Presentation - European Parliament - Europa

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Aug 30, 2011 ... Presentation to ITRE Committee. European ... In the supply chain of KETs, advanced manufacturing systems are important to produce high ...
High Level Group on Key Enabling Technologies Gabriel M. Crean, VP CEA Technologies

Presentation to ITRE Committee European Parliament Brussels, 30th of August 2011

Máire Geoghegan‐Quinn Commissioner (Abs. in picture below)

Outline Part 1 KETS ?

Part 2 KETs global playing field

1.1 - Importance of KETs to address European societal challenges 1.2 - KETs underpin significant value chains 2.1 – KETs SWOT analysis 2.2 - KETs manufacturing initiative in US 2.3 – Analysis of public supporting measures to RDI (in third countries)

Part 3 HLG recommendations

2.4 - Balance between basic and applied research

3.1 - A single and fully-fledged KETs innovation policy at EU Level to pass across the ‘valley of death’ 3.2 - A comprehensive strategic approach to a KETs policy at EU level

Part 4

3.3 - Combined financing to promote RDI investments in KETS

How can ITRE Committee assist

KET’s perimeter The High Level Group focused on the following six KETs : The European Commission communication 2009 defined the initial KET’s perimeter:

Biotechnology Biotechnology

Micro and and Micro nanoelectronics nanoelectronics

NanoNanotechnologIes technologIes

Based on current global research and market trends the following could be regarded as the most strategically relevant KETs, given their economic potential, contribution to solving societal challenges and knowledge intensity :

Advanced Advanced materials materials

Photonics Photonics

Nanotechnology holds the promise of leading to the development of smart nano and micro devices and systems and to radical breakthroughs in vital fields such as healthcare, energy, environment and manufacturing; Micro- and nanoelectronics, including semiconductors, are essential for all goods and services which need intelligent control in sectors as diverse as automotive and transportation, aeronautics and space…. Photonics is a multidisciplinary domain dealing with light, encompassing its generation,detection and management. … Advanced materials offer major improvements in a wide variety of different fields, e.g. in aerospace, transport, building and health care.

Advanced Advanced manufacturing manufacturing systems systems

Biotechnology brings cleaner and sustainable process alternatives for industrial and agri-food operations. For instance, CCS and CO2-related transport grids will be needed to reduce CO2 emission in countries that will continue to rely heavily on fossil energy sources.

The HLG KET mid-term report was validated by HLG Members and In the supply chain of KETs, advanced manufacturing systems are important to Commissioners Tajani, Kroes and produce high value marketable knowledge-based goods and the related services . Geoghegan-Quinn on the 9th of February 2011

3

KETs are essential to develop and manufacture advanced products Advanced materials

substrate

Societal Challenge

Microelectronics Chip

Nanotechnologies

Mems

Digital Society

Photonics Camera

Biotechnologies

Next ?

KETs are essential to develop and manufacture advanced products Advanced materials

Nanolabels

Societal Challenge Microelectronics

Biochip

Nanotechnologies

Fluidics

Effective timely detection and diagnostic systems

Photonics Optical detection

Biotechnologies DNA

KETs are essential to develop and manufacture advanced products Advanced materials

Societal Challenge

Organic product

Microelectronics

Smart meter for utility energy consumption

Nanotechnologies Si Nanowire

Combating climate change

Photonics PV modules

Biotechnologies

KETs are essential to develop and manufacture advanced products Micro & Nano  electronics

Energy

Green Car Value Chain Case Study  De-carbonisation of transport

Biotechnologies

Nanotechnologies

Advanced  Advanced  Manufacturing  Advanced materials materials Systems

Photonics

Green Car Value Chain Case Study (2/2)  Zoom on KETs Material

Component

System Cells & Modules

Battery

Solution Electrical Vehicle

Soc.issu e

Recyclin g

Mobility Energy Efficiency

BMS1

Non-KET domain

Bio Tires Software

Lamp

Advanced Manuf. systems Nanotechnologies Micro- and Nanoelectronic s

High-tech Mechanosynthe -sis equipment2

Anhydrous envir. + Clean Room Facilities

Characterization

Hybrid nanomaterials

Si SOI

Chips

Sensors

Biotechnology

Biomass

Bio isoprene

Bio based synthesis rubber, elastomers

Photonics

GaN

MOCVD3 reactor

LED

Advanced Materials

Product

Electrodes Material (Nanostructured Multimaterials)

