - 310304_1 - EN - EUR-Lex (europa.eu). 

24 

 
 
 
 
 
SOLVIT  

SOLVIT is a network of national centres25, designed to help businesses and individuals get the best 
out of the EU Single Market. Created in 2002, it provides an alternative  and informal approach to 
solving  a  dispute  without  the  need  to  consult  a  lawyer  or  go  to  court.  SOLVIT  centres,  based  in 
national  administrations,  are  tasked  with  acting  as channels  of  communication  channels  between 
and within Member State authorities. They aim to find swift and pragmatic solutions to problems 
that people and businesses encounter with public authorities and decision-makers when exercising 
their rights under Single Market rules26 

From  10  March  2020  (adoption  date  of  the  Single  Market  enforcement  action  plan)  up  to 
10 November 2023  November  23,  SOLVIT  has  dealt  with  more  than  8 800  cases  of  which  more 
than 80% were resolved for European people and businesses. 

25 SOLVIT is a service provided by the national administration in each EU country and in Iceland, Liechtenstein 
and Norway. 
26 COM (2001) 0702 final. 

25 

 
 
 
 
 
 
SOLVIT  continues  to  further  deepen  the  cooperation  with  other  European  networks  and 
organisations,  such  as  the  Enterprise  Europe  Network  and  the  European  Labour  Authority.  SOLVIT 
continues  dealing  with  the  cases  linked  to  the  principle  of  mutual  recognition  of  goods  lawfully 
marketed in another Member State and will contribute  to the evaluation of the Regulation on the 
mutual  recognition  of  goods  lawfully  marketed  in  another  Member  State27,  which  takes  place  in 
2024.  

The  SOLVIT  database  (SOLVIT  IMI  Application)  is  being  revamped.  Besides  facilitating  better  case 
handling,  another  important  feature  will  be  the  creation  of  a  repository  for  recording  systemic 
issues (structural and recurrent cases detected via SOLVIT cases). 

This will ensure an easier access to and an overview of systemic issues, allowing for more efficient 
reporting to policy makers. In addition, work is ongoing to improve the visualisation of SOLVIT data. 

In March 2023, the Commission proposed a benchmark for Member States to solve a minimum of 
90% of the cases received through SOLVIT within 12 months28. 

This  90%  resolution  rate  is  applies  to  Member  States  when  their  SOLVIT  centre  is  acting  as  lead 
centre (i.e. the centre in the country of the authority that created the problem). The ability to solve 
the  cross-border  case  received  by  SOLVIT  and  comply  with  the  90%  benchmark  depends  on 
numerous  many  factors.  These  factors  include:  (i)  cooperation  with  the  home  centre;  (ii)  the 
willingness of Member States’ authorities to cooperate with SOLVIT; (iii) the nature of the case; and 
(iv) its authority/place in the Member States’ national administrations. 

When a case cannot be solved informally through SOLVIT, it is up to the Member States to take the 
necessary measures to solve the case using through other means to solve the case. 

This new benchmark is monitored and published in the annual Single Market and Competitiveness 
Scoreboard. 

27 EUR-Lex - 32019R0515 - EN - EUR-Lex (europa.eu). 
28 The single market at 30, (COM(2023) 162). 

26 

 
 
 
 
 
 
 
Your Europe  port al 

Your  Europe29,  the  official  web  portal  of  the  Single  Digital  Gateway  (SDG)  since  2020,  supports 
SMEs’  competitiveness  by  providing  a  one-stop-  shop  for  reliable  administrative  and  regulatory 
information,  assistance  services  (e.g.  SOLVIT)  and  online  procedures  at  all  levels  of  public 
administration across the EU. 

As part of the 2023 SME Relief Package30, the first implementation report on the SDG31 outlined the 
SDG’s very promising start and what would be done to deepen its impact. About 100 million visits to 
Your Europe and its associated national websites are registered every year, and 1.2 million business 
cases have been taken on by the assistance services so far, with an over 90% satisfaction rate of 
over 90%. 

In  December  2023,  the  Commission  in  close  cooperation  with  Member  States  launched  the  core 
infrastructure  of  the  ‘Once-Only  Technical  System’ (OOTS)  making  it much  easier  for  citizens  and 
SMEs  to  request  or  submit  official  documents  required  for  an  administrative  procedure  (e.g. 
certificates  or  permits).  With  the  following  gradual  onboarding  of  80  000  national  competent 
authorities, SDG and Your Europe will keep helping businesses, notably SMEs, to cut red tape and to 
fully  benefit  from  the  Single  Market.  At  the  same  time,  Member  States  supported  by  the 
Commission  work  for  the  last  important  milestone:  to  offer  fully  online  digital  administrative 
procedures needed by citizens and businesses when they want to move or do business in another 
EU country. 

Guidanc e t ools f or nationa l aut horities a nd businesses  

In  December  2022,  the  Commission  published  practical  and  up-to-date  guidance  to  help  EU 
countries  with  the  application  of  important  pieces  of  EU  law  in  the  area  of  the  Single 
Market for services32. The guidelines respond to demands requests by Member States and also by 
stakeholders to support the application of the Services Directive33. They strengthen EU and national 
efforts  for  a  consistent  and  robust  application  of  these  central  pieces  of  legislation  and  thus 
improve the EU Single Market. 

The  updated  Handbook  on  the  implementation  of  the  Services  Directive34  provides  easily 
accessible  and  specific  guidance  on  the  day-to-day  application  of  this  important  directive.  The 
previous  Commission  Handbook  from  2007  was  widely  appreciated  as  an  efficient  tool  assisting 
Member States in the implementation of the Services Directive.  Changes in the European Court of 
Justice’s  case  law,  policy  developments,  and  new  legislation  and  market  developments  feed  into 
this new edition, making it a state-of-the-art reference tool. 

29 https://europa.eu/youreurope/index_en.htm  
30 COM(2023) 535 final. 
31 COM(2023) 534 final. 
32 Single Market for services webpage. 
33 Directive 2006/123/EC. EUR-Lex - 32006L0123 - EN - EUR-Lex (europa.eu). 
34 The Handbook was updated in 2022: Implementation (europa.eu). 

27 

 
 
 
 
 
 
 
The Guidance on the assessment of proportionality pursuant to the Proportionality Test 
Directive35  –  published  in  December  202236  –  supports  national  authorities  in  carrying  out 
proportionality assessments of new national regulations before their adoption that restrict access to 
professions or the exercise of them. This covers, for instance, rules restricting advertising, limiting 
the use of corporate structures to exercise a profession or mandatory membership in professional 
bodies.  A  thorough,  evidence-based  and  Single-Market-oriented  assessment  of  proportionality  of 
national  regulations  before  they  are  adopted  greatly  benefits  the  Single  Market  and  reduces  the 
need  to  resort  to  enforcement  action.  This  directive  is  part  of  the  increased  emphasis  put  on 
prevention.  To  reap  its  full  benefits, it is important that  the  directive  is  translated  into  strong  ex-
ante  proportionality  assessment  procedures  before  adoption  at  national  level  and  that  the 
proportionality criteria are correctly understood and applied. The guidance explains the logic of this 
new  preventative  approach  and  provides  specific  concrete  examples  of  do’s  and  don’ts  when 
evaluating proportionality. 

Furthermore, to facilitate the notification of measures related to different notification obligations in 
the  area  of  services  (Services  Directive,  Professional  Qualifications  Directive/Proportionality  Test 
Directive),  the  Commission  aligned  the  information  on  proportionality  under  the  different 
notification  systems.  Improvements  to  the  notification  form  will  guide  better  the  users  better  by 
essentially providing on-screen instructions on the information that Member States should provide 
about  the  notified  requirements.  These  changes  to  the  notification  form  should  also  significantly 
improve transparency: they will help users understand the reasons that led Member States to adopt 
such measures in the area of services and reduce the need for follow-up questions due to missing 
information or a lack of unclarity after notifications have been sent. 

35 Directive (EU) 2018/958. EUR-Lex - 4353947 - EN - EUR-Lex (europa.eu). 
36 Services Directive Handbook/Proportionality Test Directive Guidance (europa.eu).  

28 

 
 
 
 
 
INDUSTRIAL STRATEGY  

The Commission’s updated industrial strategy of May 202137 seeks to drive the transformation to a 
more  sustainable,  digital,  resilient  and  globally  competitive  economy,  while  responding  to  the 
lessons  learnt  from  the  COVID-19  crisis  to  boost  the  recovery  and  strengthen  the  EU’s  open 
strategic  autonomy.  It  proposes  measures  to  strengthen  the  resilience  of  the  Single  Market, 
especially in times of crisis38. It addresses the need to better understand our dependencies in key 
strategic areas and presents a toolbox to address them. It offers new measures to accelerate the 
green and digital transitions. It also responds to calls to identify and monitor the main indicators of 
the competitiveness of the EU economy as a whole: Single Market integration, productivity growth, 
international competitiveness, public and private investment and R&D investment. 

This annex presents some of the key achievements of the industrial strategy39. 

37 COM(2021) 350 final. 
38 See also the June 2023 joint communication on “European economicsecurity strategy”, JOIN(2023) 20 final 
39 Since 2021, the Commission has been publishing an update of the implementation of the actions set up in 
the March 2020 industrial strategy and its update in May 2021 as part of the Annual Single Market Report. 
This annex summarises some of the key achievements of the strategy. 

29 

 
 
 
 
 
 
 
 
 
STRENGTHENIN G SINGLE MAR KET R ESILIEN CE  

Single Market Emergency Instrument (SMEI) / Internal Market Emergency and 
Resilience Act (IMERA) 

The Single Market is central to functioning supply chains, for the free movement of people and the 
access to services and goods, especially in difficult times. However, the existing rules and tools for 
the Single Market are insufficiently adaptable to handle crises and emergencies effectively.  

Therefore,  the  Commission  proposed  a  Single  Market  Emergency  Instrument  (SMEI)40  on  19 
September  2022.  The  SMEI  will  ensure  greater  transparency  and  coordination  when  a  critical 
situation emerges and will help mitigate the any harmful impacts on the Single Market, safeguard 
the free movement of people, goods and services and maximise the availability of products needed 
in the a crisis response.  

The SMEI aims to establish create a comprehensive preparedness and crisis response architecture 
made up of the main features described below. 

•  A  governance  body  to  ensure  adequate  coordination  and  advise  the  Commission  on  the 
appropriate  measures  for  preventing  or  addressing  the  impact  of  the  crisis  on  the  Single 
Market. 

•  A  framework  for  contingency  planning:  this  will  ensure  arrangements  for  crisis 
protocols,  trainings and simulations, as well as an early warning system for any incidents 
that could disrupt the functioning of the Single Market. 

•  A  framework  for  Single  Market  vigilance:  this  will  be  the  framework  for  impacts  of 
incidents  whose impact  has  not  yet  led  into  a  full-blown  Single  Market  emergency.  It  will 
and include a set of vigilance measures, such as monitoring of the supply chains of goods 
and services of strategic importance.  

•  A framework for Single Market emergencies: this will include measures for re-
establishing and facilitating free movement, a list of prohibited restrictions of free 
movement rights during a Single Market emergency, measures to improve transparency and 
the possibility for the Commission to procurement of crisis-relevant goods by the 
Commission on behalf of Member States.  

A  number  of  exceptional  measures  are  included  in  the  emergency  framework  to  ensure  the 
availability and supply of crisis-relevant goods that require additional (dual) activation: requests for 
information from economic companies, calls for priority rated requests and targeted derogations of 
harmonised product legislation (contained in the accompanying omnibus proposals). 

It  is  expected  that  the  proposal  for  the  SMEI  (renamed  IMERA)  and  the  accompanying  omnibus 
proposals41  will  be  adopted  by  Parliament  and  Council  the  co-legislators  in  2024,  based  on  a 
provisional political agreement reached on 1 February 202442. 

40 COM(2022) 459 final. 
41 Proposal for a Regulation establishing a Single Market Emergency Instrument and repealing Council 
Regulation (EC) 2679/98;  
proposal for a Regulation for the laying down measures to facilitate the supply and availability of crisis-
relevant goods in the context of a Single Market emergency and amending Regulation (EU) 2016/424, 
Regulation (EU) 2016/425, Regulation (EU) 2016/426, Regulation (EU) 2019/1009; 

30 

 
 
 
 
DEALING WITH  STRATEGIC  DEP END ENCIES: O PEN  STRATEGIC  
AUTONO MY  IN  PR ACTIC E  

Monitoring the EU’s foreign strategic dependencies 

The EU becomes more resilient from being open and integrated in global value chains (i.e. through 
cost reduction, economies of scale, risk reduction, access to foreign inputs). However, supply chains 
are  subject  to  a  risk  of  disruptions,  which  are  likely  to  affect  products  and  inputs  that  are 
particularly critical for the EU’s society and economy. Events such as the COVID-19 pandemic, the 
Russian’s full-scale invasion of Ukraine and the energy crisis have exposed limits to supply chains’ 
resilience. 

Countries all over the world and the EU have started to address tackle challenges to their economic 
security,  including  the  EU.  The  recent  communication  on  a  European  economic  security  strategy43 
aims to minimise the risks associated with specific economic flows amidst heightened geopolitical 
tensions  and  rapid  technological  changes,  and  maintaining  high levels  of  economic  openness  and 
dynamism.  The  strategy  intends  to  promote  EU’s  competitiveness;  to  protect  our  economic 
security through  a  range  of  policies  and  tools, including  strengthening  our  toolbox  where  needed; 
and to build partnerships with the broadest possible range of countries globally. It identifies four 
risk categories as priorities for intra-EU risk assessment in the areas of: 

• 

• 

• 

• 

Supply chain resilience 

Critical infrastructure  

Technology security and security-relevant technology leakage  

Weaponisation of economic dependencies and economic coercion 

The  Commission  has  already  adopted  data-driven  methodologies  to  identify  EU  strategic 
dependencies  across  sensitive  industrial  ecosystems44  and  those  dependencies  subject  to  single 
point  of  failures  or  choke  points,  which  are  more  likely  to  become  vulnerable  areas  for  the  EU’s 
economic  security.  In  2021,  the  Commission  carried  out  a  first  analysis  of  Europe’s  strategic 
dependencies45,  developing  a  novel  bottom-up  assessment  of  product  dependencies46.  It  reviewed 
more than 5 000 products imported by the EU, and identified those that relied too much on foreign 
sources, were significantly scarce in the EU, and had limited potential for domestic substitution. It 

 proposal for a Directive amending Directives 2000/14/EC, 2006/42/EC, 2010/35/EU, 2013/29/EU, 
2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 
2014/53/EU and 2014/68/EU and introducing emergency procedures for the conformity assessment, adoption 
of common specifications and market surveillance in the context of a Single Market emergency. 
42 SMEI / IMERA: Council and Parliament strike a provisional deal on crisis preparedness - 

Consilium (europa.eu) 
43 JOIN(2023) 20 final. 
44 Sensitive industrial ecosystems relate to areas affecting security and safety, the health of Europeans as 
well as the ability to access goods, services and technologies that are key for the green and digital transitions 
at the core of the EU’s priorities. 
45 SWD(2021) 352 final. 
46  A  product  is  considered  as  foreign  dependent  if  it  fulfils  three  criteria:  1)  the  bulk  of  non-EU  imports 
originates in less than three foreign countries;, 2) non-EU imports are at least half of the total EU imports;, 
and 3) non-EU imports are higher than total EU exports. 
31 

 
 
 
 
 
was  accompanied  by  a  the  first  wave  of  in-depth  reviews  on  six  strategic  areas47  where  the  EU 
faces  dependencies.  The  Commission  published  a  second  wave  of  in-depth  analyses  of 
dependencies48 in five key areas49 in 2022, and updated its bottom-up methodology in 2023.  

The  latest  analysis  carried  out  by  the  Commission  identifies  204  dependent  products  in  sensitive 
industrial  ecosystems50.  About  20%  of  those  face  significant  additional  risks  due  to  global  single 
points of failure (SPOFs), which refer to vulnerable geographical points51. In other words, dependent 
products  subject  to  SPOFs  are  particularly  vulnerable  and  at  risk  of  being  weaponised  for 
geopolitical  purposes  given  their  particularly  limited  potential  for  diversification.  The  disruption  at 
these points could result in failures across entire global supply chains. 

The various assessments carried out by the Commission in the identified critical areas underpinned 
targeted  policy  actions  to  mitigate  and  reduce  identified  risks  within  the  sectors  concerned. 
Examples  include  legislative  initiatives  such  as  the  European  Chips  Act,  proposed  in  2022  by  the 
Commission,  and  the  European  Critical  Raw  Materials  Act  and  the  Net-Zero  Industry  Act,  both 
proposed in 2023.  

Legislative  initiatives  move  in  parallel  with  the  openness  agenda  of  the  EU52,  aiming  to  leverage 
international trade to:  

• 

• 
• 

increase  efficiency  of  EU  companies  by  connecting  them  to  growth  poles  and  creating 
economies of scale;  
improve the access to the inputs needed for the green transition; and, 
increase the resilience of supply chains by diversifying and securing sources of supply.  

In 2023, the Commission also published a Union List of Critical Medicines53, to foster the security of 
supply of medicines considered as critical. In addition, recently launched international partnerships 
on  sustainable  raw  materials  (for  example,  with  Canada  and  Ukraine  in  2021,  Namibia  and 
Kazakhstan  in  2022,  and  Argentina  and  Chile,  Democratic  Republic  of  Congo,  Zambia,  Greenland 
and Rwanda in 2023) and ongoing industrial alliances will help make supply chains more diversified 
and  resilient,  both  for  the  EU  and  its  partners.  These  measures  underscore  the  Commission’s 
commitment  to  proactively  curb  foreign  harmful  foreign  dependencies  and  boost  resilience  in 
strategic areas. 

47 Raw materials, batteries, active pharmaceutical ingredients, clean hydrogen, semiconductors and cloud and 
edge technologies. 
48 SWD(2022) 41 final. 
49 Rare earths and magnesium, chemicals, solar panels, cybersecurity and IT software. 
50 The underpinning methodology was updated in 2023 to reflect the latest data developments: An enhanced 
methodology  to  monitor  the  EU’s  strategic  dependencies  and  vulnerabilities  (europa.eu).  Among  the  204 
products, 64 come from China, 38 from US and 15 from Russia. In import values, China is a main source of 
strategic dependencies. Examples of dependent products include cell phones and laptops (China), turbines and 
certain vehicle types (US), and iron, steel and coal (Russia).  
51 SPOFs occur when: 1) world production is concentrated in a single country;, and 2) that country’s production 
is central to many other countries in an international trade network.  
52  Trade  agreements  also  contribute  to  the  EUs  openness  agenda:  for  example  the  recently  signed  trade 
agreements  with  New  Zealand,  Chile,  and  Kenya,  together  with  the  EU  commitment  to  push  forward  with 
negotiations  with  Australia,  India,  Indonesia  and  Thailand  and  to  finalise  agreements  with  Mercosur  and 
Mexico.  
53 Availability of critical medicines | European Medicines Agency (europa.eu) 

32 

 
 
 
 
 
 
European Chips Act 

The  European  Chips  Act54  entered  into  force  on  21  September  2023.  It  strengthens  the 
semiconductor ecosystem and strengthens manufacturing activities in the EU, ensures the resilience 
of supply chains and supports scale-up and innovation across the whole value chain, and reduces 
external dependencies. It is built on three pillars that summarise the strategy: (1) Chips for Europe 
initiative; (2) security of supply and (3) monitoring and crisis response. 

