European Reindustrialization Strategy: Challenges for Spain

The European reindustrialization plan offers significant opportunities for Spain, provided there is a commitment within the framework of a well-designed national strategic plan supported by all involved parties.

Nuria G. Rabanal, expert in international strategy at Foro Industria y Energía. Director of the Chair of Security and Defense at the University of León.

The recent global events that have affected Europe’s energy and supply sovereignty in recent years, starting with COVID and continuing with the war in Ukraine and various crises in the Middle East, have underscored the need for Europe to reindustrialize. This must be done following the sustainability criteria set by its own supranational organizations.

The European reindustrialization plan, as outlined in a document by the EU, aims for a European economy that is “more sustainable, digital, resilient, and globally competitive.” This strategy has set a new roadmap where the focus is not only on achieving industrial sector goals but also on promoting sustainability, combating climate change, diversifying and achieving energy autonomy, increased digitalization, and repositioning the EU in the global geoeconomic landscape.

The strategy acknowledges that within the EU’s imports, there are 135 raw materials strongly linked to energy, health, and pharmaceutical ecosystems, as well as advanced technology ecosystems. This implies strategic dependencies that make these sectors vulnerable. External dependencies are also identified for other sectors, such as products and services related to energy storage and cybersecurity, which will be channeled through the Commission’s Critical Technologies Observatory. The logistical supply of raw materials for industry is another key point, especially considering the impact of the Israeli-Palestinian war on global trade flows and the industrial sector.

The need to accelerate the development of the defense industry and the space economy should not be overlooked. These areas will play a crucial role in technological development and real economy in the coming decades, where the EU currently lacks strong positions. This is partly due to the overlap of NATO interests over European defense policy and the limited attention given to the space economy by real-world economics and European authorities.

Reindustrialization and Ecological Transition

One of the recent regulatory moves in this direction is the provisional agreement reached on February 6th between the Council and the European Parliament regarding the The Net-Zero Industry Act. This regulation establishes a framework of measures to strengthen the European ecosystem for the production of net-zero emission technology products. The agreement will contain a unique list of net-zero emission technologies with criteria for selecting strategic projects contributing best to decarbonization.

This regulation makes it clear that reindustrialization plans are compatible with decarbonization. In fact, the EU envisions creating transition pathways in collaboration with all stakeholders, with the industry being one of them.

However, real challenges in this transition may arise from costs, prices, and uncertainty due to strong dependence on external supplies in key sectors. This could potentially slow down the transition. Hence, it is crucial to work towards energy sovereignty in Europe, covering the entire value chain, including the manufacturing of components necessary for renewable energies to function.

Spain’s Potential in European Reindustrialization

Spain has great potential in renewable energies due to its characteristics and geographical location. Additionally, it possesses industrial potential directly related to its ability to adapt to ecological transition. However, both are subject to the success of national policies, political decisions, and the commitment considering the European and global geostrategic framework.

Initially, Spain starts with the same or even greater potential than other EU member states, with political and economic stability being the most determining factor for industrial growth. Unfortunately, the industrial sector has not been the most protected and promoted in recent decades, which has consequences in many ways. There is potential in all industrial sectors outlined by the EU, with a different geographical distribution for each autonomous community.