Clean Room Facilities

Nano-Coating

Powder Ink

1. Battery Management System 2. Inert atmosphere Source: HLG documents of phase 1, Expert interviews, own analysis

Characterization

Material separation 3. Metal-Organic Chemical Vapour Deposition

KETs are strategic all along EU value chains Car industry Lighting

From product to societal challenge

From KETs to final product

Material Equipment Component Product Solutions & services Societal challenges

Biomass

GaN

Nanoelectronics

SOI material

Biolsoprene MOCVD reactor Litho scanner Biobased Synthesis rubber, LED Adhesives, elastomers

Car tyres

Lamp

Biobased tyres Lighting

Nano component (Low power)

KETs: -Advanced materials -Nanotechnologies -Biotechnologies KETs: -Advanced manufac turing Systems -Biotechnology KETs: -Nanoelectronics -Photonics

Mobile phone

Nomadic communication

Energy CO2 reduction Knowledge efficiency Energy efficiency society (Climate change) (Climate change)

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Outline Part 1 KETS ?

Part 2 KETs global playing field

1.1 - Importance of KETs to address European societal challenges 1.2 - KETs underpin significant value chains 2.1 – KETs SWOT analysis 2.2 - KETs manufacturing initiative in US 2.3 – Analysis of public supporting measures to RDI (in third countries)

Part 3 HLG recommendations

2.4 - Balance between basic and applied research

3.1 - A single and fully-fledged KETs innovation policy at EU Level to pass across the ‘valley of death’ 3.2 - A comprehensive strategic approach to a KETs policy at EU level

Part 4

3.3 - Combined financing to promote RDI investments in KETS

How can ITRE Committee assist

Concerning patent activity Europe is still in the KET’s race

2008 Shares of EPO/PCT patents by regions (percent) All KETs cumulated 45% 40%

East Asia

35% Europe

30% North America

25% 20% 15% 10%

2008 priority patents (published)

5% RoW

0% '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 11 Source: European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW), TKM 2011

EU actors at top of KET patent1 ranking Global TOP10 per KET NanoNanotechnologIes technologIes

Micro Micro and and nanoelectronics nanoelectronics

R&D actors

CEA Univ. of California JSTA CNRS MIT US DoE AIST NI of Health Univ. Texas FhG

CEA Univ. of California IMEC FhG AIST CNRS MIT JSTA IKETR Univ. Tohoku

CEA FhG MIT Univ. of California US DoE CNRS AIST JSTA US gvmt. ETRI

All actors

Samsung HP Univ. of California Canon 3M Agilent JSTA Hitachi Sony Matsushita

Infineon Tokyo Electron Matsushita Samsung Applied Materials Fujitsu Nikon ST Microelctronics NEC IBM

Samsung Matsushita 3M Corning Fuji Film Osram Sumitomo Sharp Kodak Sony

1. EPO/PCT patents, 2000-2007 Source: European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW), TKM 2011

Photonics Photonics

Disconnect between EU patent base and EU manufacturing share

Examples from three dedicated KETs case-studies

1 - Lithium-ion batteries for low-carbon electric vehicle 2 - Bioethanol production 3 - PV cells for solar renewable energy

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Disconnection between patents share and manufacturing share Case Study: Li-ion battery production % %

Li-ion battery cell production share in 2008 Advanced Material Patent Share

Asia Europe 0%

USA 1%

87% 31%

30% 35%

12%

Others 4% Source: European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW), CGGC, Lithium-ion Batteries for Electric Vehicles : THE U.S. VALUE CHAIN, October 2010

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Electric Vehicles: a worldwide race Is Europe running ? U.S.