Pillar 1, the Chips for Europe  initiative, aims to support large-scale technological capacity building 
and  innovation  in  the  EU.  The  initiative  supports  the  development  of  pilot  lines  to  prototype  and 
scale up innovation, to bridge from the lab to the fab. The first call under the  initiative, setting up 
four pilot lines, was published by the Chips Joint Undertaking in December 2023. As of 2024, the 
initiative will also support design capacity and a network of competence centres across the EU.  

Pillar 2 focuses on the security of supply of semiconductors in the EU. The approach aims to attract 
investments and improve production capacity in semiconductor manufacturing as well as advanced 
packaging,  test  and  assembly.  Since  the  publication  of  the  Chips  Act  proposal  in  February  2022, 
investments of over EUR 100 billion in investment in manufacturing capacity have been announced, 
including for advanced cutting-edge manufacturing facilities. The second microelectronics Important 
Project of Common European Interest was approved in 2023. With a budget of EUR 21 billion  (of 
which EUR 8.1  billion is public funding), it supports innovative, state-of-the-art industrial projects by 
56 companies in 68 projects across 14 Member States. 

Pillar 3, monitoring and crisis response, enables the EU to anticipate future chips crises and tackle 
them  by  closely coordinating  with  Member  States, through  the  European  Semiconductor  Board,.  It 
also  and  equips  the  EU  with  the  instruments  and  measures  needed  to  ensure  supply  to  critical 
sectors in case of severe shortages. Supply chains and critical bodies in Member States have been 
identified.  The  Semiconductor  Alert  System  was  set  up  to  allow  stakeholders  to  flag  critical 
disruptions along semiconductors supply chains. 

Furthermore, international collaboration on semiconductor policies takes place is established via the 
trade  and  technology  councils  with  the  USA  and  India,  and  via  digital  partnerships  with  Japan, 
Korea,  Singapore,  and  Canada.  Cooperation  is  focused  on  monitoring  supply  chains,  subsidy 
transparency, skills, and research collaboration in research. 

European Critical Raw Materials Act (CRMA) 

In March 2023, the Commission proposed the European Critical Raw Materials Act (CRMA)55, a 
comprehensive set of measures to ensure the EU’s access to a secure, diversified, affordable and 
sustainable supply of critical  raw materials. In November 2023, the European Parliament and the 
Council reached a political agreement on the Act. 

Critical raw materials are essential for many strategic sectors, including the net-zero industry, the 
digital industry, and the aerospace and defence sectors. The EU is heavily dependent on critical raw 
materials from a number of non-EU countries. This dependency, combined with the growing global 
demand due to the shift towards a digital and green economy makes supply chains vulnerable. 

54 European Chips Act | Shaping Europe’s digital future (europa.eu). 
55 This initiative comprises a regulation and a communication. The regulation sets a regulatory framework to 
support the development of domestic capacity and strengthen the sustainability and circularity of the critical 
raw material supply chains in the EU. The communication proposes measures to support the diversification of 
supply chains through new international mutually supportive partnerships. 

33 

 
 
 
 
The  European  Critical  Raw  Materials  Act56  will  strengthen  the  EU’s  critical  raw  materials  capacity 
along  all  stages  of  the  value  chain.  It  aims to:  (i) increase  our  resilience; (ii)  diversifying the  EU’s 
imports  and  reduce  strategic  dependencies;  (iii)  increase  preparedness  and  improve  the  EU’s 
capacity to monitor and mitigate risks of disruptions to the supply of critical raw materials; and (iv) 
promote  supply  chain  sustainability  and  circularity.  Circular  economy  solutions  are  crucial  to 
promote  recovery  and  recycling  of  materials,  use  of  secondary  raw  materials,  decrease  the 
dependence on imported raw materials, and strengthen the resilience and strategic autonomy. 

Net-Zero Industry Act  

In March 2023, the Commission also proposed the Net-Zero Industry Act57, to help strengthen the 
European manufacturing capacity of net-zero technologies and overcome barriers to scaling up this 
capacity.  A provisional  political  agreement has been reached by the European Parliament and the 
Council on 6 February 2024. 

The  measures  in  the  Act  will  increase  the  competitiveness  of  the  net-zero  technology  industrial 
base  and  improve  the  EU’s  energy  resilience.  By  accelerating  the  development  and  production  of 
net-zero technologies, the Act also aims to reduce the risk of replacing EU reliance on Russian fossil 
fuels  with  other  strategic  dependencies  that  might  hinder  our  access  to  key  technologies  and 
components for the green transition. 

Together  with  the  proposal  for  a  European  Critical  Raw  Materials  Act  and  the  reform  of  the 
electricity  market  design58,  the  Net-Zero  Industry  Act  sets  out  a  clear  European  regulatory 
framework  to  reduce the  EU’s  reliance  on  highly  concentrated imports.  The  proposals  also  aim  to 
create a predictable and simplified regulatory environment for net-zero industries, as announced in 
the Green Deal industrial plan59. By drawing on the lessons learnt from the COVID-19 pandemic and 
the energy crisis sparked by Russia’s full-scale invasion of Ukraine, it will help make Europe’s clean 
energy supply chains more resilient. 

European industrial alliances 

Industrial  alliances  play  a  significant  role  in  achieving  key  EU  policy  objectives,  by  revealing 
opportunities and bottlenecks and setting up joint action to address them. They serve as a platform 
to attract private investors, build up pipeline projects and discuss new business partnerships in an 
open  and  transparent  way.  They  bring  together  a  wide  range  of  stakeholders  from  entire  value 
chains (including the public, and private sectors and civil society), to help contribute to the delivery 
of  EU  policy  objectives.  Alliances  are  significant  delivery  vehicles  for  different  Commission 
strategies  (e.g.  the  hydrogen  strategy,  the  Net-Zero  Industry  Act  and  the  European  Critical  Raw 
Materials Act). 

The following alliances have been launched since 2017 and are operational to date60: the European 
Battery  Alliance,  the  Circular  Plastic  Alliance,  the  European  Raw  Materials  Alliance,  the  European 
Clean Hydrogen Alliance, the Alliance for Industrial Data, Edge and Cloud, the Renewable and Low- 

56 Critical Raw Materials Act (europa.eu). 
57 Net Zero Industry Act (europa.eu). 
58 Reform of the EU electricity market design (europa.eu). 
59 The Green Deal Industrial Plan (europa.eu). 
60 https://single-market-economy.ec.europa.eu/industry/strategy/industrial-alliances_en 

34 

 
 
 
 
 
Carbon  Fuels  Value  Chain  Industrial  Alliance,  the  Alliance  for  Zero-Emission  Aviation,  and  the 
European Solar Photovoltaic Industry Alliance61. 

The European Battery Alliance (EBA) has also played a central enabling role in delivering on the 
2018  strategic  action  plan  on  batteries.  For  example,  e.g.  the  number  of  announced  lithium-ion 
gigafactories increased from 26 to 30, i.e. around 70 GWh of installed capacity by the end of 2022. 

The European Battery Alliance also directly supports SMEs as part of the European Battery Alliance 
EBA Business Investment Platform process, to accelerate their project development.  

The  Clean Hydrogen  Alliance  has  reached  a  total  of  1  755  members, including  541  SMEs.  The 
Alliance also contributes to the work of the High-Level Forum on European Standardisation (which 
was    set  up  as  a  follow-up  to  the  new  EU  standardisation  strategy);  for  example,  the  Alliance 
prepared a roadmap on hydrogen standardisation. 

A more recent alliance, the Alliance for Zero-Emission Aviation is the only organisation bringing 
together  all  the  different  stakeholders  (EU  and  non-EU)  of  the  aviation  ecosystem  (it  has  150 
members).  To  achieve  the  decarbonisation  of  aviation  technologies,  the  Alliance’s  objectives  span 
over  more  than  15  years,  starting  with  drawing  up  a  roadmap  for  the  entry  into  operation  of 
electric- and hydrogenpowered aircrafts.  

A C C E L E R A T I N G   T H E   T W I N   T R A N S I T I O N S  

Transition pathways 

The updated European industrial strategy62 announced the creation of transition pathways for the 
most  relevant  industrial  ecosystems.  This  is  as  a  co-creation  between  the  Commission,  Member 
States,  industry  and  other  stakeholders  to  identify  the  actions  needed  to  achieve  the  twin 
transitions, giving a better understanding of the scale, benefits and conditions required. They form 
an ‘actionable plan in favour of sustainable competitiveness’. They address key  elements such as 
infrastructure; investments and funding; regulation and public governance; research and innovation, 
techniques  and 
the  social  dimension;  and  sustainable 
competitiveness. Plans also take into account the industrial technology roadmaps,  a core action in 
the  new  European  Research  Area  strategy63,  that  also  supports  the  twin  transition  through 
guidelines for knowledge valorisation64, including the promotion of standardisation and intellectual 
assets management in research65. 

technological  solutions;  skills; 

The work on transition pathways66 started in June 2021 and since then it has progressed steadily 
for  all  relevant  ecosystems  concerned  since  (9  industrial  ecosystems  developing  10  transition 

61  The  Alliance  on  Processors  and  Semiconductor  Technologies  was  launched  in  2021,  but  it  is  not  yet 
operational. 
62 COM(2021) 350 final. 
63 COM(2020) 628 final 
64 Council Recommendation (EU) 2022/2415 of 2 December 2022 on the guiding principles for knowledge 
valorisation 
65 Commission Recommendation (EU) 2023/499 of 1 March 2023 on a Code of Practice on the management 
of intellectual assets for knowledge valorisation in the European Research Area and  
Commission Recommendation (EU) 2023/498 of 1 March 2023 on a Code of Practice on standardisation in 
the European Research Area 
66 EU Transition Pathways (europa.eu). 

35 

 
 
 
 
 
pathways).  Five  transition  pathways  have  been  published  and  are  being  implemented  (Tourism, 
Proximity & Social Economy, Chemicals, Construction, and Textiles), one is upcoming (Mobility), and 
four  transition  pathways  launched  consultations  in  July  2023  (Aerospace  &  Defence,  Agri-food, 
Metals,  and  Retail).  To help  this  work,  the  Industrial  Forum67  prepared  a  common  blueprint,  which 
and sets out key elements and considerations for the creation of pathways. 

Each pathway follows a process of information gathering, pre-consultation, preparation, publication 
and  implementation,  in  an  open  and  collaborative  way  open  to  all  stakeholders.  The  process 
involved  is  not  only  a  co-creation  process  but  also  co-implementation  to  support  the  industrial 
ecosystem in the twin transitions. 

Lastly,  the  European  Monitor  of  Industrial  Ecosystems  project68  aims  to  analyse  the  green  and 
digital  transformation  of  industrial  ecosystems  and progress  made  over time.  The  focus  is  on  14 
industrial ecosystems and 15 green and digital technology groups that are analysed from different 
perspectives. 

67 Register of Commission expert groups and other similar entities (europa.eu). 
68 European Monitor of Industrial Ecosystems (europa.eu) 
36 

 
 
 
 
SME STRATEGY 

In March 2020, the Commission adopted the SME strategy for a sustainable and digital Europe69. Its 
aim was to unleash the power of Europe’s SMEs to lead the twin transitions. Many new challenges 
have emerged for SMEs since the adoption of the SME strategy. As a result, the priorities identified 
in the strategy  have  only gained  in importance: digitalisation helped SMEs weather the  COVID-19 
pandemic, and sustainable practices helped them lower their energy bills in periods of high inflation. 
To support SMEs even beyond the actions contained in the SME Strategy, the Commission adopted 
an SME Relief Package in September 202370 (see Annex 3a). 

This annex presents some of the key achievements of the 2020 SME strategy. 

69 COM(2020) 103 final. 
70 COM(2023) 535 final. 

37 

 
 
 
 
 
 
 
 
 
CAP ACITY  BUILDI NG AND  SUPPOR T FOR THE TWIN   TRANSITIONS  

Competitive  sustainability  is  Europe’s  guiding  principle  for  the  future.  Achieving  a  climate  neutral, 
resource  efficient  and  agile  digital  economy  requires  the  full  mobilisation  of  SMEs.  Many  actions 
under  the  SME  strategy  supported  SMEs  in  reaping  the  full  potential  of  the  twin  transitions.  In 
January 2022, the new Enterprise Europe Network, including the sustainability advisers, took up its 
work71.  Moreover,  the  Digital  Innovation  Hubs72,  the  digital  crash  courses  and  the  intellectual 
property action plan73 helped SMEs access new digital technologies.  

SMEs can benefit from over EUR 45 billion under the Recovery and Resilience Facility74 (of which EU 
countries must dedicate  at least  20%  to  the digital transition and 37%  to  the climate transition). 
EUR 300  million  have  has  been  made  available  to  SMEs  to  encourage  breakthrough  innovations 
delivering  Green  Deal  objectives  under  the  European  Innovation  Council.  In  addition,  to  help  SMEs 
find skilled employees, the Skills Pact was launched in 202075. In 2021, the European Institute of 
Innovation and Technology (EIT) has put more than EUR 100 million funding in more than 1670 pre-
seed  and  seed  start-ups  and  scale-ups  in  strategic  sectors,  which  has  attracted  nearly  EUR  1.9 
billion in investment.76 The EIT’s Regional Innovation Scheme (RIS)77 has so far supported more than 
900 start ups in modest to moderate innovation countries since its creation.  By the end of 2025, 
the EIT will have hubs in all RIS-eligible areas. 

REDUCING  REGU LATORY  BURDEN  AND  
ACCESS  

IMPRO VING  MAR KET 

European SMEs perceive legislation to be complex and burdensome, especially due to the different 
procedures in Member States. These barriers deter many of them from doing cross-border business 
and  scaling  up.  To  reduce  regulatory  burden,  the  Commission  has  introduced  the  SME  filter 
identifying  legislation  of  particular  relevance  for  SMEs,  and  has  set  up  the  Single  Market 
Enforcement Task Force78.  

The  Single  Digital  Gateway,  accessible  through  the  Your  Europe  portal,  was  implemented  and 
facilitates  online  access  to  information,  administrative  procedures,  and  assistance  services  that 
people  and  businesses  may  need  in  another  EU  country.  Following  up  to  the  SME  Strategy79,  the 

71 https://een.ec.europa.eu/about-enterprise-europe-network/advice-support/sustainability  
72 https://european-digital-innovation-hubs.ec.europa.eu/home  
73 COM(2020) 760. 
74 https://ec.europa.eu/economy_finance/recovery-and-resilience-
scoreboard/assets/thematic_analysis/3_SME.pdf  
75 https://pact-for-skills.ec.europa.eu/index_en  
76 Since its creation, the EIT’ supported start-ups and scale-ups have attracted EUR 5.8 billion in investment. 
You can consult the EIT Business Creation Catalogue here: https://eit.europa.eu/sites/default/files/final_-
_accepted_tc_-_bc_catalogue_2022-23_2.pdf. More information about the EIT: https://eit.europa.eu/ 
77 https://eit.europa.eu/activities/eit-regional-innovation-scheme-ris-closing-innovation-divide-europe 
78 COM(2020) 94 final. 
79 In which the Commission committed to consult and assess the need for additional company law measures 
to facilitate cross-border expansion and scale-up by SMEs. 

38 

 
 
 
 
 
 
Commission adopted a proposal to further digitalise company law80 in March 2023, with a view to 
supporting  SMEs  and  reducing  administrative  burden  on  companies.  The  proposal  will  reduce  or 
remove  formalities  in  cross-border  situations  and  is  expected  to  cut  administrative  burden  for 
companies  by  around  EUR  437  million  per  year  thanks  to,  amongs  others,  the  multilingual  EU 
Company  Certificate,  removing  the  apostille  for  company  documents  and  applying  the  “once-only 
principle” for setting up cross-border subsidiaries and branches. The Commission also helped set up 
an Early Warning Europe Mentor Academy that created a training programme for business mentors 
working with companies in financial distress.  

To  support  start-ups,  a  joint  Member  State  declaration  for  a  European  Start-up  Nations  Standard 
was launched in March 2021, and the Europe Startup Nations Alliance has been operational since 
July  202281.  The  European  Blockchain  Regulatory  Sandbox  has  fostered dialogue  and  cooperation 
by  allowing  making  it  possible  for  developers  to  present  their  business  cases  and  discuss  legal 
guidance  with  regulators.  The  aim  is  to  remove  legal  and  regulatory  uncertainties  for  use  cases 
based on decentralised blockchain solutions.  

Furthermore,  to  help  SMEs  engage  in  markets  beyond  the  EU,  the  Access2Markets’  (A2M) 
information portal has been launched82, and the Erasmus for Young Entrepreneurs Global scheme83 
was  extended  in  March  2021  to  six  non-European  destinations.  Since  the  adoption  of  the  SME 
strategy, the Commission has also adopted the long-term competitiveness strategy in March 2023 
and has committed to reducing the burden of reporting obligations by 25% without compromising 
any  policy  objectives,  such  as  social  or  environmental  imperatives.  In  addition,  the  Commission 
provides  support  to  Member  States  through  the  Technical  Support  Instrument,  to  improve  the 
business environment. 

IMPROVING ACCESS TO  FIN ANCING  

Access to finance is essential for SMEs to finance the investment needs for the transition. However, 
at all stages of development, small businesses struggle more than large enterprises to get finance. 
Therefore, the Commission included, within the InvestEU programme, the SME window84, aiming at 
guaranteeing lending and equity support to EU SMEs and small midcaps. Since the signature of the 
InvestEU Guarantee Agreement in 2022 with the European Investment Bank Group, and notably the 
European  Investment  Fund,  more  than  1,800  SMEs  and  small  mid-caps  received  over  EUR  800 
million  in  debt  and  equity  financial  support,  which  helped  them  improve  their  competitiveness, 
benefit  from  solvency  support  and  foster  their  innovation,  digitalisation  and  transition  to 
sustainability. The SME Window includes measures aiming at e.g.  favouring the access of SMEs to 
public  equity  markets  via  the  “IPO  initiative”,  providing  scaling  up  financing  through  the  ESCALAR 
initiative85,  supporting  green  tech  and  gender-smart  finance  initiatives.  In  addition,  the  State  aid 
rules  to  promote  risk  finance  investments  have  been  simplified  ,  and  some  of  their  key  concepts 
clarified.86  Some  of  these  actions  (e.g.,  ESCALAR,  gender-smart  financing)  and  others  aimed  at 

80 COM(2023) 177 final. 
81 https://startupnationsstandard.eu/  
82 https://trade.ec.europa.eu/access-to-markets/en/home  
83 https://eyeglobal.eu/  
84 https://single-market-economy.ec.europa.eu/access-finance/investeu/investeu-fund-sme-window_en  
85 Link to the ESCALAR call for expression of interest: https://www.eif.org/InvestEU/escalar-call-for-expression-
of-interest/index.htm  
86 See in particular Communication from the Commission  – Guidelines on State aid to promote risk finance 
investments,  OJ  C508,  16.12.2021;  Communication  from  the  Commission  –  Framework  for  State  aid  for 
39 

 
 
 
 
facilitating access to finance for young and innovative companies, particularly deep tech scale-ups, 
are  in  the  process  of  being  implemented  as  part  of  the  New  European  Innovation  Agenda,  which 
was adopted by the European Commission in July 2022. Over the last year, the European Innovation 
Council  Fund  has  taken  more  than  150  investment  decisions  into  deep-tech  companies,  worth 
around EUR 1 billion. Over 50 of the EIC companies have already completed their investment rounds 
leveraging  approximately  3.5  Euro  of  additional  equity  investment  for  every  Euro  of  EIC  
investment. 

GOVERN ANCE  

The SME strategy needed commitment and actions at both EU and national levels. The SME Envoy 
Network,  which  brings  together  the  Commission,  Member  States’  SME  policy  makers  and  SME 
organisations,  has  been  essential  in  exchanging  best  practices  on  SME  support,  and  in  identifying 
SME-relevant  policy  initiatives  through  the  SME  filter.  The  EU  SME  Envoy  was  appointed  on  31 
January 202487, as reiterated in the SME Relief Package88 adopted in September 2023. 

research  and  development  and  Innovation,  OJ  2022/C  414/01;  Commission  Regulation  (EU)  2023/1315 
amending  Regulation  (EU)  No 651/2014  declaring  certain  categories  of  aid  compatible  with  the  internal 
market in application of Articles 107 and 108 of the Treaty (“GBER”), OJ L 167, 30.6.2023.  
87 On 31 January 2024, Markus Pieper was appointed as EU SME Envoy. He  will report directly to President 
Ursula von  der  Leyen.  Mr  Pieper  will  take  office  in  the  Directorate-General  for  Internal  Market,  Industry, 
Entrepreneurship and SMEs (DG GROW) and he will also report to the Commissioner for Internal Market on all 
SME-related activities. The date of effect of his appointment will be determined later. 
88 COM(2023) 535 final. 

40 

 
 
 
 
 
 
 
 
ANNEX 3  

SME RELIEF PACKAGE 89 

Policy tracker 

89 COM (2023) 535 final. 

41 

 
 
 
 
 
 
 
 
 
 
s
E
M
S
R
O
F
R
E
I
S
A
E
S
G
N
H
T
G
N
K
A
M

I

I

STAT
US 

ACTION 

DESCRIPTION 

Action 1: propose a tax simplification 
directive establishing a Head Office Tax 
System for SMEs 

In September 2023, the Commission proposed a 
Directive establishing a Head Office Tax System for 
SMEs90. This gives SMEs operating cross-border 
through permanent establishments the option to 
deal with only one tax administration, instead of 
having to comply with multiple tax systems. 

The proposed Directive is now being discussed by 
the co-legislators and agreed by the European 
Parliament and the Council to reach an agreement 
before its adoption and entry into force. 

2024 

Action 2: systematically consider specific 
SME-friendly provisions in new legislative 
proposals, where appropriate, justified and in 
line with Union EU policy objectives 

Under development. 

Action 3: appoint a dedicated EU SME Envoy 
reporting directly to the President 

The EU SME Envoy was appointed on 31 January 
2024. 

Action 4: ensure the EU SME Envoy’s 
participation in Regulatory Scrutiny Board RSB 
hearings on initiatives that have a high impact 
on SMEs 

To be implemented when the SME Envoy has taken 
office. The EU SME Envoy was appointed on 31 
January 2024.  

2024 

Action 5: promote with the co-legislators the 
implementation of an ‘on the spot’ 
assessment of the impact of their substantial 
amendments on SMEs and competitiveness of 
their substantial amendments 

Under development. 

2024  Action 6: engage with EU agencies to make it 
easier for SMEs to use the agencies’ services  

Under development. 

2024  Action 7: work with Member States to 
promote regulatory sandboxes 

Under development. 

Action 8: launch by the end of 2023 the 
once-only technical system in co-operation 
with Member States and further expand the 
scope of the Single Digital Gateway to cover 
new procedures, taking into account SME 

The Commission has proposed expanding the SDG’s 
scope in its proposals on short-term rentals91, the 
Net-Zero Iindustry Act92, the Critical Raw Materials 
Actprojects93, the Data Governance Act94, driving 
licences95, European associations96 and the right to 
repair97. 

90 COM (2023) 528 final (Head Office Tax System for SMEs (europa.eu)) . 
91 COM(2022) 571 final. 
92 COM(2023) 161 final. 
93  Critical Raw Materials Act (europa.eu). 
94  Regulation  (EU)  2022/868  of  the  European  Parliament  and of  the  Council  of  30   May  2022  on  European 
data governance and amending Regulation (EU) 2018/1724 (Data Governance Act). 
95 Updated requirements for driving licences (europa.eu). 
42 

 
 
 
 
 
 
 
 
 
 
 
 
 
needs 

Action 9: present the next set of proposals to 
rationalise reporting requirements 

Action 10: propose a new Late Payment 
Regulation 

The infrastructure for the once-only technical 
system98 has been launched in December 2023 
and the process of connecting national authorities 
to the system will follow in 2024.  

In October 2023, the Commission put forward, as 
part of the 2024 work programme99, 26 additional 
rationalisation proposals. These aim to reduce 
administrative burden without lowering social, 
safety, consumer protection, environmental or 
economic standards. 

In September 2023, the Commission proposed a 
new Regulation on late payments in commercial 
transactions to tackle payment delays. Late 
payments are  an unfair practice that compromises 
SMEs’ cash flows and hampers the competitiveness 
and resilience of supply chains. The proposal is now 
being discussed and agreed by the European 
Parliament and the Council to reach an agreement. 

Action 11: encourage Member States to 
allocate additional resources to InvestEU 
national compartments and provide additional 
guidance on the application of the 'do no 
significant harm’ (DNSH) principle 

In September 2023, the Commission adopted its 
amended Do No Significant Harm (DNSH) 
guidance100. Discussions with Member States on 
transferring resources to national compartments of 
InvestEU are ongoing. 

2024 

Action 12: work towards setting up a pilot 
facility to allow export credit agencies to 
support SMEs’ in trading with Ukraine 

Under development. 

2024 

Action 13: promote the use of standardised 
procurement provisions and conditions 
suitable for SMEs to improve the participation 
of SMEs in public procurement.  

2024 

Action 14: ensure that SMEs have a simple 
and standardised framework to report on ESG 
issues, by limiting the risk of disclosure 
requirements trickling down on non-listed 
SMEs in the value chain of undertakings in the 
scope of CSRD, and ensuring the rapid 
delivery of voluntary standards for non-listed 
SMEs. 

Under development. 

Under development. A public consultation on 
sustainability reporting standards for SMEs is 
ongoing and open until 21 May 2024101. 

96 COM(2023) 516 final. 
97 COM(2023) 155 final. 
98 Once Only Technical System (europa.eu). 
99 Commission work programme 2024 (europa.eu). 
100 C/2023/111. 
101 https://www.efrag.org/News/Public-479/EFRAGs-public-consultation-on-two-Exposure-Drafts-on-
sustainability 

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Action 15: encourage financial institutions to 
include green SME financing in their business 
models by:  

2024 

a. developing a green loans definition and  

b. assessing the Green Asset Ratio 

Under development. 

Action 16: present a proposal to establish an 
EU Talent Pool and an initiative to improve the 
recognition of qualifications and skills of third 
country nationals to help skills gaps in the EU 
labour market – by Q4 2023 

In November 2023, the Commission presented a 
Skills and Talent Mobility package102 to make the 
EU more attractive to talent from outside EU, and 
to facilitate mobility within the EU. Among other 
new initiatives, the Commission proposes to 
establish create an EU talent pool103 to facilitate 
the recruitment of jobseekers from non-EU 
countries in occupations facing EU-wide shortages. 
The proposal is now being negotiated by the 
European Parliament and the Council. 

2024 

Action 17: work with groups whose untapped 
entrepreneurial potential remains high, such 
as women, young people and persons with 
disabilities 

Projects targeting the groups mentioned are 
launched and ongoing under the Single Market 
Programme (SMP)104 and the European Social Fund 
Plus (ESF+)105. 

2024 

Action 18: be attentive to the needs of 
companies that outgrow the thresholds of the 
SME definition, and the broader range of 
small mid-cap companies; and by the end of 
2023: 

a. analyse the impact of high inflation and 
longer-run increases in productivity, as well as 
the interaction with possible additional 
measures for mid-caps, to raise - when 
justified - the financial thresholds of the 
current SME definition; 

b. develop a harmonised definition for small 
mid-cap companies; 

c. thereafter, take actions necessary to reflect 
a revised SME definition in relevant legislative 
acts, and 

d. build a dataset based on the small mid-cap 
definition and assess possible measures to 
support these companies in their growth 
(including potential application in adapted 
form of certain measures favouring SMEs). 

Under development. 

102 Commission proposes new measures on skills and talent (europa.eu). 
103 Proposal for a Regulation on the establishment of an EU Talent Pool. 
104 Overview - European Commission (europa.eu) 
105 European Social Fund Plus (europa.eu). 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2024 

Action 19: assess framework conditions for 
business transfers in Member States together 
with the network of SME Envoys – by Q2 
2024 

Under development. 

Date: 1 February 2024 

 Implemented  

 Launched /  

       Under preparation 

2024: To be launched 

45 

 
 
 
 
 
 
ANNEX 4  

The Single Market at 30 106 

Policy tracker 

106 COM (2023) 162 final. 

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ACTION 

DESCRIPTION 

Monitor selected indicators from the Single 
Market and Competitiveness Scoreboard107 
and other relevant sources related to 
enforcement and the business environment 

Setting up a single notification entry point for 
Single Market notifications 

Launching a priority process, together with 
Member States, to tackle barriers to the free 
movement of services in industrial 
ecosystems with a high-services content 
(construction, retail, tourism and business 
services) 

The Commission proposes to each Member 
State to establish a dedicated Single Market 
office to address Single Market barriers. 

Adapting the Services Directive notification 
tool and providing additional targeted 
guidance to Member States for applying the 
proportionality criteria. 

In the Single Market and Competitiveness 
Scoreboard, the Commission monitors how EU 
Single Market rules are implemented in 
Member States (e.g. transposition and 
conformity deficits, public procurement, 
payment delays by public authorities and 
availability of digital public services), using as 
well as indicators developed in the reform 
recommendations for professional services. 

The Single Notification Window (SNW)108 was 
launched on 19 September 2023 and is now 
available online. The platform gives national 
administrations a better overview of the 
notification requirements relevant for the 
Single Market. It which simplifies the 
procedural steps for notifications to the 
Commission and helps Member States to 
ensure compliance with EU law. 

The Commission initiated a process whereby it 
is working with Member States and 
stakeholders to analyse and address barriers 
to the provision of services in the 
construction, retail and tourism ecosystems. 

The Single Market needs a dedicated voice 
presence within national administrations. The 
office should have senior leadership, and 
appropriate resources, and a standing brief to 
proactively raise issues and propose solutions 
within the national decision-making system. 
Discussions and exchange of good practices 
on the organisation of the services 
responsible for the Single Market offices are 
ongoing within the SMET. SMET members109 
have agreed to share their best practices to 
further develop the concept for these offices. 

The Services Directive notifications tool has 
been significantly improved and strengthened. 
This has been done by introducing a detailed 
assessment grid and guidance for Member 
States’ proportionality assessments, aligning 
it with the data input form for regulated 

107 The Single Market and Competitiveness Scoreboard | Single Market and Competitiveness Scoreboard 
(europa.eu). 
108 Single notification window (europa.eu). 
109 Members and Sherpas - Single Market Enforcement Taskforce (SMET) - European Commission (europa.eu)  

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
professions. The Internal Market Information 
system (IMI)110 online tool was improved and 
adjusted so that Member States can use the 
new form for notifications as of February 
2024. This will contribute significantly to 
better and less restrictive regulation and 
avoid recourse to costly and unnecessarily 
confrontational ex post enforcement. 

The Commission is promoting the timely 
agreement and widespread implementation 
by interested Member States of a common 
electronic form of electronic form for 
declaring posted workers. In parallel, the 
Commission is working to make a multilingual 
portal available so that companies can submit 
posting declarations online in their own 
language for all Member States that decide to 
make use of this tool. 

This aims to limit both the transposition and 
the conformity deficit to 0.5%. Monitoring will 
be done via the Single Market and 
Competitiveness Scoreboard. 

This aims to solve a minimum of 90% of the 
cases (when cross-border rights in the Single 
Market are breached) within 12 months in 
each Member State. Monitoring will be done 
via the Single Market and Competitiveness 
Scoreboard. It is up to the Member States to 
try to informally solve those cross-border 
cases through their SOLVIT centres. Those 
cases that, due to their nature, cannot be 
solved through SOLVIT, need to be addressed 
through other, possibly formal, means, 
including infringement procedures. 

The Single Market Enforcement Task Force 
(SMET) is a useful cooperation tool for 
removing or easing barriers in the Single 
Market. Member States are working on 
significant projects, such as improving the 
permitting for renewable energy; streamlining 
the requirements for the cross-border 
provision of services; removing prior checks 
and documents requirements for the 
recognition of professional qualifications;, and 
IBAN discrimination111. 

Introducing a common e-declaration for 
posted workers 

Monitoring specific enforcement targets set on 
enforcement  

Monitoring benchmark on SOLVIT  

Reporting on progress in solving Single Market 
barriers using cooperative tools, such as SMET 

110 Internal Market Information System (IMI) - The EU Single Market - European Commission (europa.eu). 
111 More  detailed information on the achievements of the taskforce is available in the  SMET  report:  The Single 
Market Enforcement Taskforce (europa.eu). 

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Creating and interconnecting common 
European data spaces in strategic sectors and 
domains of public interest. 

The unitary patent will be accompanied by a 
reform of standard essential patents setting 
out the global licensing standards 

Presenting an initiative on digitalising social 
security coordination 

Working on a pilot project for the European 
Social Security Pass (ESSPASS) 

Since 2021 the Commission has published 
several calls for proposals under the Digital 
Europe programme for to create data spaces 
in strategic sectors and key areas of public 
interest that to strengthen digital capacity 
across the EU. 

The work on the data spaces is accompanied 
by a review of the policy and legislative 
framework for data access and use. This 
includes the Data Governance Act112, the Data 
Act113, and the Implementing Act on High-
value datasets114 under the Open Data 
Directive115, which was adopted in December 
2022. 

On 27  April 2023, the Commission proposed 
a new framework for standard essential 
patents (SEP)116. This should maximise R&D 
investment by holders and implementers alike 
of EU standard essential patents. Other 
proposals of the patent package related to 
supplementary protection certificates and 
compulsory licensing in case of emergencies, 
will also bring more transparency, legal 
certainty, and efficient procedures in the 
Single Market, benefiting EU companies, SMEs 
and individuals alike.    

On 6 September 2023, the Commission 
proposed new steps to further digitalise the 
coordination of social security in the EU117 
with the aim to make access to social security 
services across borders quicker and simpler. 

The first phase of ESSPASS piloting activities 
took place between 2021 and -2022. A 
second phase is taking place from 2023 to 
2025118. Based on the outcomes of the pilot 

112 European Data Governance Act | Shaping Europe’s digital future (europa.eu). The Data Governance Act entered 
into  force  on  23   June  2022  and,  following  a  15-month  grace  period,  is  has  been  applicable  since  September 
2023. 
113  Data  Act  |  Shaping  Europe’s  digital  future  (europa.eu).  On  the  28   June  2023,  a political  agreement was 
reached between the European Parliament and the Council of the EU on the Data Act.  
114 EUR-Lex - 32023R0138 - EN - EUR-Lex (europa.eu). 
115 EUR-Lex - 32019L1024 - EN - EUR-Lex (europa.eu). 
116  COM(2023) 232  –-  Proposal  for  a  regulation  of  the  European  Parliament  and  of  the  Council  on  standard 
essential patents and amending Regulation (EU) 2017/1001. This proposal was part of the Commission “‘patents 
package”’  that  included  other  proposals  in  the  area  of  supplementary  protection  certificates  (four  regulations: 
COM(2023) 221,  COM  (2023) 222,  COM  (2023)  223,  COM  (2023) 231)  and  on  compulsory  licensing 
(COM(2023) 224). 
117 COM(2023) 501 final. 
118  Currently,  12  Member  States’  institutions  are  piloting ESSPASS to  digitally  issue  and  verify  citizens’  social 
security entitlements documents used across borders, such as the ‘Portable Document A1’ for work purposes and 
the  EHIC  in  healthcare:  European  Social  Security  Pass  -  Employment,  Social  Affairs  &  Inclusion  -  European 

49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
projects, the Commission will decide on the 
next steps,. This includes deciding on on the 
feasibility of deploying ESSPASS throughout 
Europe and whether this would need a new 
legislative framework. 

On 12  September 2023, the Commission 
adopted a key package of initiatives to reduce 
tax compliance costs for large, cross-border 
businesses in the EU119. BEFIT will reduce tax 
compliance costs for large businesses, 
primarily those who operate in more than one 
Member State, and make it easier for national 
authorities to determine what taxes are 
rightly due. 

On 17  May 2023, the Commission released 
proposals for an ambitious and 
comprehensive reform of the EU Customs 
Union120. The proposed measures aim to 
simplify customs processes for businesses. By 
embracing digital transformation, the reform 
will reduce burdensome customs procedures, 
and will provide customs authorities with the 
tools and resources to properly assess and 
stop imports that pose real risks to the EU, its 
people, and its economy. 

The Commission is preparing potential 
common training frameworks in co-operation 
with Member States and stakeholders. The 
Commission is also preparing a study on the 
better use of digitalisation to make the 
recognition of qualifications more efficient, 
which includes the concept for the European 
professional card. 

On 15  November 2023, the Commission 
adopted a Recommendation on the 
recognition of qualifications of third-country 
nationals121. 

In April 2023, the Commission launched a 
pilot with several Member States (Austria, 
Finland, France, Spain, Romania) to test the 
practical use of an EDSC in work, education 
and training. 

The final European digital skills certificate will 
be rolled out in 2024, based on the pilot and 

Introducing a single corporate tax rulebook for 
the EU via the Business in Europe: Framework 
for Income Taxation (BEFIT) , creating a 
coherent approach to business taxation 
throughout the EU 

Reforming the Customs Union 

Exploring with Member States the possibility 
of using the European professional card and a 
common training test and similar tools more 
widely 

Facilitating the recognition of qualifications of 
third-country nationals  

Piloting the European digital skills certificate 
(EDSC) to ensure a minimum level of quality 
of digital skills and upskilling and its 
recognition across the EU 

Commission (europa.eu). 
119 COM(2023) 532 final (Business in Europe: Framework for Income Taxation (BEFIT) (europa.eu)). 
120 COM(2023) 257 final, COM(2023) 258 final, COM(2023) 259 final, COM(2023) 262 final (EU Customs Reform 
(europa.eu)). 
121 C(2023) 7700 final. 