EU

ASIA

EC: 100M€ (EV+HEV)

> 9.2B€

FR: 545M€ (EV+HEV) ~ 2.5B€ batteries

D: 770 M€ (EV+HEV)

> 3.3 B€ ~ 1,48b€ 1,48b€ batteries

> 1.2 B€ JP: 2.15B€ (Batteries) KR: 460M€ (EV + HEV)

ARRA1: 1.855B€ (EV including 1,16b€ Batteries) CH: > 700M€ (EV + HEV) ATVMIP 2 :

6.57B€ (EV+HEV)

Michigan: 260M€ (Industrialisation of batteries) Prog DOE: 484M€ (including 58,5M€ Batteries) 1 American Recovery and Reinvestment Act 2 Advanced Technology Vehicles Manufacturing Incentive Program

Source:

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“The Rules have Changed” Barack H. Obama, State of The Union 2011 speech, Jan 25

“At stake [right now] is whether new jobs and industries take root in this country, or somewhere else. […] The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. […] Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They're investing in research and new technologies. Just recently, China became the home to the world's largest private solar research facility, and the world's fastest computer. The future is ours to win. But to get there, we can't just stand still.[…] We know what it takes to compete for the jobs and industries of our time. We

need to out-innovate, out-educate, and out-build the rest of the world. All these investments -- in innovation, education, and infrastructure -- will make America a better place to do business and create jobs. The first step in winning the future is encouraging American innovation. […] In America, innovation doesn't just change our lives. It is how we make our living. […] This

is our generation's Sputnik moment.

[…] We'll invest in biomedical research, information technology, and especially clean energy

technology an investment that will strengthen our security, protect our planet, and create

countless new

jobs for our people.” John Seely Brown, former director of Xerox’s Silicon Valley research center, co-chair of the Deloitte Center for Edge Innovation (Financial Times, Jan 28, 2011)

“We really have to get back to building things, we can’t just design things. […] The president’s emphasis on the need to improve the nation’s infrastructure, alongside spending on basic research and improvements in education, could pay dividends in the long term. ”

Andrew Grove's proposal to rebuild America's economy Founder and former chairman and CEO of Intel Corp. “The United States must restructure its government around the idea of attracting foreign

manufacturers to America in order to put Americans back to work […], National manufacturing 16 ecosystems compete with each other"

Aggressive US federal and state action to attract foreign firms 2005 BASF invests significantly in lithium-ion cathode materials research and development 2010 BASF breaks ground for North America's most advanced production facility for Lithium-Ion battery materials in OHIO

$50+ million production facility $24.6 million grant from the US DoE

Washington Montana

North Dakota

Vermont

Minnesota

Oregon

Michigan

New Hampshire

Wisconsin

Idaho

Massachusetts under Recovery and Reinvestment Act. New York the American

South Dakota Wyoming

$200 million production facility $95.5 million grant from the US DoE Nevada

Rhode Island Connecticut Iowa

Pennsylvania

Nebraska

Utah

Illinois

Indiana

Ohio West Virginia

Colorado

California

Arizona New Mexico

Maine

Kansas

Missouri

North Carolina South Carolina

Arkansas Mississippi

Texas

Alaska March 15, 2010 in Jacksonville, Florida

Virginia

Kentucky Tennessee

Oklahoma

New Jersey Delaware Maryland

Alabama

Georgia

Louisiana

Florida

Hawaii

2006 SAFT forms a joint venture with Johnson Controls 2009 SAFT America to Build New Advanced Battery Plant in Jacksonville, Florida The new plant will manufacture lithium-ion cells, modules and battery packs for military, industrial, and agricultural vehicles

1. Argonne National Laboratory Source: BASF.com, SAFT.com, chemweek.com, prnewswire.com

October 27, 2010 in Elyria, Ohio

Disconnection between patents share and manufacturing share Case Study: Bioethanol production % %

Bioethanol production share in 2009 Industrial Biotechnologies Patent Share

Europe

USA

5% 54% 36%

China 3%

34% 23%

Brazil

Asia

34% 4%

Others 7% Source: European Biomass Industry Association, European Biofuels Technology Platform (EBTP), European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW)