50 

 
 
 
 
 
 
 
 
Completing the European Education Area (EEA) 
by 2025122 

the following feasibility study. 

In November 2022, the Commission published 
its Progress Report towards the achievement 
of the European Education Area123. The report 
highlights the work done so far, and the 
challenges still to be addressed. 

In 2023, the Commission invited Member 
States and other stakeholders to join the EEA 
mid-term review process. This focuses on 
drawing lessons from the first initial years 
and building momentum and commitment 
leading up to until 2025. 

In 2024, the Commission will propose a 
blueprint for the future joint European degree, 
which will contribute to achieving a European 
Education Area. It will be supported by 
recommendations on quality assurance in 
higher education and on attractive academic 
careers.124 

In 2025, a full report on the European 
Education Area is planned. 

Date: 1 February 2024 

 Implemented  

 Launched / Under preparation 

122 Homepage | European Education Area (europa.eu). 
123 Building the European Education Area: Progress report published | European Education Area (europa.eu). 
124 Commission work programme 2024. COM(2023) 638 final. 

51 

 
 
 
 
 
 
 
 
ANNEX 5 

OVERVIEW OF RESILIENCE  
MEASURES OF KEY  
INTERNATIONAL PARTNERS 

NB: This document is a non-exhaustive list of resilience measures to date taken by the EU’s key international partners . 

52 

 
 
 
 
 
 
 
 
T y p e   o f   r e s i l i e n c e   m e a s u r e s   e x a m i n e d  

1.  Early  warning  system:  market  and  supply  chain  monitoring,  iIn-depth  analysis  (strategic 

dependencies, industrial capacities, etc.) 

2.  Collection of key supply chain information from public authorities and iIndustry 
3.  Funding/subsidies,  tax  incentives,  support  to  investments,  R&D  etc.,  in  specific  sectors/value 

chains 

4.  Public procurement measures used in support of domestic production capacities, resilience, and 

security of supply, etc. 
5.  Stockpiling of critical inputs 
6.  Prioritisation of supplies of goods and services 
7.  Trade and investment measures: tariffs, export restrictions, anti-coercion measures, standards, 

etc.  
International partnerships 

8. 

I n c l u d e d   c o u n t r i e s   a n d   t e r r i t o r i e s  

US, UK, Canada, Japan, China, Singapore, Korea, India, Australia, and Taiwan 

L i s t   o f   a c r o n y m s  

Afa – Alliances for Action, Singapore 
ALMM - Approved list of models and manufacturers, India 
CET - Critical and emerging technologies, US 
CSF – Centre for Strategic Futures, Singapore 
CFIUS – Committee on Foreign Investment in the United States, US 
DPA – Defense Production Act, US 
EDI – Economic deterrence initiative, UK 
EIS – Enterprise Innovation Scheme, Singapore 
EO – Executive orders, US 
ESPA – Economic Security Promotion Act, Japan 
EST – Emerging Stronger Taskforce, Singapore 
FABS - Facilitating American-Built Semiconductors, US 
FEPO - Future Economy Planning Office, Singapore 
FIRB – Foreign Investment Review Board, Australia 
FSC – Korea Financial Services Commission, South Korea 
GPA –- Government Procurement Agreement, US 
GX – Green transformation, Japan 
H2Hubs – Regional clean hydrogen hubs, US 
IPEF – Indo-Pacific Framework for Prosperity 
IRA – Inflation Reduction Act, US 
ITC – Investment tax credit, Taiwan 

53 

 
 
 
 
 
 
 
ITM – Industry Transformation Map, Singapore 
JOGMEC – State-owned Japan Oil, Gas and Metals National Corporation, Japan 
KOMIR –- Korea Mine Rehabilitation and Mineral Resources Corporation, South Korea 
MAFF – Ministry of Agriculture, Forestry and Fisheries, Japan 
METI – Ministry of Trade and Industry, Japan 
MHLW – Ministry of Healthy, Labour and Welfare, Japan 
MLCCs –- Multilayer ceramic capacitors, Japan 
MLIT –- Ministry of Land, Infrastructure, Transport and Tourism, Japan 
MoA – Memorandum of agreement 
MoC – Memorandum of cooperation 
MoU – Memorandum of understanding 
MoTIE – Ministry of Trade, Industry and Energy, South Korea 
NdFeB – Neodymium-iron-boron, US 
NDS – National defence stockpile, US 
NEMS – National emergency management stockpile capability, Australia 
NKPs – National key R&D programmes, China 
NEV PTE – NEV purchasing, China 
NSIA – National Security and Investment Act, UK 
ODI – Outward direct investment, UK 
PIPL – Personal Information Protection Law, China 
PLI – Production linked incentive, India 
PPE – Personal protective equipment, Australia, UK 
R&D – Research and development 
RIE2025 – Research innovation entrepreneurship programme, Singapore 
RISE – Partnership for Resilient and Inclusive Supply-chain Enhancement, Japan 
SCMs – Specified critical minerals, Japan 
SLACIP Act – Security Legislation Amendment Critical Infrastructure Protection Act, Australia  
SMA –- Southeast Asia Manufacturing Alliances, Singapore 
SPECS – Promotion of manufacturing of electronic components and semiconductors, India 
TSMC – Taiwan Semiconductor Manufacturing Company, Japan 
UFLPA – Uyghur Forced Labour Prevent Act, US 

54 

 
 
 
 
 
I n t r o d u c t i o n    

Although Europe has and will gain resilience from being open and integrated in global value chains, 
recent crises such as the COVID-19 pandemic and the Russian invasion of Ukraine have highlighted 
that  economic  dependencies  in  global  trade  can  be  weaponised  to  our  own  disadvantage.  To 
address such dependencies, governments all over the world are adopting measures to secure their 
supply  chains  and,  more  broadly  to  accelerate  the  green  and  digital  transformation  in  their 
countries.  For  example,  in the  context  of  the G7  and  in  line  with  the  European  Economic  Security 
Strategy, the G7 members have collaborated intensively on issues pertaining to Economic Security 
including by setting up a dedicated platform of coordination on economic coercion. 

To  increase  our  understanding  of  today’s  emerging  context  of  “geopolitics  of  supply  chains”,  this 
annex  aims  to  give  a  non-exhaustive  picture125  of  measures  taken  by  some  of  the  EU’s  main 
international  partners  to  reduce  their  strategic  dependencies  and  reinforce  the  resilience  of  their 
supply chains necessary for the digital and green transitions.  

Gaining  a  better  understanding  of  how  international  partners  unilaterally  reinforce  their  supply 
chains can help the EU to mitigate its own strategic dependencies and strengthen its open strategic 
autonomy.  What  is  more,  it  sheds  light  on  measures  that  could  also  potentially  reinforce  supply 
risks  for  the  EU  by,  for  example,  aiming  at  encouraging  delocalisation  and  future  disinvestment 
decisions.  

With  a  strong  focus  on  measures  adopted    after  the  COVID  19  pandemic  (mostly  since  2020)  - 
which is considered as a pivotal shift for countries in addressing their strategic dependencies,  the 
inventory below lists the resilience measures that the Commission and EU delegations are  aware of 
in partner countries and territories, at the time of adoption of this document, and depending on the 
level of information for each country. 

In  consequence,  this  toolbox  should  not  be  considered  as  an  exhaustive  account  of  all 
resilience  measures  across  the  world,  but  rather  as  an  illustrative  list  reflecting  some 
key  measures  taken  by  third  countries.  It  is  therefore  likely  that  the  actual  number  of 
resilience measures adopted by international partners could be far greater. 

This  annex  specifically  looks  at  policies  undertaken  in  the  US,  the  UK,  Canada,  Japan,  China, 
Singapore,  South  Korea,  India,  Australia,  and  Taiwan-  which  are  the  most  prominent  international 
economic players that have been the most active in mitigating their dependencies and reinforcing 
their  resilience  in  a  context  of  arising  risks  from  geopolitical  tensions  and  unfair  international 
competition.  

After  scrutinising  the  collected  data,  third  country  measures  have  been  classified  into  8  specific 
categories:  

1.  Early-warning  system:  market  and  supply  chain  monitoring,  in  depth-analysis  (strategic 

dependencies, industrial capabilities etc…  

125  The  data  used  in  this  inventory  is  publicly  available  and  has  been  collected  through  the 
knowledge and intelligence of Commission services and EU delegations, notably in media articles, 
press  releases,  official  governmental  documentation,  as  well  as  from  interactions  with  respective 
public authorities. 

55 

 
 
 
 
 
2.  Collection of key supply chain information from public authorities and industry 

3.  Funding/subsidies, tax incentives, support to investment, R&D etc… in specific sectors/value 

chains 

4.  Public procurement measures used in support of domestic production capabilities, resiliency 

and security of supply, etc… 

5.  Stockpiling of critical inputs 

6.  Prioritisation of supplies of goods and services 

7.  Trade,  and  Investment  Measures:  tariffs,  export  restrictions,  anti-coercion  measures, 

standards, etc… 

8. 

International partnerships  

These  categories  have  been  chosen  as  they  mirror  policy  instruments  and  components  within 
various EU legislations and instruments - such as the EU Internal Market Emergency and Resiliency 
Act  and  the  EU  Critical  Raw  Materials  Act  –  all  embedded  with  the  objectives  of  promoting  our 
economic, industrial and technologic base in strategic areas, protecting our economic security and 
safeguarding  the  global  level-playing  field  by  strengthening  our  trade  defence  instruments,  and 
partnering  with  international  allies  to  coordinate  policies  on    supply  chain  resilience  and  to 
diversify sources of supply.  

Despite  of  the  non-exhaustive  nature  of  the  toolbox,  the  scope  of  the  categories  is  deliberately 
granular to easily classify and regroup together third countries measures as well as grasp the policy 
rationale, objectives and means of international partners in reinforcing the resilience of their supply 
chains.  

As  a  result,  we  have  identified  to  date  14  early  warning  systems  measures;  6  measures  on  the 
collection of key supply chain information from public authorities and industry; 57 measures related 
to  funding  and  subsidies,  tax  incentives,  support  to  investments,  R&D  etc.,  in  specific  sectors  and 
values chains; 10 measures on public procurement; 10 measures on stockpiling of critical inputs; 8 
measures  related  to  the  prioritisation  of  the  supplies  of  goods  and  services;  23  trade  and 
investment measures; and 27 international partnerships. 

However,    classifying  a  third  country  policy  measure  is  not  always  clear  cut  and  a 
specific measure may consequently be counted in several categories. Therefore, the total 
number of policy measures  may not be exactly accurate, but nevertheless the inventory  
sheds light on the various types of policy instruments used by international partners in 
reinforcing their respective resilience and competitiveness.   

56 

 
 
 
 
 
 
1.  Early warning system: market and supply chain monitoring, in-depth analysis 

(strategic dependencies, industrial capacities, etc.) 

•  US: Executive Order 14017 ‘America’s Supply Chains’: The involved publication, in 2022, 
of reports on: semiconductor manufacturing and advanced packaging; large-capacity batteries, 
including for electric vehicles; critical minerals, including rare earths; and pharmaceuticals and 
their active ingredients. The reports include assessments of and strategies to strengthen supply 
chains for the following industrial sectors: energy; transportation; production and distribution of 
agricultural commodities and food products; public health and biological preparedness; ICT; and 
defence. 

•  US:  The  Supply  Chain  Disruption  Task  Force,  created  in  June  2021,  is  a  coordinating 

inter-agency process on supply chain issues.  

•  US:  Executive  Orders  13953  (Addressing  the  Threat  to  the  Domestic  Supply  Chain 
from  Reliance  on  Critical  Minerals  From  Foreign  Adversaries  and  Supporting  the 
Domestic  Mining  and  Processing  Industries)  of  30 September  2020,  and  13817  (A 
Federal  Strategy  to  Ensure  Secure  and  Reliable  Supplies  of  Critical  Minerals)  of  17 
 December  2017.  EO13953  entrusted  the  Secretary  of  the  Interior  to  with  the  task  of 
producing every 180 days a report on critical minerals supplies and potential risks from foreign 
powers. EO13817 launched an in-depth review of critical minerals supply chains necessary for 
the US economy and national defence and investigated expanding mining production in the US. 

•  UK: The critical imports and supply chains strategy which was published in January 2024 
sets  out  how  the  UK  government  intends  to  help  businesses  build  secure  and  reliable  supply 
chains  in  areas  which  are  vital  to  the  UK’s  economic  prosperity,  national  security,  and  the 
delivery  of  essential  services.  The  strategy  builds  on  the  existing  sectoral  strategies,  such  as 
the  critical  raw  materials  and  semiconductors  strategies,  which  aim  to  ensure  that  UK  is  a 
centre of excellence on supply chains, building on the analytical work undertaken to date. The 
defined  critical  sectors  are  chemicals,  civil  nuclear,  communications,  defence,  emergency 
services, energy, finance, food, government, health, space, transport and water.   Moreover, The 
identified growth sectors set out are digital technology, green industries, life sciences, advanced 
manufacturing  and  creative  industries.  It  complements  the  advanced  manufacturing  plan, 
adopted in December 2023.  

•  UK:  The  UK  established  its  first  Critical  Minerals  Intelligence  Centre  in  July  2022,  which 
provides  ongoing  intelligence  on  the  supply  of  and  demand  for  critical  minerals.  The  centre 
advises the government on economic, environmental,  ethical, and geopolitical issues linked to 
supplies  of  critical  mineral  resources.  The  centre  has  already  published  reports  on  the  UK’s 
future  demand  of  for  critical  raw  materials  for  EV  electric  vehicle  batteries,  and  on  the  UK’s 
dependency for the UK on 26 critical materials. 

•  UK:  The  Integrated  Review  Refresh  2023  outlines  how  the  UK  government  needs  to 
respond  to  the  deteriorating  global  security  environment.  The  strategy  identifies  energy 
security,  economic  security,  and  democratic  and  wider  societal  resilience  as  priority  areas  to 
address the UK’s vulnerabilities. It builds on the Integrated Review from 2021 which included a 
supply  chains  resilience  framework  based  on  the  following  five  areas:  diversification, 
international partnerships, stockpiling and surge capacity, onshoring, and demand management. 
The  review  sets  out  to  identify  whether  it  may  be  beneficial  to  manage  the  demand  for 
components or goods, considering substitutes and alternatives, innovation, and circularity. The 

57 

 
 
review’s recent Refresh from 2023 emphasises economic security.  

•  Japan:  As  part  of  the  Economic  Security  Promotion  Act  (ESPA),  an  umbrella  instrument 
adopted  in  May  2022,  and  intended  for  full  implementation  within  the  next  2  years,  the 
Japanese  government  selected  11 materials  as  ‘specified  critical  materials  (SCMs)’  which  are 
strategically important the country. Measures to ensure a stable supply of these products were 
included in the comprehensive economic stimulus package in 2022. The list covers 11 sectors 
and 4 ministries (list below). For each of these critical products, the ministries have published 
sectoral  policy  guidelines  that:  (i)  analyse  their  importance  for  Japan’s  economic  security, 
external  dependencies  and  supply  chains;  (ii)  lists  all  existing  sectoral  policies  and  measures; 
and (iii) explains why supplementary measures are necessary on economic security grounds. In 
November  2023,  the  government  announced  its  intention  to  designate  additional  critical 
commodities. The list of critical products is evolving with the upcoming decisions to designate 
new  critical  products  such  as  uranium  (as  one  of  the  critical  minerals)  and  multilayer 
ceramic capacitors (MLCCs) by the end of 2023.  

i.  Ministry of Trade and Industry (METI) (8): semiconductors, cloud computing, 
storage  batteries,  permanent  magnets,  critical  minerals,  machine  tools  and 
industrial robots, aircraft part materials and LNG.  

ii.  Ministry of Land, Infrastructure, Transport and Tourism (MLIT) (1): maritime 
transport / shipping equipment (engines, propellers, navigational equipment (sonar) 
etc.); to support maritime transport.  

iii.  Ministry  of  Agriculture,  Forestry  and  Fisheries  (MAFF)  (1):  fertiliser  raw 
materials. The establishment of a stockpiling system and state support on storage 
fees for fertilisers held by private companies (e.g. fertiliser manufacturers) will be 
considered. 

iv.  Ministry of Healthy, Labour and Welfare (MHLW) (1): antimicrobials. 

•  Ministry of Healthy, Labour and Welfare (MHLW) (1): antimicrobials. 

•  Australia:  In 2021, the Australian government created the Office of Supply Chain Resilience 
under  the  Prime  Minister.  The  office  is  dedicated  to  monitoring  Australian  supply  chains’ 
resilience. Its tasks of the Office include:  health, safety  and wellbeing, economic stability and 
viability,  national  security  and  international  partners.  The  office  advises  the  Australian 
government on supply chain risks and potential actions to improve resilience. benefit. 

•  South Korea: since 2022, advance warning on supply chains and economic security issues are 
provided by: (i) the Economic Security Centre managed by the Ministry of Foreign Affairs; (ii) 
the  Global  Supply  Chain  Analysis  Centre  managed  by  the  Ministry  of  Trade,  Industry  and 
Energy;  and  (iii)  the  Office  of  Economic  Security  managed  by  the  Office  of  the  President 
provide, since 2022, advance warning on supply chains and economic security issues.  

•  South  Korea:  South  Korea  has  an  early  warning  system  in  place  to  monitor  20  key  raw 

materials to ensure stable supplies.  

•  Singapore:  Alliances  for  Action  (AfA)  (June  2020).  The  AfAs  are  industry-led  coalitions, 
working  in  partnership  with  the  government,  to  prototype  ideas  in  areas  of  opportunity  for 
Singapore  or  to  address  a  common  challenge.  A  total  of  nine  AfAs  were  formed  under  the 
Emerging  Stronger  Taskforce  (EST):  -  Supply  Chain  Digitalisation;,  -  Sustainability;,  Digitalise 
Built  Environment;,  -Smart  Commerce;-  Robotics  Solutions;,  -  Safe  and  Innovative  Visitor 

58 

 
 
Experiences;, - EduTech;, -MedTech; and, - AgriTech Ecosystem. 

•  Singapore:  Emerging  Stronger  Taskforce.  To  oversee  the longer-term  work  of  responding 
to the structural shifts in Singapore’s economy, the Emerging Stronger Taskforce (EST) was set 
up in May 2020 under the Future Economy Council (FEC). Chaired by the Minister for National 
Development  and,  the  Minister-in-charge  of  Social  Services  Integration,  and  the  CEO  of  PSA 
International Group CEO, the tTaskforce comprised business leaders with rich experience in key 
areas  such  as  digitalisation  and  connectivity,  and  with  broad  perspectives  on  the  global 
economy.  

•  Singapore:  Singapore  established  a  Future  Economy  Planning  Office  (FEPO)  within  its 
industry 
Industry  (MTI).  FEPO’s  key  roles 

Ministry  of  Trade  and 
transformation maps (ITMs) to secure Singapore’s economy resilience.  

include  developing 

•  Singapore:  The  Centre  for  Strategic  Futures  (CFS)  is  part  of  the  Singapore’s  Prime 
Minister’s  Office.  CSF  is  a  foresight  department  whose  mission  is  to  position  the  Singapore 
government  to  so  that  it  can  navigate  emerging  strategic  challenges  and  harness  potential 
opportunities.  

2.  Collection of key supply chain information from public authorities and industry 

•  US:  ‘Section  232  investigations’  under  the  Trump  Administration  served  to  collect  market 
information from companies and stakeholders on aluminium and steel, on the dominant role of 
China in  the  supply  chain,  and  the  risks  associated with the  US’s  import  dependency  on  China, 
especially for sintered magnets (100%).  

•  US: The Defense Production Act (DPA) allows the US government to obtain information from 

defence industry businesses, including information needed for defence industry studies. 

•  US:  Subpoena  power  of  the  Federal  Trade  Commission  grants  the  Consumer  Protection 
Agency to have authority to order companies to turn over information for research purposes, a 
power it has used to study the privacy practices of broadband providers and start-up acquisitions 
by the five U.S. tech giants, among other areas. 

•  Australia: The  Security Legislation Amendment (Critical Infrastructure Protection) Act 
(SLACIP Act) (2022) amends the Security of Critical Infrastructure Act 2018 (the SOCI Act) to 
build  upon  the  existing  framework  and  uplift  the  security  and  resilience  of  Australia’s  critical 
infrastructure. The SOCI Act contains definitions that outline each of the 11 critical infrastructure 
sectors. Definitions were developed in consultation with industry to ensure clear articulation of 
what constitutes a critical infrastructure asset within each sector. 

•  Japan:  Under  the  Economic  Security  Promotion  Act  (ESPA),  when  business  operators 
(including  foreign  operators)  engaged  in  the  production,  import  or  sale  of  ‘designated  critical 
commodities’ apply to the governmental support programme (including for financial support), the 
operators are required to report data on the production, import, sale, procurement or storage of 
such  commodities  or  related  raw  materials,  and  may  be  subject  to  on-site  inspections. 
Additionally,  the  government  will  screen  ‘critical  equipment’  owned  by  ‘designated  core 
infrastructure  operators’  in  14  ‘core  infrastructure  sectors’:  (i)  electricity;  (ii)  gas,  ;  (iii)  oil;  (iv) 

59 

 
 
 
 
wate;  (v)  telecoms;  (vi)  broadcasting  ;  (vii)  post;  (viii)  finance;  (ix)  credit  cards;  (x)  railways;  (xi) 
land freight; (xii) sea freight; (xiii) aviation; and (xiv) airports.  

•  South  Korea:  South  Korea’s  Framework  Act  on  the  supply  chain  management  for 
economic  security,  announced  in  2022,  establishes  a  presidential  committee  on  economic 
security  and  supply  chain  management  to  act  as  a  control  tower  to  monitor  the  entire  supply 
chain  process,  including  information  collection,  risk  -detection,  risk  prevention  and  risk 
management. The Act furthermore establishes a Supply Chain Stabilisation Fund to be managed 
by KEXIM Bank, Korea’s import/export bank. 

3.  Funding/subsidies, tax incentives, support to investments, R&D etc., in 

specific sectors/values chains 

•  US: The US Energy Department of Energy announced in October 2023 USD 7 billion to 
launch seven regional clean hydrogen hubs (H2Hubs) across the US to accelerate 
the  commercial-scale  deployment  of  low-cost,  clean  hydrogen.  The  funding  derives 
from the Bipartisan Infrastructure Law. 

•  US: The Inflation Reduction Act (2022) makes major federal investments designed 
to:  (i)  reduce  US  greenhouse  gas  emissions  and  combat  climate  change  (USD 370 
billion  estimated  at  US  Congress  level,  but  potentially  higher  as  the  US  budget  is 
uncapped);  (ii)  catalyse  US  domestic  clean  energy,  development,  deployment,  and 
expansion; and (iii) enhance US energy security (over USD 60 billion). Some elements 
of  the  IRA  Act,  notably  with  respect  to  discriminatory  content  and  assembly 
requirements,  have  raised  concerns  amongst  international  partners,  regarding 
distortion of international trade  and investments, adverse impacts  on companies not 
located in the US and its compatibility with World Trade Organization (WTO) rules.  

•  US:  The  Chips  Act  (2022)  is  to  include  a  USD 52  billion  budget  directed  towards 

domestic semiconductor research, design, and manufacturing.  

•  US: The Investment and Infrastructure Jobs Act (2021) makes available USD 1.2 
trillion in investment in transport, power, and broadband infrastructure, with domestic 
preference (‘Buy America’) requirements attached. 

•  US:  The  Facilitating  American-Built  Semiconductors  (FABS)  Act  (2021)  is  to 
provide  semiconductor  investment  tax  credits.  The  bill  was  incorporated  under  the 
Chips Act. 

•  US: The Energy Storage and Tax Incentive and Deployment Act (2019) creates 

an investment tax credit for energy storage.  

•  US:  The  Innovation  and  Competition  Act  creates  a  USD 250  billion  supply  chain 

resiliency and crisis response programme. 

•  US:  The  Export-Import  Bank  offers  medium-  and  long-term  loans  and  loan 
guarantees  available  for  "‘export-oriented  domestic  manufacturing  projects,"’  with  a 
particular focus on sectors such as semiconductors, biotech and biomedical products, 
renewable energy, and energy storage. 

60 

 
 
 
 
•  Canada:  the  The  2023  federal  budget  2023  presented  in  March  2023  earmarks 
CAD 80  billion  (EUR 54  billion)  worth  of  tax  credits  and  infrastructural 
investments  over  11  years  to  encourage  investments  in  low-carbon  electricity, 
manufacturing, and other green industrial activity (the ‘Made in Canada plan’). The 
combined value of the tax credits is CAD 65 billion. These consist of:  

o  The clean electricity investment tax credit, with a total cost of CAD 25.7 
billion (EUR 17.4 billion) over 11 years. The 15% credit targets investments in 
non-emitting  electricity  generation  systems (including  large-scale  hydro-  and 
nuclear  facilities),  abated  natural  gas-fired  electricity  generation,  stationary, 
fossil fuel-free storage systems, as well as electricity transmission equipment. 

o  The clean technology investment tax credit. Announced in the 2022 Fall 
Economic Statement, the 30% tax credit will promote investment in areas like 
wind, solar, small modular nuclear reactors, and geothermal energy. Its 5-year 
is  estimated  at  CAD 6.7  billion  (EUR 4.3  billion).  Companies  cannot  draw  on 
both  the  clean  electricity  investment  tax  credit  and  the  clean  technology 
investment tax credit for the same project.  

o  The  investment  tax  credit  for  clean  hydrogen.  Announced  in  the  2022 
Fall  Economic  Statement,  the  credit  will  vary  between  15%  and  40%  of 
project  capital  costs,  depending  on  the  lifecycle  carbon  intensity  of  the 
produced  hydrogen.  This  credit  is  expected  to  cost  CAD 5.6  billion(EUR 3.8 
billion)  over  the  next  5  years,  and  another  CAD 12.1  billion  (EUR 8.2  billion) 
between 2028-2029 and 2034-2035. 

o  The  carbon  capture,  utilisation  and  storage  investment  tax  credit  is 
has been extended. Announced in the 2022 budget 2022, this update will add 
$CAD 516  million  (EUR 349  million)  to  the  credit’s  CAD 4.1  billion  (EUR 2.8 
billion) total over the next 5 years. 

The  tax  credits  are  complemented  by  a  CAD 15  billion  (EUR 10.1  billion)  Canada 
Growth  Fund.  To  de-risk  private  investment,  the  fund  uses  so-called  ‘contracts  for 
difference’,  which  provide  a  governmental  guarantee  for  the  future  price  of,  for 
example, carbon or hydrogen. The fund will start investing from July 2023 onwards. 

In addition, the budget launches: 

o  an  extension  of  the  reduced  tax  rates  for  zero-emission  technology 

manufacturers;. 

o  a CD 500 million (EUR 338 million) top-up for the Strategic Innovation 
Fund  to  support  the  development  and  application  of  clean  technologies  in 
Canada.  

•  Canada:  On  24 March  2023,  Canada  presented 

the  Critical  Minerals 
Infrastructure Fund – a new fund announced in the 2022 budget that will allocate 
CAD 1.5 billion for energy and transportation projects needed to unlock priority mineral 
deposits.  The  new  fund  will  complement  other  clean  energy  and  transportation 
supports,  such  as  the  Canada  Infrastructure  Bank  and  the  National  Trade  Corridors 
Fund,  as  well  as  other  federal  programmes  that  invest  in  critical  minerals  projects, 

61 

 
 
such as the Strategic Innovation Fund. 

•  UK: In March 2023, the UK reformed the UK Infrastructure Bank and its governance. 
The bank was created in 2021 with a capital of GBP 22 billion to mobilise investments, 
including  in  climate-related  technologies,  to  ensure the  UK  reaches its  2050 climate 
targets. 

•  UK:  In  May  2023,  the  UK  unveiled  its  national  semiconductor  strategy,  which 

includes a plan to redouble efforts in design, research, and advanced chip leadership.   
To  do  this,  the  government  will  invest  up  to  GBP 1  billion  in  the  next  decade  to 
improve access to infrastructure, power more research and development and facilitate 
greater international cooperation, with up to  GBP £200  million over the years 2023-
2025.  

•  UK:  Announced  in  its  Integrated  Review  2023  the  establishment  of  a  new  Task  & 
Finish  Group  on  Critical  Minerals  Resilience  for  UK  industry,  to  support  the 
delivery  of  the  UK  Critical  Minerals  Strategy  and  investigate  vulnerabilities  and 
resilience opportunities across value chains. The group had its first meeting on 20 April 
2023.  

•  UK: In February 2023, the UK government launched ‘CleanTech for UK’, a coalition 
of  leading  clean  tech  entrepreneurs,  investors  and  venture  builders  with  combined 
funds  of  over  GBP 4 billion,  committed  to  working  together  to  supercharge  the 
country’s green economy and innovation for a net-zero emissions future.  

•  UK: 

In  November  2022,  the  government  announced  over  GBP 65  million 
investment  to  help  speed  up  the  development  of  new  green  technologies  , 
backed by the talent and expertise of British business. This pledge will go towards the 
world’s  first  large-scale  industry  transition  programme,  by  the  Climate  Investment 
Funds, to help energy-intensive industries in developing economies including India and 
Indonesia to go green. This comes on top of a further GBP 65.5 million for the Clean 
Energy  Innovation  Facility,  which  provides  grants  to  researchers  and  scientists  to 
accelerate  the  development  of  innovative  clean  energy  technologies  in  developing 
countries.  

•  UK: The British Industry Supercharger, announced in February 2023, is designed to 
reduce  industrial  electricity  prices  for  eligible  energy  intensive  industries    in  Great 
Britain. It aims to ensure the energy costs for key Britain’s strategic energy intensive 
industries are in line with other major economies around the world and to tackle the 
challenge of indirect carbon leakage and the risk of that the policy costs imposed on  
energy  intensive  industries  could  lead  to  the  displacement  of  production,  and 
associated emissions. The annual  value  of the scheme is estimated between around 
£320 to £410 million per year, from which about 300 businesses in sectors including 
steel, metals, chemicals and paper will benefit. 

•  UK: The critical minerals strategy, adopted in July 2022, sets out the government’s 
plans for improving the resilience of critical minerals supply chains and increasing UK 
security of supply. Through this strategy, the UK intends to accelerate growth of the 
UK’s  domestic  capabilities,;  collaborate  with  international  partners,  and;  enhance 
international markets to make them more responsive, transparent, and responsible. 

62 

 
 
•  UK:  The  Subsidy  Control  Act  of  April  2022,  which  replaces  the  EU’s  State  aid 
regime and is mandated by the EU Trade and Cooperation Agreement (TCA), came into 
force  on  4   January  2023.  Under  the  TCA,  the  UK  is  committed  to  establishing  an 
effective system of control of subsidies with a view to ensuring that subsidies are not 
granted  where  they  have  or  could  have  a  material  effect  on  trade  or  investment 
between  the  EU  and  the  UK.  The  new  regime  diverges  significantly  from  the  EU’s 
approach which is centralised and regulates ex-ante basis. The UK regime features a 
new  definition  of  subsidies  and  a  set  of  subsidy  control  principles,  aligned  with  the 
Trade  and Cooperation Agreement,  against which public authorities must self-assess 
the compliance of proposed subsidies via an "‘Assessment of Compliance’. 

•  Australia:  On  25   October  2023,  Australia  announced  an  AUD 2 billion  expansion 
in  critical  minerals  financing,  which  will  solidify  Australia’s  position  as  a  world- 
leading provider, help the transition to net zero, boost the economy and support more 
jobs and opportunities for Australians. Critical minerals, including rare earths, are the 
building  -blocks  for  a  clean  energy  future,  and  are  essential  to  achieving  Australia’s 
energy transition. This significant commitment will double the capacity of the Critical 
Minerals Facility to finance Australian critical minerals mining and processing projects. 
This  expansion  of  the  Critical  Minerals  Facility  takes  the  government’s  value-adding 
investments in Australian resources to AUD 6 billion. 

•  Australia:  Established  in  2021,  Australia’s  Supply  Chain  Resilience  Initiative 
provides  businesses  up  to  AUD 2  million  to  establish  or  scale  up  a  manufacturing 
capability  or  a  related  activity  to  address  supply  chain  vulnerabilities  for  a  critical 
product  or  input  identified  in  the  sovereign  manufacturing  capability  plan.  The  main 
new  policy  tool  is  the  SCRI  grant  (AUD  50  million)  to  improve  access  to  critical 
products in times of crisis. 

•  Australia: 

launched  the 

In  2020,  the  Australian  government 

its  modern 
manufacturing  strategy  with a budget of  AUD 1.3billion.  The  strategy  is  a  key 
feature  of  the  plan  to  harness  Australian  manufacturing  capability  and  to  drive 
Australian  economic  recovery  and  future  resilience.  The  strategy’s  vision  for  the 
strategy  is  for  Australia  to  be  recognised  as  a  high-quality  and  sustainable 
manufacturing nation that helps to deliver a strong, modern and resilient economy for 
all Australians. The Australian modern manufacturing strategy is implemented by the 
national manufacturing priority roadmaps. These road maps for the six priority areas 
were  developed  with  industry  through  taskforces  ion  the  following  domains:medical 
products,  resources  technology  &  critical  minerals  processing,  food  and  beverage, 
defence, and recycling and clean energy. 

• 

India: In May 2023, the Ministry of Electronics and Information Technology launched 
an  ‘India  Semiconductor  Mission’  to  act  as  the  central  entity  coordinating  all 
semiconductors-related  policies  of  the  Indian  government  and  ensure  their  smooth 
implementation.  Some  initiatives  in  place  include  the  Semicon  India  programme, 
which  provides  USD 10  billion  for  100  Indian  companies  in  the  field  of  electronics. 
Since  2022,  the  amended  programme  for  semiconductors  and  display  fab 
ecosystems provides fiscal support of 50% of project cost for all technology nodes 
for  semiconductor  fabs,  fiscal  support  of  50%  of  project  cost  for  display  fabs,  and 
fdiscal  support  of  50%  of  capital  expenditure  for  compound  semiconductors,  silicon 

63 

 
 
• 

• 

photonics, sensor fab and semiconduction facilities. The Digital India campaign also 
aims  to  develop  the  electronics  sector,  making    it  worth  USD   300  billion  by  2026, 
particularly in semiconductor and design, smartphones, IT hardware, and components. 

India:  The  Ministry  of  New  and  Renewable  Energy  in  August  2021  launched  the 
National Hydrogen Mission as a blueprint for India’s transition to a hydrogen-based 
economy, with the goal of reaching a production of 5 million tonnes of green hydrogen 
by 2030. The Indian government is offering special manufacturing zones to produce 
hydrogen, with free energy transmission across state lines and priority connection to 
the grid.  In February 2023, the Indian government also announced an INR 350 billion 
(EUR 4 billion) fund to invest in energy security and green transition (with a focus on 
solar  power  and  green  hydrogen  production),  the  aim  of  being  to  reach  net-zero 
emissions by 2070.  

India:  The  Production  Linked  Incentive  (PLI)  Scheme  (2020),  managed  by  the 
Ministry of Heavy Industries, is a scheme to help develop local supply chains. Although 
the  scheme  invites  foreign  companies  to  set  up  units  in  India,  it  also  aims  to 
encourage  local  companies  to  set  up  or  expand  existing  manufacturing  units  and 
reduce  the  country’s  reliance  on  imports  from  other  countries.  Benefiting  industries 
include  the  battery  ecosystem  (under  the  ‘national  programme  on  advanced 
chemistry cell battery storage), with USD 2.49 billion over 5 years in subsidies to 
develop  50  GWh  of  battery  capacity  in  India.  Beneficiaries  must  ensure  a  60% 
increase  in  domestic  value added  within  5  years.  An  additional  PLI  scheme  was 
launched to boost solar panel  production in India, with a budget of USD 600 million. 
The goal is to attract USD  2.30 billion in private financing and to reach an additional 
10 000 MW of solar electricity production capacity in India. Other schemes  have been 
designed  for  the  Promotion  of  Manufacturing  of  Electronic  Components  and 
Semiconductors  (SPECS)  initiative,  and  more  recently  in  2023  for    IT  Hardware  to 
promote the localisation of components and sub-assemblies of semiconductor design, 
ICT manufacturing, laptops, tablets, and packaging. 

•  China: China has a NEV Purchasing tax exemption (NEV PTE), which is gradually being 
reduced, as follows: in 2023, exemption for 10%, no tax reduction cap; in 2024-2025, 
exemption for 10%, with cap of CNY 30 000; and in 2026-2027, exemption for 10%, 
with cap of CNY 15 000 RMB. All products are eligible for PTE, regardless of whether 
they  are  imported  or  locally  manufactured.  Electric  vehicle  subsidies  apply  only  for 
locally  made  vehicles,  but  includes  products  manufactured  by  EU  joint  ventures  in 
China. 

•  China:  The  14th  Five-Year  Plan  (2021)  included  an  entire  chapter  devoted  to 
boosting  the  digital  sector’s  added  value  to  10%  of  GDP  by  2025.  This  notably 
includes  targeted  investments  in  6G  and  in  cloud  services.  According  to  the  law 
“‘Classified  Catalogue  of  Telecommunications  Services  2015’  law  updated  in  2019, 
only Chinese companies can be licensed to operate cloud services for security reasons 
and to guarantee a protected market for Chinese companies.  

•  China:  The implementation plan for the  development  of  new energy  storage 
technologies  during  the  14th  Five-Year  Plan  period  implements  several  investment 
measures  to  develop  energy  production  and  storage  in  emerging  fields  such  as 
compressed air, hydrogen, battery, and thermal energy, with the goal of reaching self-

64 

 
 
reliance  in  those  fields.  The  goal  is  notably  to  reach  100  GW  of  battery  storage 
capacity by 2030. 