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Brazilian government still increases its investments in Industrial  Biotechnologies • In 2009, state governed Brazilian company Petrobras announces to invest 2,8B$ in biofuels • July, 2010, the Brazilian Innovation Agency FINEP and  Brazil’s National Development Bank (BNDES) finance  540M$ for the country’s biofuels sector • June 2011, Brazilian state‐owned development bank  BNDES announced that it will make $18‐22 billion  in loans to the sugarcane and ethanol sector

• EIB loans provided to all renewable energy sector in 2010: 6B€

1. American Recovery and Reinvestment Act 2. Financiadora de Estudos e Projetos: The Brazilian Innovation Agency Source: Own Analysis, Web site of Department of Energy, of the ARRA (American Recovery and Reinvestment Act ), www.biopreferred.gov, http://www.agribionet.org/client/page1.asp?page=3159&clef=19&clef2=11, http://www.energyrefuge.com/blog/brazilian-bioethanol-researchgets-funding-boost/, http://biofuelsdigest.com/bdigest/2011/06/08/brazil-to-invest-22b-in-ethanol-gm-ceo-says-ethanol-has-not-much-future-inus/, EPIA

US attracts our young KET champions (they go as far as  financing 50% of Pilot Lines, and giving loans for the rest). February 2011

UK INEOS Bio builds a plant in the US with

>95% subsidies and loans guarantees Washington Montana

North Dakota

Vermont

Minnesota

Oregon

Maine

Michigan New Hampshire

Wisconsin

Idaho

South Dakota

Rhode Island Connecticut Iowa

Nevada

Pennsylvania

Nebraska Utah

Illinois

Indiana

Ohio West Virginia

Colorado

California

Kansas

Missouri

New Mexico

Oklahoma

Virginia

North Carolina South Carolina

Arkansas Mississippi

Texas

New Jersey Delaware Maryland

Kentucky Tennessee

Arizona

Massachusetts

New York

Wyoming

Alabama

Georgia

Louisiana

Florida Alaska Hawaii

$130 million production facility to produce advanced biofuels from waste  $50 million Grant from the U.S. Department of Energy  $75 million loan guarantee from the U.S. Department of Agriculture Source:Cross-sectoral Analysis of the Impact of International Industrial Policy on Key Enabling Technologies (Danish Technological Institute with IDEA Consult, 2011), http://americanfuels.blogspot.com/2011/02/ineos-bio-jv-breaks-ground-on-florida.html,

Disconnection between patents share and manufacturing share Case Study: PV Cell production %

PV cell production share in 2009

Europe = 77 % % Photonics Patent Share

of global market

Europe First Solar

13%

12% 29%

Japan China/Taiwan 15%

27% 42% 42%

Asia 18%

Others 2% Source: Photon International Mars 2010, European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW) « JP Morgan, PV News, Oliver Wyman Analysis”

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TOP10 manufacturers of solar panels/cells 2004 to 2010 Cell production in MWp

1

Sharp

75

1

Sharp

324

First Solar

2

Kyocera

51

2

Kyocera

105

Suntech

2

Shell solar

4 5

~21B$ “loans” 51

3

BP Solar

by government owned banks 40 4 Q-Cells for four major Chinese PV 24 5 Mitsubishi Astropower manufacturers BP solar

85

Sharp

75

Q-Cells

75

Yingli

1100 704 595 5,3B$ 571

4,4B$ 525

Suntech

1250

First Solar

1228

Yingli Solar

950

JA Solar

900

Sharp

750

6

Sanyo

20

6

Shell solar

72

JA Solar

520

Q-Cells

700

7

Isofoton

16

7

Sanyo

65

Kyocera

400

Gintech

700

7

RWE Solar

16

8

Schott Solar

63

Trina Solar

399

Motech

600

9

Mistubishi

12

9

Isofoton

53

SunPower

397

Trina Solar

600

9 Photowatt

12

10 Motech

35

Gintech

368

Kyocera

550 22

Sources : Photon international mars 2010 Solar Cell Production and Market Implementation in Japan, USA and the European Union - Joint Research Centre - European Commission - A Jäger-Waldau – 2002

“China solar PV credit agreements reach ~$33.6B” Deutsche Bank Global Market Research March 2011