•  China:  The  China  Hydrogen  Alliance  is  a  public  body  charged  with  boosting 
hydrogen  production  in  China.  Hydrogen  has  been  included  as  one  of  China’s  six 
industries of the future and has received important investments as part of the 14th 
Five- Year Plan for a modern energy system.  

•  China:  The  dual  circulation  strategy  (2020)  includes  tax  breaks,  cheaper  utility 
rates, low-interest loans and free or discounted land for chipmakers to: (i) meet higher 
technical  standards;  (ii)  advance  technology  development;  and  (iii)  incentivise 
reshoring and development of local capacity. Even though foreign invested companies 
are in principle eligible for these breaks, the goal is to achieve self-reliant economic 
development to have complete supply chains under Chinese control.  

•  China: Central  government funding is available  for fuel-cell vehicles, up  to CNY  1.7 
billion  (EUR  230  million),  for  local  governments  that  meet  specific  targets.  Local 
governments  will  also  promote  the  roll-out  of  FCVs,  with  the  provinces  of  Beijing, 
Shanghai, Hebei, Inner Mongolia, and Shandong each aiming to have 10 000 FCVs on 
their streets by 2025. 

•  China:  The  government  calls  on  public  and  private  institutions  to  work  towards 
technological innovation in strategic areas. State funds support public universities and 
research  institutes  to  conduct  research,  while  state-owned  and  private  enterprises 
pursue  R&D  in  high-priority  areas.  This  is  often  done  through  national  key  R&D 
programmes  (NKPs).  Since  2016,  the  government  has  announced  66  NKP  projects 
focusing  on  hydrogen  technologies,  with  a  total  estimated  value  between  CNY  1.75 
and CNY 5 billion (EUR 240 and 680 million, respectively). Of these, 14 NKPs have an 
explicit focus on green hydrogen, with a combined estimated value between CNY 400 
million and CNY 1.25 billion (EUR 54 to EU  170 million). 

•  China:  The  government  directly  or  indirectly  funnels  credits  and  investment  into 
‘strategic  sectors’,  e.g.  through    ‘government  guidance  funds’  that  combine  public 
and private investment and through lending by state-owned banks.  

•  Taiwan:  The  5+2  Innovative  Industries  Plan  (2016)  aims  to  upgrade  Taiwan  as 
an industrial global player in key sectors. Implementation focuses on seven industries 
and  projects  including  intelligent  machinery,  green  energy,  biomedicine,  national 
defence and aerospace, new agriculture, circular economy and ‘Asia Silicon Valley’. The 
focus  on  these  areas  is  expected  to  move  Taiwan  forward  from  contract 
manufacturing  to  a  new  commercial  model  centred  on  high-value-added  business, 
services and solutioning. 

•  Taiwan: Last amended in June 2023, the Statute of Industrial Innovation states 
that  companies  with  a  critical  position  in  the  global  supply  chain  may  claim 
investment tax credit (‘ITC’) of 25% on research & development R&D expenditure and 
5% on procurement of machinery/equipment. The applicable period for  utilising such 
ITCs spans 7 years, running from 1  January 2023 to 31  December 2029 (expiry date 
of Statute). 

•  Taiwan:  The  Statue  of  Industrial  Innovation,  last  amended  in  2023,    represents 

65 

 
 
Taiwan’s  largest  investment  tax  reduction  incentive in  history.  The  effective tax  rate 
for  companies  investing  in  the  chips  sector  in  Taiwan  is  1%.  For  companies  with 
technological innovations in semiconductors, electric vehicles, and 5G, the law provides 
a 25% reduction in expenses related to forward-looking R&D, and a 5% reduction in 
the purchases of new machinery or equipment for advanced processes, offset by the 
tax payable in the year of purchase. 

•  Taiwan:  The  electric  truck  subsidy  plan  (2022),  dedicates  TWD   200  million  to 
green  logistics.  Domestic  companies  are  able  to  obtain  subsidies  to  improve  electric 
vehicles  and  develop  greener  dispatching  systems,  with  the  caveat  that  key  project 
components of the project (including batteries and motors) cannot be manufactured in 
China.  

•  Taiwan:  E-bus  subsidy plan  (2023).  A  seven-year  NT$64.3  billion  (US$2.1  billion) 
plan to make all buses and coaches in Taiwan battery electric by 2030. The program 
aims to decarbonize public transport nationwide between 2024 and 2030 as part of 
government efforts to achieve net-zero emissions by 2050. 

•  Taiwan: To tackle Taiwanese semiconductor talents outflow to China, the Ministry of 
Labour  implemented  two  distinct  rules  in  2021  prohibiting  the  advising  or 
intermediation of recruitment for Taiwanese individuals to work in China. The 
rules are not exclusive to engineers but apply to all sectors. The first announcement, in 
April  2021,  prohibits  labour  agencies  from  assisting  in  advertising  recruitment  or 
acting as an intermediary helping personnel going to work in China. Violations of this 
rule can result in fines. The Ministry of Labour further specified regulations, prohibiting 
domestic  advertising  recruitment  or  intermediation  of  personnel  going  to  work  in 
mainland  China  unless  by  a  Taiwanese  company  permitted  by  the  Ministry  of 
Economic  Affairs  to  invest  in  mainland  China  and  with  actual  business  operations 
there. Different penalty amounts are specified based on the number of first-time and 
repeated offences.  

•  Japan: In June 2023, the Japan Investment Corporation, a government-backed  fund 
overseen  by  Japan’s  Ministry  of  Economy,  Trade  and  Industry,  concluded  an 
unprecedented  buyout  offer  worth  USD  6.4  billion  targeting  JSR,  a  leading 
Japanese  listed  company  in  photoresists,  a  technology  needed  in  semiconductors 
value chains. At the time of the offer, the capitalisation of JSR was USD 4.7 billion.  

•  Japan: The green transformation (GX) basic policy (May 2023) is an investment 
roadmap  for 150 trillion yen of public-private financing over the next 10 years. It is 
comprised of two main parts: (i) measures for stable energy supply (energy efficiency, 
renewables,  nuclear,  other  energy  sources  like  hydrogen,  ammonia,  LNG,  batteries, 
carbon recycling); and (ii) ‘growth-oriented’ carbon pricing schemes. It will introduce a 
carbon  tax  by  2028,  starting  with  a  voluntary  emissions  trading  scheme  introduced 
starting  in  2026.  The  GX  plan  will  drive  forward  investment  in:  renewables,  grid 
flexibility,  energy  efficiency  and  the  circular  economy,  supported  by  an  upcoming 
sovereign bond to stimulate private-sector investment. 

•  Japan:  Partial  amendment  of  the  Japan  Bank  for  International  Cooperation 
Act (April 2023) focused on: (i) enhancement of supply chain resilience to contribute 
towards  maintaining  and  improving  the  international  competitiveness  of  Japanese 

66 

 
 
industries; (ii) assistance for Japanese companies, including start-ups, in taking further 
taking  risks  with  expectations  of  such  sectors  such  as  digitalisation  and  green 
initiatives growing; and (iii)  participation in the international support for the recovery 
of Ukraine. 

•  Japan: In October 2022, METI (the Ministry of Economy, Trade, and Industry) launched 
a new Resource Autonomous Economy Strategy Planning Office and new study group 
to  design  a  pro-growth  economy  with  circular economy  and  resource  autonomy.  The 
study group will explore ways to encourage industries to use circular resources against 
the backdrop of limited domestic resources, increasing global demand for critical raw 
materials,  unexpected  supply  disruptions  and  economic  fallout  from  the 
weakening yen. 

•  Japan:  In  September  2022,  METI  approved  production  plans  for  advanced  memory 
semiconductors  in  Hiroshima  by  Micro  Memory  Japan  and  Micron  Technology,  for 
thewith  a  maximum  subsidy  in  the  maximum  amount  of  JPY 46.5 bn.  The  ministry 
emphasised  that  this  would  contribute  to  further  strengthening  of  Japan-US 
cooperation on semiconductors since Micron conducts development and production in 
both the U.S. and Japan. 

•  Japan: Under the Economic Security Promotion Act (ESPA) (May 2022), specific 
companies supplying designated critical  commodities can receive financial  and fiscal 
support over  the medium to long term. Subsidies under ESPA will aim to reduce risk 
for  private  operators  and  encourage  them  to  enter  currently  low-margin  /  high-risk 
businesses and R&D. Examples of measures under the ESPA include: 

•  A  package  worth  approx.  JPY  800  billion  (EUR 6.15  billion)  to  support  the  domestic 
semiconductor  industry,  including  the  construction  of  a  chip  plant  in  Kumamoto 
Prefecture  by  a  joint  venture  of  Taiwan  Semiconductor  Manufacturing  Co.  (TSMC), 
Sony and Denso.  

o  A new economic stimulus package to support the development of production 
infrastructure,  diversification  of  supply  sources  and  development  of 
alternative  commodities.  In  April/August  2023,  the  Japanese  government  of 
Japan designated 20 critical and emerging technologies (maritime, aerospace, 
cyberspace, biotechnology, semiconductors, robotics and quantum, hypersonic, 
cybersecurity  utilising  AI,  drones  and  unmanned  aerial  vehicles,  next- 
generation  furnaces  and  fusion  furnaces).  Selected  projects  are  expected  to 
begin  by  Q3/4  of  2023  and  will  be  funded  for  up  to  5  years  (max.  of  10 
years). In this context, already  JPY 500 bn (EUR 3.2 bn) has been allocated to 
the key technologies for economic security.  

o  Re-introduction of secret patents. The recent Basic Policy Guidelines identified 
25  technologies  to  be  covered,  including  technologies  related  to  aircrafts, 
unmanned  aerial  vehicles,  guided  weapons,  jet  engines,  solid  fuel  rocket 
engines,  weapons  with  electromagnetic 
laser  weapons, 
electromagnetic pulse munitions, defence against aircraft and guided missiles, 
telecommunications  jamming,  uranium  and  plutonium  isotope  separation, 
decomposition  and  reprocessing  of  nuclear  fuel,  nuclear  devices,  etc.  The 
Implementation will start in 2024. 

launchers, 

67 

 
 
•  Japan: 2022 saw the establishment of RAPIDUS, a corporation in which Japan’s major 
chips manufacturers are participating to establish mass production of next-generation 
semiconductors. 

•  Japan:  The  State-owned  Japan  Oil,  Gas  and  Metals  National  Corporation 
technological  development  by  Japanese 
(JOGMEC)  supports  exploration  and 
companies  through  equity  capital  and  liability  guarantees.  JOGMEC  invests  in  rare 
earth overseas projects to diversify supply involving Japanese companies to diversify 
supply.  Its  purpose,  scope,  structure,  and  obligations  are  set  out  in  the  JOGMEC 
ACT126. 

•  Japan:  Under  the  planned  revision  of  the  JOGMEC  ACT,  JOGMEC  is  to  strengthen 
financial  support  for  Japanese  businesses’  rare  earths  exploration  and  refining 
operations. The revised legislation is reported to: (i) increase the ceiling of JOGMEC’s 
loan and investment ratio by expanding government’s support  through JOGMEC from 
the current level of 50% to 75% of investment in projects; (ii) allow JOGMEC to invest 
in  or  grant  debt  guarantees  to  domestic  Japanese  mineral-refining  operations  (at 
present  JOGMEC  can  only  support  refining  operations  overseas,  in  practice in  China); 
and  (iii)  allow  JOGMEC  to  actively  support  overseas  mining  and  projects  involving 
Japanese companies (risk money support).  

•  South  Korea:  In  August  2023,  the  Korea  Financial  Services  Commission  (FSC) 
announced  a  set  of  measures  aimed  at  boosting  support  for  the  export  industry  by 
providing 23 trillion South Korean won (EUR 16.4 billion). These export credits will be 
focused on 20 strategic export sectors, which encompass the  ‘12 new export growth 
engines’  (secondary  batteries,  electric  vehicles,  high-value-added  shipbuilding,  green 
industries,  edu-tech,  agro  and  fishery  food  products,  smart  farming,  ICT  services, 
creative contents, pharmaceuticals/medical devices, and cosmetics), as well as Korea’s 
eight backbone industries (chips, displays, steels, machinery, petro-chemicals, nuclear 
power plants, national defence, overseas construction, environmental industry). 

•  South Korea: In April 2023, President Yoon Suk Yeol announced that the government 
will invest 20 trillion won (USD 15.1 billion) in the electric vehicle battery industry by 
2030 to turn it into a key component of the country’s national security and strategic 
assets, along with semiconductors, and to secure a significant lead over rivals. More 
specifically, the government will support large research projects to develop solid-state 
batteries, while top battery cell makers ― LG Energy Solution, Samsung SDI and SK ― 
plan  to  produce  prototypes  of  solid-state  batteries  domestically  and  then  mass 
produce them overseas. 

•  South Korea: In April 2023, the Ministry of Economy and Finance announced that the 
government will invest 4.5 trillion won (USD 3.5 billion) and provide support measures, 
including tax benefits, to encourage private corporations to invest 150 trillion won into 
chips, displays and batteries. The government will also engage in strategic cooperation 
with countries with advanced technologies in these fields.    

•  South Korea: South Korea passed on 30  March 2023 its own ‘K-Chips Act’ that gives 
specific  advantages  to Korean  chipmakers,  with  tax  breaks  to increase  production  in 

126 300052290.pdf (jogmec.go.jp) 

68 

 
 
 
Korea. The goal is to encourage them to spend approximately a combined about EUR 
 379  billion  by  2030  to  facilitate  South  Korea  becoming  a  global  powerhouse  in 
memory and non-memory chips. Large companies will get receive a tax credit of 15%, 
while SMEs’ capital expenditure will get a tax break of 25%. Any additional investment 
in  chipmaking  in  2023  will  receive  another  10%  tax  break.  In  addition,  the  Act 
streamlines  administrative  procedures  for  chipmakers.  Samsung  announced  in  April 
2023 that it would invest some EUR 212 billion  into a new massive chip cluster with 
five advanced chip-manufacturing plants around the Korean city of Yongin by 2042. 
SK  Hynix  is  also  planning  to  establish  a  semiconductor  cluster  in  the  same  city, 
investing  some  EUR  85  billion.  Semiconductors  are  a  key  export  product  for  South 
Korea, accounting for about 20% of its exports in 2022. 

•  South  Korea:  South  Korea  issued  in  February  2022  the  Special  Act  on 
Strengthening  and  Protecting  Competitiveness  of  National  High-Tech 
Strategic  Industries  with  the  goal  to  reduce  the  administrative  burden,  speed  up 
the 
relevant 
semiconductors sector and beyond. 

licensing  processes,  and  subsidise 

training  programmes 

in 

•  South Korea: In 2022 government started to apply a higher tax credit rate of 15% on 
facility  investment in  the chip  industry  for  conglomerates,  up  from  8%.  The  rate  for 
small  and  medium-sized  businesses  also  rose  from  16%  to  25  %.  In  2023,  the 
government  started  applying  an  additional  tax  credit  rate  of  10%  on  the  amount  of 
investment,  increasing  year  on  year.  The  proposed  plan  could  help  the  strategic 
industries,  including  rechargeable  battery  makers,  save  3.65  trillion  won  (USD 2.85 
billion) in taxes in 2024. 

•  South Korea: In February 2022, the national government adopted a new technology 
protection  strategy  to  harmonise  the  different  protection measures  taken  by various 
national ministries to avoid leakages of core technologies. To give special funding to 
the technologies that are considered strategic by the government, a Special Taxation 
Act has been in effect since 01 January 2023. The Act sets out a precise list of 150 
strategic  technologies  for  which  Korea-based  manufacturing  companies  can  receive 
tax credits to the tune of 937.6 billion won (USD 711.2 million) in 2023. In April 2023, 
the Ministry of Industry announced that the list would be updated to include 50 extra 
technologies, bringing the list to 200 items.  

•  Singapore:  Singapore’s  research  priorities  and  funding  have  been  detailed  in  the 
Research  Innovation  Entrepreneurship  Programme  (RIE2025).  RIE2025  gives 
priority  to  health,  sustainability,  digital  economy,  advanced  manufacturing,  and 
security. RIE strategies respond to new technological and societal driving forces.  

•  Singapore:  In  February  2021,  Singapore  announced  the  establishment  of  the 
Southeast  Asia  Manufacturing  Alliances  (SMA),  a  tripartite  alliance  (public-
private) to secure supply chain resilience in the region. Grants up to SGD  1,.5 million 
are provided by the Economic Development Board of Singapore (the Ministry of Trade 
and 
Industry’s  economic  development  body),  while  Enterprise  Singapore  (the 
government  agency  for  business  development)  provides  matching  events  and  a 
platform.  A  network  of  private  sector  ‘strategic  partners’  offer  preferential  services 
(reduced costs on leasing and logistics) for businesses that join the alliance.  

69 

 
 
•  Singapore: the “30 by 30” policy– whereby Singapore intends to be able to produce 
30  %  of  its  nutritional  needs  by  2030  and  enhanced  its  food  security,  a  major 
endeavour to tackle food security issues. 

•  Singapore:  the  Enterprise  Innovation  Scheme  (EIS)  enhances  tax  deductions  for 
businesses  on  activities  that  boost  innovation,  such  as  R&D  conducted  in  Singapore, 
registration  of  intellectual  property,  and  innovation  carried  out  with  Institutes  of 
Technical Education. 

4.  Public procurement mMeasures used in sSupport of domestic production 

capacities, rResilience, and sSecurity of Supplysupply, etc. 

•  US: Inflation Reduction Act (2022) includes incentives for public procurements of significant 
size  to  ‘Buy  America(n)’  programmes  (support  for  US  Postal  Service  to  ‘electrify’  its  fleet  with 
subsidies)  and  the  implementation  of  the  Defence  Production  Act  (USD 500 m  earmarked  for 
critical minerals manufacturing) without foreign bidders allowed. 

•  US: ‘Buy American’ rules for procurement (2021) not covered under the WTO Agreement on 
Government  Procurement.  The  rules  apply  to  all  U.S.  federal  government  agency  purchases  or 
federally financed purchases of goods valued over the micro-purchase threshold (USD 10 000). 
To be considered as being produced in the U.S., goods must be manufactured in the U.S. and at 
least 55% of the cost of their components must come from the U.S. Waivers can be granted for 
the public  interest,  non-availability  or if  the  cost  of U.S.  products is unreasonable  compared to 
equivalent  foreign  products.  IT  and  ‘commercial  off-the-shelf’  products  are  exempt.  Impact  on 
the US’s international commitments under the Government Procurement Agreement (GPA) is not 
yet clear. 

•  Canada:  In  the  2023  federal  budget  2023,  the  Canadian  government  announced  the  that  it 
intended to introduce new reciprocity requirements in federal public procurement; these 
would  grant  foreign  companies  an  equivalent  access  to  Canadian  federal  public  procurement 
than equivalent to that granted to Canadian companies in the respective third countries. Similar 
reciprocity  conditions will be  required for foreign companies’ access to Canadian tax credits as 
well. 

• 

• 

India:  India’s  unified  licence  scheme  blocks  any  foreign  company  from  receiving  a  licence  to 
exploit a 5G frequency. The goal is to foster the development of local companies in the sector. 

India: India’s 2017 ‘Preference to Make in India’ Order gives preference to local production 
of  goods  and  services  for  a  wide  range  of  products  on  public procurement markets.  The Order 
introduces classes of suppliers (Class I, II and non-local suppliers) depending on how much local 
content those suppliers use (above 50%, 50%> and 20%> respectively). Sensitive sectors such 
as  railways  or  defence  require  the  supplier  to be  Class  I  or  II  for  a  bid  to  be  eligible. Greatest 
procurement  priority  is  allocated  to  tender  submissions  with  the  highest  percentage  of  local 
content, and the government may mandate technology transfers.  

•  China:  The  Eastern  data,  Western  computing  plan  (2022)  aims  to  develop  the  digital 
industry in China by constructing eight computing hubs and 10 data centre clusters in key areas 
in  eastern  and  western  China.  The  plan  and  is  led  by  the  Ministry  of  Industry  and  Information 

70 

 
 
 
 
Technology.  The  goal  of  the  plan  is  to  create  the  required  infrastructure  to  allow  enable  the 
development  of  Chinese  industries  in  the  fields  of  iInternet  of  tThings,  AI,  big  data,  and  cloud 
computing while relying on Chinese infrastructure. 

•  China:  China’s  New  Infrastructure  plan  (2020)  unlocked  USD 1.4  trillion  on  a  digital 
infrastructure  public  spending  programme  in  the  sectors  of  5G  networks,  industrial  internet, 
inter-city transportation and rail systems, data centres, AI, ultra-high voltage power transmission, 
and new-energy vehicle charging stations. The goal is to stimulate the development of strategic 
sectors  for  the  Chinese  economy  and  help  the  rise  of  Chinese  ‘champions’  in  those  industries. 
This  effort  has  been  compounded  by  similar  infrastructure  plans  developed  by  25  of  China’s 
provinces.  

•  China:  China  applies  a  ‘Buy  National’  policy,  with  a  few  exceptions.  Under  its  Government 
Procurement  Law,  China  applies  de  facto  market  access  barriers,  including  the  ‘buy  national 
policy”’  and  “‘indigenous  innovation,”’  which  give  preferential  treatment  to  goods  and  services 
developed locally. In theory, foreign-invested companies in China are to be treated like domestic 
companies, but in practice domestic companies are preferred.  

•  China:  The  medium-  and  long-term  national  plan  for  science  and  technology  development 
directs  government  agencies  to  buy  products  listed  in  certain  procurement  catalogues,  which 
include only qualified indigenous innovation products (with few exceptions). 

•  Japan:  Under  the  Economic  Security  Promotion  Act  (ESPA)  (2022),  the  government 
designates designated critical, core and sensitive infrastructures in 14 sectors including aviation, 
railways,  gas,    and  oil  etc.  If  a  business  operator  in  designated  infrastructure  is  selected  as  a 
core/ important operator by ministers in charge (not all operators), the government will have the 
right  to  pre-screen  any  projects  in  those  sectors,  recommend  remedies  and  potentially  order 
operators to change suppliers or abandon transactions.  

5.  Stockpiling of critical inputs 

•  US:  The  U.S.  Departments  of  Energy  (DoE)  and  Department  of  Defense  (DoD),  and  the 
Department of State (DoS)  signed a memorandum of agreement (MOA) in February 2022 that 
sets the  foundation  for  a  critical minerals  stockpile  to  support the  U.S’s.  transition to  clean 
energy  and  national  security  needs.  The  DoD,  which  manages  the  national  defence  stockpile 
(NDS),  currently  stockpiles  critical  minerals  for  national  security  purposes.  The  MOA  creates  a 
new, inter-agency process for stockpiling minerals that enable vital clean energy technologies. 

•  UK: The UK is creating strategic reserves of water treatment chemicals,: monitoring stockpiles 

of chemicals and exploring stockpile requirements.  

•  Australia: The Australian government committed more than $AUD 8 million in the 2023-2024 
federal  bBudget  to  establishing  a  national  emergency  management  stockpile  (NEMS) 
capability  to  provide  rapid  access  to  critical  emergency  management  goods  and  services  to 
augment state and territory emergency response and immediate relief capabilities. The NEMS is 
comprised of three parts: (i) a national stockpile of Australian government-owned disaster goods 
and  services,  and  a  seasonal  strategic  reserve  of  single-use  consumables;  (ii)  a  standing  offer 

71 

 
 
 
 
panel to facilitate the procurement, management and deployment of critical goods and services 
in a crisis; and (iii) memoranda of understanding with other Australian government humanitarian 
and crisis response capabilities. The pPanel is expected to be in operation by 1 July 2024 and will 
run for 3 years, with options for two 1-year extensions. The panel will ensure a continuous and 
reliable  national  stockpile  of  essential  goods  and  services  like  emergency  shelters,  generators 
and  water  purification  systems,  to  augment  state  and  territory  emergency  responses  to 
communities impacted by disasters. 

•  Australia:  Australia  maintains  a  national  medicine  stockpile  storing  medications,  vaccines, 
antidotes,  and  personal  protective  equipment  to  be used  in  case  of  supply  chain  disruptions  in 
the health sector.  

•  China: It is estimated that China stockpiles 1.5 million to 2 million  tonnes of copper, 800 000-
900 000  tonnes  of  aluminium,  and  250 000-400 000  tonnes  of  zinc.  China  is  also  believed  to 
have around 7 000 tonnes of cobalt, a key metal used in battery manufacturing.  

•  China: The government promotes the consolidation of Chinese companies into a handful of big 
groups  per  sector,  often  state-owned  or  state-  led.  This  is  meant  to  increase  their  bargaining 
power on international markets and to modernise the sector.    

•  Japan:  The  Japan  Oil  Gas,  Metals  National  Corporation  (JOGMEC)  operates  a  national 
stockpiling  system  of  rare  metals  to  secure  long-term  raw  materials  supply.  Stockpiles  are 
sufficient to meet 60 to 180 days’ demand. In addition, under the planned revision of the Mining 
Act,  Japan  is  to  restrict  access  to  rare  -earth  resources  in  Japan’s  exclusive  economic  zone 
(offshore  deposits).  JOGMEC  emphasised  the  importance  of  confidentiality  in  the 
stockpiling  policy  since  it  is  a  matter  of  national/economic/resource  security.  This  acts 
also as a deterrent against potential coercive practices by third countries, especially in the case 
of CRM  critical raw materials  over-dependencies on concentrated sources/limited  suppliers. The 
less public the information is, the more difficult a potential economic coercion becomes. (Japan 
learnt a bitter lesson on rare earths in 2010). JOGMEC’s stockpiling plan is classified  as it 
includes information  on  selection  of  critical  raw materials (CRM),  actual  quantities  required  for 
each CRM, how / when to purchase, release CRMs and conduct test exercises, the exact location 
of  stockpiling  facilities  and  how  stocks  are  managed  etc.  The  JOGMEC  Act  also  includes 
confidentiality obligations for companies participating in the stockpiling. 

•  Japan: As part of the its Economic Security Promotion Act (ESPA), the Japanese government of 
Japan  announced  the  creation  of  a  ‘strategic  surplus  LNG’  system  to  ensure  that  LNG  is 
secured  on  a  sustainable  basis  by  utilising  the  procurement  capabilities  of  companies.  The 
surplus LNG secured will be sold on overseas markets in normal times and to domestic operators 
in times of emergency. 

•  South Korea: South Korea has a state-run reserve management and stockpiling of critical raw 
materials  at  the  national  level.  Under  the  Ministry  of  Trade,  Industry  and  Energy  (MoTIE),  the 
state-owned KOMIR (Korea Mine Rehabilitation and Mineral Resources Corporation), launched in 
September  2021,  implements  the  government’s  strategies  and  policies  pertinent  to  the  raw 
materials, and. It also promotes foreign investment in overseas resource development. Moreover, 
Under  the  strategy  on  critical  minerals  released  in  February  2023,  the  stockpile  of  critical 
minerals  is  has  been  increased  in  order  to  suffice  for  100  days,  up  from  the  current  54. 
Moreover, the government has allocated the budget of KRW 28.3 billion (20 million euro) for the 
stockpiling of cobalt in 2023. 

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•  Singapore: Particularly in the field of food, the government can use its discretionary power to 
ensure a minimum quantity of private stockpiles, which need to be maintained for a stipulated 
period  (such  as  the  Rice  Stockpile  Scheme).  Given  its  exposure  to  imports  from  Malaysia  and 
Indonesia, Singapore has stockpiles of food to prevent crises. To affect negotiation with overseas 
suppliers,  the  presence  of  the  stockpiles  is  known  but  not  the  actual  numbers  to  affect  their 
negotiation  with  overseas  suppliers.  Singapore  maintains  a  national  stockpile  of  two  other 
essential  items,  such  as  granite  used  in construction,  and  Personal  Protective  Equipment (PPE), 
including masks, drugs, and medical supplies, following outbreaks of SARS in 2003 and H1N1 in 
2009. 

6.  Prioritisation of supplies of goods and services 

•  US:  The  Inflation  Reduction  Act  has  domestic  content  requirements  (clean  electricity 
production credit, electricity produced from certain renewable resources credit, and energy credit) 
as  well  as  local  final  assembly  requirements  (clean  vehicle  credit).  These  can  be  seen  as  an 
heavily  financial  incentive  to  change  the  composition  of  the  renewable  energy,  battery  and 
automotive supply  chain, and  to  expand production and assembly in the US for the US market 
and  beyond  on  US  soil,  resulting  from  the  improving  economies  of  scale  generated  by  US 
production and the proximity of the electric vehicle supply chain. 

•  US: The Defence Production Act gives the US President the authority to expedite and expand 
the  supply  of  materials  and  services  from  the  U.S.  industrial  base  needed  to  promote  the 
national defence. DPA authorities may be used to: 

▪ 

▪ 

▪ 

▪ 

▪ 

require acceptance and preferential performance of contracts and orders;. 

provide  financial  incentives  and  assistance  for  U.S.  industry  to  expand  productive  capacity 
and supply needed for national defence purposes;. 

provide  antitrust  protection  for  businesses  to  cooperate  in  planning  and  operations  for 
national defence purposes, including homeland security;. 

The  DPA  provides  authority  to  obtain  information  from  businesses,  including  information 
needed for industry studies.; 

The  US  has  established  a  DPA  programme to  provide  loans,  grants,  and  other  financing  to 
build and expand the health resources industrial base. 

•  UK:  The  UK  announced  in  its  Integrated  Review  2023  that  it  is  working  on  a  national  supply 
cChains  and  import  strategy  to  support  specific  government  and  business  action  to  strengthen 
the country’s resilience in critical sectors.  

•  UK: Via  the UK Make programme, the UK is encouraging development of domestic production 

capacities for personal protective equipment within the health sector.  

• 

India: The Ministry of New & Renewable Energy issued in January 2019 an ‘Approved models 
and  manufacturers  of  solar  photovoltaic  modules’  (Requirements  for  compulsory 
registration) complying with the Bureau of Indian Standards and. At the same time, it published a 
list  called  entitled  the  ‘Approved  list  of  models  and  manufacturers’  (ALMM).  The  list  of 

73 

 
 
 
 
manufacturers was recently updated in 2023, with an enlisted capacity of 22 389 MW and more 
than 70 manufacturers. The module models on the list are only eligible for use in open access 
and  net  metering  projects  along  with  government  projects,  government-assisted  projects,  and 
projects under various  government  schemes  and programmes.  Although  the  implementation  of 
ALMM  has  been  deferred  by  until  2024,  ALMM  protects  the  interests  of  Indian  domestic 
manufacturers. 

•  China:  The  dual  circulation  strategy  (2020)  calls  for  relying  principally  on  China’s  large 
domestic market and leveraging/building its strengths, including comprehensive and deep supply 
chains. Economic exchanges with the rest of the world are also encouraged, not discouraged, but 
‘domestic  circulation’  must  be  able  to  function  autonomously  in  case  of  problems  with  foreign 
supplies. 

•  South  Korea:  The  government  announced  its  renewed  strategy  on  critical  minerals  for 
businesses on 27 February 2023. The aim is to help mitigate Korea’s reliance on imports from a 
selected  certain  few  countries  and  maximise  utilisation  of  domestic  mineral  resources, 
contributing  to  supply  chain  stabilisation.  Under  the  new  strategy,  33  critical  minerals  with  a 
bearing on economic security are to be selected with regard to economic security; and out of the 
33, 10 strategic critical minerals needed for stabilising the supply chain of chips and secondary 
batteries will be prioritised for intensive management. For the 10 strategic critical minerals, the 
government plans to cut by 2030 its dependency on imports from the current 80% to 50%; and 
to increase recycling from the current 2% to 20%. Moreover, to provide strategic minerals for the 
industry, KOMIR is currently carrying out 18 overseas projects in different stages of development, 
which include projects relating to copper, cobalt, manganese and zinc project. 

•  Taiwan:  Since  2013,  Taiwan  has  developed  its  offshore  wind  generation  capability  through 
public auctions. Since 2018, local content requirements have been obligatory for successful bids. 
The latest rules and guidelines, adopted on 15 December 2023, maintain these requirements. 

7.  Trade, and investment measures: tariffs, export restriction, anti-coercion 

measures, standards, etc. 

•  US:  On  4 May  2023,  the  White  House  introduced  a  standards  strategy  for  critical  and 
emerging  technologies  (CET),  supplementing  the  2021  national  standards  strategy.  The  CET 
includes  eight  strategic  technologies:  (i)  communication  &  networking;  (ii)  semiconductors  & 
microelectronics;  (iii)  AI  &  machine  learning;  (iv)  biotechnologies;  (v)  positioning,  navigation  & 
timing  services;  (vi)  digital  identity  infrastructure  &  distributed  ledger  technologies;  (vii)  clean 
energy generation & storage; and (viii)  quantum information technologies. The strategy outlines 
eight  measures  to  strengthen  US  standard  development  organisations  (SDOs)  through  2024 
federal  budget  funding,  public-private  partnerships,  workforce  upskilling,  and  collaboration  with 
international partners. 

•  US:  The  ‘Section  232  investigation’  was  effectively  concluded  on  21 September  2022.  The 
White  House  announced  that  imports  of  neodymium-iron-boron  (NdFeB)  permanent  magnets 
implement  a  series  of 
threaten  national  security  and  that  the  Administration  would 
recommendations  proposed  in  the  Department  of  Commerce  report.  The  Department  of 
Commerce,  however,  rejected  the  imposition  of  any  tariffs  or  restrictions  on  imports  since  ‘the 

74 

 
 
 
 
current severe lack of domestic production capability throughout the magnet supply chain, tariffs 
and quotas would have an adverse impact on consuming sectors and might incentivise businesses 
to  move  operations  incorporating  NdFeB magnets  offshore.’  The  Department  of  Commerce  also 
argued that the national security of U.S. allies and partners was essential to U.S. national security, 
partially basing its decision on Australia, Japan, and the EU’s reliance on rare earth minerals or 
oxides.  However,  the  report  adds,  the  decision  whether  or  not  to  impose  tariffs  or  other  import 
restrictions may be imposed later is left open to re-evaluation as the U.S. develops its domestic 
production capacity. 

•  US: Following the Uyghur Forced Labor Prevent Act (also known as the ‘UFLPA’), which went 
into effect in June 2022), US Customs and Border Protection officials have seized around USD 1.3 
billion worth of imports. US Customs officials have confirmed that import detentions connected to 
the law surged 63% from October 2022 through early January 2023, with 2, 600 seizures worth 
USD 806 million. The majority of the detained imports were solar panels. However, as industry is 
figuring out what can be shipped and what violates the law, the number of US seizures may drop.  

•  US: The Export Control Reform Act of 2018 allows the US government to enact controls on 
exports,  re-exports,  and  transfers  of  emerging  and  foundational  technologies  if  they  could  be 
used  to  threaten  the  US  national  security  of  the  US  or  if  they  give  a  qualitative  military  or 
intelligence advantage to the US. Some 14 emerging technologies are identified, including biotech, 
AI, and semiconductors. 

•  US: The Defense Production Act (DPA) sets up the Committee on Foreign Investment in the 
United  States  (CFIUS).  The  committee  can  review  foreign  investments  and  real  estate 
transactions  by  foreign  persons  in  the  US  in  case  those  investments  could  present  a  risk  to 
national  security.  It  can  also  impose  conditions  on  such  acquisitions  or  refer  the  case  to  the 
President for decision. Australia, Canada, New Zealand, and the UK are exempted from review by 
CFIUS, but the EU is not.  

•  UK: In March 2023, the UK launched a new economic deterrence initiative (EDI) to boost its 
diplomatic and economic tools to respond to and deter hostile acts. With up to GBP 50 million of 
funding  over  2  years,  the  initiative  will  improve  sanctions  implementation  and  enforcement. 
Currently, there is an ongoing review of export controls and emerging technologies (quantum, AI, 
biotech  and  semiconductors)  due  for  completion  by  the  end-2023,  with  the  aim  to  identify 
potential gaps in the system. On outbound investments, the UK is working to develop the evidence 
base  to  enable  it  to  assess  the  potential  national  security  risks  posed  by  outward  direct 
investment  (ODI).  This  work  will  inform  how  the  UK  can  best  calibrate  its  actions  to  respond 
effectively to these risks. 

•  UK: National Security and Investment Act (NSIA) (2021). The NSIA sets up an FDI screening 
regime  with  mandatory  notifications  to  the  government  for  acquisitions  in  17  ‘most  sensitive’ 
economic  sectors,  including  defence,  communications,  and  energy.  The  government  can  review 
and potentially block acquisitions if they risk undermining the UK’s national security. 

•  Australia:  Reforms  to  the  Foreign  Investment  Review  Board  (FIRB)  in  2020  introduced  a 
mandatory  notification  procedure  for  acquisitions  connected  to  ‘national  security  business’  or 
‘national security land’ or linked to critical infrastructure. Critical infrastructure covers 15 sectors 
including  electricity,  gas,  water,  ports,  healthcare,  and  cloud  services  among  others.  The 
government can order divestment or prohibit the acquisition if it finds that it could present risks 
to  national  security.  These  reforms  include  measures  to  strengthen  the  existing  frameworkby 
means  of  an  enhanced  national  security  review  of  sensitive  acquisitions,  extra  powers  and 

75 

 
 
resources to ensure foreign investors comply with the terms of their approval, and amendments 
to streamline investment in non-sensitive areas. As of January 2021, with the implementation of 
an  updated  foreign  investment  regime,  the  government’s  focus  has  firmly  been  on  national 
security  and  compliance.  Generally,  the  Treasurer  approves  the  vast  majority  of  applications. 
However, FIRB has been increasingly willing to use conditions and undertakings as a mechanism 
to increase the  government’s oversight  of more complex  or sensitive investments. Undertakings 
required from FIRB may include matters relating to governance, location of senior management, 
listing requirements, market competition and pricing of goods and services (e.g. that all off-take 
arrangements must be on arm’s-length terms) and other industry-specific matters. FIRB has also 
issued a set of standard tax conditions that apply to those foreign investments that pose a risk to 
Australia’s revenue. 

India: In October 2023, India launched a new online authorisation system for imports of laptops, 
tablets,  and  personal  computers  to  monitor  the  quantity  of  imports  and  where  they  originate 
from.  The  government  may  ask  laptop,  server  and  other  IT  hardware  importers  to  provide  an 
international certification attesting that their product is from a trusted source before allowing it to 
be imported a licence-free import of it. 

India:  The  Department  of  Science  and  Technology  has  launched  a  ‘grand  challenge’  on  the 
development  of  standards  for  electric  vehicle  charging  infrastructure  to  help  develop  the  local 
industry. 

India: With effect from April 2022, the Indian government has imposed a basic customs duty on 
the import of solar PV photovoltaic cells and solar PV modules at of 25% and 40% on the import 
ofrespectively. The aim is solar PV modules to reduce the influx of imported PV cells and modules 
and increase the domestic manufacturing. 

India: India revised its FDI policy in 2020 to make foreign acquisitions of Indian companies more 
difficult. Notably, companies from countries that share a border with India (China being the target 
here)  must  undergo  a  security  analysis  before  an  acquisition  can  go  through.  However,  the 
government  may  decide  to  scrutinise  acquisitions  by  any  foreign  entity.  The  Indian  government 
has published for guidance a list of sensitive sectors in which it is likely to scrutinise acquisitions. 
Sectors include broadcasting, telecommunication, satellites – establishment and operation, private 
security  agencies, defence, civil  aviation and mining and mineral  separation of titanium-bearing 
minerals and ores. 

• 

• 

• 

• 

•  China: The Export Control Law (2020) is China’s primary legislation for restricting exports of 
goods  and  technology  for  national  security  and  public  policy  reasons.  In  addition  to  national 
security,  it  is  suspected  that  China  wields  export  controls  to  ensure  preferential  access  of  its 
domestic industry to inputs and to safeguard or establish technological supremacy of its industry, 
as well as for coercion of foreign governments, voters and businesses. Export controls of concern 
are  numerous,  but  include  those  on  rare  earths,  urea,  gallium  and  germanium,  drones  and 
graphite. China’s export controls are broad, often vaguely formulated, lack transparency and are 
poorly justified. 

•  China: The Catalogue of Technologies Restricted and Prohibited for Export (2002), which 
does not fall under the Export Control Law, additionally restricts the export of technologies. The 
legal basis for adding technology to the catalogue is both broad and vague, ranging from national 
security to compliance with any Chinese legislation. It is believed that the primary purpose of the 
export  controls  on  technologies  on  this  catalogue  is  to  safeguard  China’s  technological  edge  in 
industries  where  it  is  dominant.  It  includes,  notably,  technologies  for  processing  rare  earths, 

76 

 
 
including  the  production  of  rare-earth  magnets,  a  key  input  to  the  green  and  digital  transitions 
used in electric vehicles, robotics and wind turbines.  

•  China: Stringent data protection rules such as the Data Security Law, Personal Information 
Protection Law (PIPL) and the Measures for Security Assessment for Cross-Border Data 
Transfers restrict the flow of data out of China. 

•  Japan:  In  June  2023,  the  Government  of  Japan  expanded  the  sectoral  coverage  of  its  inbound 
FDI  screening  to  cover  all  11  materials  designated as  “specified  critical  materials  (SCMs)  under 
the Economic Security Promotion Act (ESPA). 

•  South  Korea:  Promotion  of  Tech  acquisition  through  overseas  mergers  &  acquisitions  is 
promoted  for  areas  where  it  is  difficult  to  secure  ‘core  tech’  among  essential  items  in  the 
domestic  value  chain.  Acquisition  funds  of  over  EUR 2  billion  have  been  made  available  for 
advisory, consulting, and follow-up integrated management.  

•  Taiwan: The Foreign Trade Act (2019) provides the legal basis for managing Taiwan’s export 
control  regime  and  the  trade  of  Strategic  High-Tech  Commodities  .  The  Strategic  High-Tech 
Commodities entity list currently includes over 7,000 items, for which Taiwanese exporters must 
require an export license from the International Trade Administration of the Ministry of Economic 
Affairs of Taiwan. 

•  Taiwan: The National Security Act (amended in June 2022) aims to prevent the leakage of 
national core key technologies. The Act imposes fines of up to NT$100 million (approx. EUR 3 
million) and imprisonment for up to 12 years for the illegal transfer of national core key 
technologies. In December 2023, Taiwanese authorities issued the critical technologies list 
(implemented as part of the National Security Act) that designates 22 technologies believed to be 
Taiwan’s leading technologies requiring immediate protection. The list, subject to review in early 
2024, covers five domains, including (1) defence, (2) space, (3) agriculture, (4) semiconductors, 
and (5) information and communication security. Taiwan: In June 2022, authorities amended the 
Regulations Governing the Approval of Investment or Technical Cooperation in 
Mainland China, which now require Taiwanese firms to obtain approval if they plan to sell their 
local assets and factories or transfer their equities in China to avoid the risk of technology 
leakage. 

•  Taiwan: Stricter administrative rules issued in 2022 on FDI screening processes aim to prevent 
circumvention by PRC firms. These rules follow changes made in 2021 to tighten the definition of 
a “PRC investor” so that a third-area company can also be defined as such. 

8.  International partnerships 

•  US  –  Canada:  The  US  and  Canada  announced  in  March  2023  the  intention  to  set  up  an 
Energy  Transformation  Task  Force  to  coordinate  their  efforts  on  critical  clean  energy 
technologies and the related supply chains, including critical raw materials. The task force’s 
stated  function  is  to  “‘accelerate  cooperation  on  critical  clean  energy  opportunities  and 
supply chains, including but not limited to, securing and strengthening renewable energy and 
electric vehicle supply chains, critical minerals and rare earths, grid integration and resilience, 

77 

 
 
 
 
advanced and conventional nuclear energy and other areas”’ The task fForce will be chaired 
by  the  U.S.  Special  Presidential  Coordinator  for  Global  Infrastructure  and  Canada’s  Deputy 
Prime Minister.  

•  US  –  UK:  The  two  countries  announced  on  8th June  2023  the  intention  to  negotiate  a 
bilateral critical minerals agreement. In the intentions of President Biden and PM Sunak, 
this  targeted  agreement  will  ensure  that  five  critical  minerals  necessary  for  batteries  –- 
cobalt,  graphite,  lithium,  manganese,  and  nickel  –  that  are  extracted  or  processed  in  the 
United  Kingdom  count  toward  sourcing  requirements  for  clean  vehicles  eligible  for  the 
Section 30D clean vehicle tax credit of the Inflation Reduction Act. 

•  US – India: The two countries signed an MoU on establishing a semiconductor supply chain 
and  innovation  partnership.  This  will  seek  to  establish  a  collaborative  mechanism  on 
semiconductor  supply  chain  resiliency  and  diversification,  in  line  with  the  US’s  CHIPS  and 
Science  Act  and  India’s  Semiconductor  Mission.  The  MoU  also  aims  to  leverage  the 
complementary  strengths  of  both  countries  and  facilitate  commercial  opportunities  and 
development of semiconductor innovation ecosystems. It also envisages mutually beneficial 
R&D, talent, and skill development. 

•  US  –  Australia:  In  May  2023,  Australia  and  the  United  States  signed  the  Compact  on 
Critical  Minerals  and  Clean  Energy.  On  2   October  2023  saw  the  inaugural  meeting  of  the 
Australia- US Taskforce on Critical Minerals that arose from that the compact took place. Its 
aims is to expanding reliable, responsible and secure global access to critical minerals. 

•  US – Japan: The two countries signed a bilateral agreement on critical minerals on 28 
 March 2023. The agreement is expected to make Japanese companies eligible for Inflation 
Reduction  Act  subsidies.  It  covers  five  critical  raw  materials  used  in  electric  vehicle  supply 
chains  (cobalt,;  graphite,;  lithium,;  manganese;  and  nickel),  and  provides  forsets  out  to 
maintaining  the  current  practices  of  not  imposing  import  and  export  limitations  while 
safeguarding environmental and labour rights. It will be revised every two 2 years. 

•  US  –  South  Korea:  In  May  2022,  the  two  countries  signed  an  MoU  on  the  establishing  a 
‘Supply Chain and Commercial Dialogue’ and upgrading their existing working-level industrial 
cooperation  dialogue  platform.  Under  the  agreement,  the  two  countries  plan  to  hold  an 
economic  security  dialogue  between their  respective  national  security  councils  once  a  year 
and discuss a wide range of industry and economic issues, including resilient supply chains 
of semiconductors and other high-tech items, the digital economy, health care technologies 
and  exports  control.  They  also  agreed  to  boost  cooperation  on  R&D,  and  create  more 
business  opportunities.  On  the  occasion  of  President  Yoon’s  attendance  at  the  2023  APEC 
summit in San Francisco, US companies GM, DuPont, IMC and Ecolab declared commitments 
to  investing  in  South  Korea  on  the  occasion  of  President    attendance  at  the  2023  APEC 
summit in San Francisco. 

•  Canada – South Korea: South Korea’s Ministry of Trade, Industry and Energy has arranged 
MoUs  between  LG  Energy  and  several  Canadian  companies  to  reinforce  critical  mineral 
supply  chain  cooperation. These  MoUs  will  help Korean  companies to  establish  new  supply 
chains  in  North  America  for  secondary  batteries  and  electric  vehicles,  particularly  in 
conjunction with the US Inflation Reduction Act. Through these deals, LG Energy Solution will 
be  able  to  tap  into  Canada’s  stable  supply  stream  of  critical  minerals  for  manufacturing 
secondary batteries in North America, and KOMIR, the Korea Mine Rehabilitation and Mineral 
Resources Corporation KOMIR, will be able to provide better support to private sectors with 

78 

 
 
data on Canada’s mining investment. 

•  UK – Canada: The two countries announced a new partnership in March 2023 to increase 
their  cooperation  on  the  supply  of  critical  raw  materials.  This  new  UK-Canada  Critical 
Minerals Supply Chains Dialogue has the stated objective of integrating the critical raw 
materials supply  chains of Canada and the UK, driving higher ESG standards, and boosting 
research and development in the field.   

•  UK – Australiasupply chain resilience capability building initiative. This was set up in 
February 2022 with the goal of increasing shared understanding and insight about common 
dependencies  and  critical  supply  chain  risks.  The  UK  and  Australia  are  developing  a  joint 
supply chain resilience initiative to engage interested countries in developing and improving 
public-sector approaches to managing critical supply chain risks. This will initially begin with 
a pilot project to determine further scope. The initiative will support countries that want to: -
improve  public-  sector  approaches  to  building  critical  supply  chain  resilience,  -strengthen 
global  supply  chains  through  shared  learning  and  coordinated  action,  -build  greater 
transparency into key global supply chains, and -promote international action to respond to 
supply  chain  disruptions.  It  will  include:  -  a  series  of  modules  designed  to  support  the 
capability  of 
interested  partner  governments,  and  will  also  share  approaches  to 
strengthening  critical  and  vulnerable  supply  chains  and  enhancing  global  supply  chain 
resilience for mutual benefit. 

•  UK – Australia: A working group on critical minerals was set up in 2021. Australia and the 
UK are continuing to identify investment opportunities that would bolster Australia’s critical 
minerals sector and the UK’s manufacturing and energy ambitions. 

•  UK  –  Japan  Critical  Minerals  Memorandum  of  Cooperation:  The  UK  and  Japan  have 
agreed  a  memorandum  of  cooperation  (MoC)  establishing  a  new  partnership  on  critical 
minerals.  The  MoC  delivers  on  a  specific  commitment  made  by  leaders  in  the  Hiroshima 
Accord. It will provide a framework for deepening critical minerals cooperation between the 
two countries and promote dialogue on a range of areas including: research and innovation, 
critical  minerals  data  and traceability,  industry  partnerships  and  public-private  cooperation, 
infrastructure  projects  in  third  countries,  cooperation  to  support  developing  producer 
countries,  cooperation  on  technical  standards  and  environmental,  social  and  governance 
standards. The MoC was signed by Kemi Badenoch,  the UK Secretary of State for Business 
and Trade, and Yasutoshi Nishimura, the Japanese Minister of Economy, Trade and Industry 
of Japan, at the G7 Trade Ministers’ Meeting in Osaka on 28  October 2023. 

•  UK  –  South  Korea:  In  February  2022,  the  two  countries  signed  the  Critical  Supply  Chain 
Resilience  MoU  signed  in February  2022.  The  MoU called  for  holding both  senior-level  and 
working-level  talks  on  a  regular  basis  to  exchange  policy  measures  and  information 
regarding  supply  chain  issues  and  to  promote  two-way  investment  and  trade.  The  UK  and 
the  South  Korea  plan  to  explore  deeper  collaboration,  including  by  sharing  approaches  to 
building mutual capability, coordination of joint principles and responses to economic shocks, 
and working together in multilateral forums including, but not limited to, G7+ and G20. 

•  UK  –  South  and  Southern  Africa  announced  a  new  partnership  in  November  2022  on 
minerals for future clean energy technologies to promote increased responsible exploration, 
production and processing of minerals in South and Southern Africa.  

•  UK  –  Taiwan:  Announced  On  14 November  2023,  the  UK  and  Taiwan  announced  an 

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enhanced trade partnership focused on three priority areas: (i) investment; (ii) digital trade; 
and (iii) renewable energy and net zero. The two partners agreed to cooperate on green trade 
by  developing  energy  infrastructure,  supporting  offshore  wind  deployment  in  Taiwan  by 
developing  ports  capacity  and  financing  models,  and  improving  health  and  safety 
implementation.  Additionally,  they  agreed  to  collaborate  in  emerging  energy  technologies 
and  seek  to  remove  barriers  to  trade  in  environmental  goods  and  services,  and  work 
bilaterally to build a circular economy, develop skills and share best practices. 

•  Australia  –  India:  The  two  countries  have  concluded  a  bilateral  commercial  cooperation 
over  rare  earth  elements  to  reinforce  supply  chains  between  the  two  countries  in  these 
sectors.  

•  Australia  –  South  Korea:  in  December  2021,  the  two  countries  signed  an  MoU  on 
cooperation in  critical  mineral  supply  chains to  further  strengthen  cooperation  in  resources 
and energy. This builds on previous commitments outlined in their 2019 MoU on energy and 
mineral resources cooperation. 

• 

India – Japan: The two countries signed an MoU on semiconductor design, manufacturing, 
equipment research, and talent development to bring resilience to the semiconductors supply 
chain.  

•  Australia – India – Japan: Supply chain resilience initiative to cooperate on supply chain 
resilience  in  the  Indo-Pacific  region.  Cooperation  consists  of  sharing  of  best  practices  on 
supply chain resilience; and holding an investment promotion/buyer-seller matching event.  

•  Australia – Singapore: The two countries launched the Australia – Asia Sun Cable project 
in 2022. The goal is to develop physical interconnections between Singapore and Australia’s 
electric  grids,  and  to  reinforce  Singapore’s  access  to  green  electricity  via  massive 
investments in solar farms in Australia. 

•  Japan – United Arab Emirates:  On 17 July 2023, on the margins of a state visit by the 
Japanese  Prime  minister  that  produced  23  bilateral  agreements  on  strategic  technologies 
and critical raw materials, Japan and the UAE signed a memorandum of understanding for 
the  supply  of  clean  iron  and  steel.  As  part  of  the  MoU,  the  parties  will  develop  a  joint 
framework  for  collaboration  over  the  logistics  and  digital  supply  chain  requirements,  and 
share  information  and  expertise  on  industry  best  practices.  Abu  Dhabi  Ports  will  be 
responsible for providing the land for new plant, in the KEZAD Musaffah economic zone. It 
will also offer maritime and logistics services for the supply of iron ore to the plant, and the 
export  of  the  materials  around  the  world.  Emirates  Steel  Arkan  will  provide  ‘extensive 
decarbonisation  expertise’  and  use  clean  and  green  energy  sources,  including  solar  and 
hydrogen, to power the plant. 

•  South Korea – Uzbekistan: The two countries signed MoUs in December 2021 to establish 
a  communication  channel  for  energy,  cooperate  in  the  production  of  rare  metals,  and  join 
efforts to develop industrial technology for electric vehicles. 

•  South  Korea  –  Indonesia:  South  Korea  and  Indonesia  signed  a  total  of  five  MoUs  in 
February  2022 to boost  bilateral  cooperation  in  the  supply  chains  of  key  minerals  and  the 
electric  car  sector.  The  MoU  on  key  minerals  in  particular  called  for  sharing  information 
between the two ministries of trade and industry and supporting joint related projects so as 
to help ensure the countries'’ stable supplies of major industry items.  

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•  South  Korea  –  the  Philippines:   In  October  2022,  the  two  countries  agreed  during  their 
annual  economic  cooperation  committee  to  sign  an  MoU  on  the  supply  of  critical  minerals 
and other raw materials for industry purposes, and to launch working-level talks for on the 
details. Under the MoU, a new director-level entity on supply chains is expected to be set up.  

•  South Korea – Chile: In October 2022, on the occasion of the bilateral dialogue at prime 
ministerial level, the Korea Mine Rehabilitation and Mineral  Resources Corp  (KOMIR)  signed 
an MoU with its Chilean counterpart on the supply of mineral resources. 

•  Chip 4 Alliance (US, Japan, South Korea, and Taiwan): Announced in March 2022, the 
Chip  4  Alliance  is  a  US-led  cooperation  forum  for  governments  and  companies  to  discuss 
and  co-ordinate  policies  on  semiconductor  supply  chains,  workforce  development,  R&D,and 
subsidies.  

•  The  Quad  (US,  Australia,  India,  and  Japan)  has  set  up  a  Critical  and  Emerging 
Technology  Working  Group  to  monitor  and  improve  the  security  of  supply  chains  for 
critical  technologies.  The  Quad’s  CET  Working  Group  promotes  global  technology  markets 
and  standards  based  on  openness,  diversity,  trust,  and  resilience.  The  CET  Working  group 
cooperates on technical standards,; 5G,; horizon scanning; and technology supply chains. 

• 

Indo-Pacific Framework for Prosperity (IPEF) Supply Chain Agreement with the US, 
South  Korea,  Japan,  India,  Australia  and  ASEAN  members:  The  parties  signed  the 
agreement  in  2023  to:  (i)  promote  regulatory  transparency  in  areas  which  may  impact 
supply chains; (ii) develop a shared understanding of global supply chain risks through each 
pParty identifying their critical sectors and key goods in their supply chains; (iii) monitor and 
address  supply  chain  vulnerabilities;  and  (iv)  promote  responsible  business  conduct  and 
transparency in terms of upholding labour rights in supply chains. 

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