Jinko Solar gets  $7.6 Billion  credit facility Jinko, a pretender  for the remaining two  non‐Asian places  among the TOP10  for 2011 Source: Photon international mars 2010, Solar Cell Production and Market Implementation in Japan, USA and the EU ‐ JRC ‐ EC ‐ A Jäger‐Waldau – 2002, www.latribune.fr/green‐business,  http://www.chinadaily.com.cn/bizchina/2010‐07/09/content_10087488.htm, Bloomberg, http://www.bizjournals.com/triangle/stories/2008/07/14/daily17.html,  http://www.bizjournals.com/albany/stories/2010/05/31/daily1.html, http://www.iceach.com/htm_news/2010‐9/9346_873700.htm, http://solar‐energy‐news‐and‐ views.blogspot.com/2011/03/jinko‐solar‐gets‐76‐billion‐credit.html, EPIA, Deutsche Bank Global Market Research

The European ‘‘ valley of death ’’

Knowledge Market

The valley of death 24

China is agressively ramping up the value chain to address future systems markets

LED value chain

Materials

Chips

Components

Systems and luminaires

Market size 2009

$0,07B

$0,23B

$0,65B

$1,97B

CAGR 2009-2015

+55%

+58%

+59%

+70%

Governmental Incentives Up to 50% of the cost of a MOCVD reactor

+1000 new MOCVD reactors installed in 2010-2012

2’’ equivalent per month capacity X10 Q4 2009 : 140,000 Q4 2011 : 1,465,000

Equipments $1B “… MOCVD equipment for LED production is almost But until monopolized by German when? AIXTRON and American VEECO”

« …some Chinese programs seem to exist to copy western equipments.»

Source : Yole, DOE manufacturing roadmap, Strategies Unlimited, Morgan Stanley

Services

?

• LED cities will have at least 21 cities install a minimum of 10,000 LED streetlights each • Guangdong Province (China): $90 Million budget to subsidize 30% of LED street lamp cost

Demand Side Measures

Our KET champions are as well attracted by Russia, thanks to its Rusnano investment fund

RUSNANO Enters $300 Million

• CNRS‐INPG‐UJF‐CEA • 30 scientists • Located in Minatec  • Spin electronics, MRAM, magneto‐optic

Deal to Build Advanced MRAM Manufacturing Facility in Russia

recording,..

2011

"success story" O. Redon

JP. Nozieres

B. Dieny

CEA CNRS co‐founders European VC

"We selected Crocus because we believe  their technology is best‐in‐class and  promises to bring differentiated MRAM  products to market", said A. Chubais, CEO  RUSNANO

US‐PCAST (similar to EC HLG)  obtained similar findings to us !

May 2011 Intermediate report 

Recommended actions by the PCAST1 – strong overlap with HLG‐KET recommendations can be observed Pillar 3: co‐location R&D/Manufacturing  Pillar 2: accelerating the  manufacturing process

Combining the funding

Pillar 1: technology infrastructure

Valley of death

1. President's Council of Advisors on Science and Technology Source: Report to the President: Ensuring American Leadership In Advanced Manufacturing (PCAST, 2011), http://www.manufacturingnews.com/news/11/0531/ami.html

Pillar 3: overcoming the market failure

China has put firms at the centre of innovation  and supports  specific KETs State Laboratories 1975

1995

2005

Shift from a PRO1‐centered  innovation system to a  firm‐centred one

Consolidation of R&D  infrastructure with the  construction of 199 state of  the art State Key  Laboratories (SKL)

• 80/199 SKLs are explicitly  dedicated to the KETs • ~32000 employees • “most Chinese enterprises don’t  have research teams of their own”

1. PRO : Public Research Organization Sources: A Guide to the Chinese State Key Laboratories by the Helmholtz Gemeinschaft Beijing Representative Office 2007, OECD

International benchmark on the share of basic, applied and development  activities funded by China, Korea, the US, the Member States and the EU Korean, Chinese and US federal R&D funds mainly go to applied “Development” whereas Europe has the highest  share of Basic Research Funding Basic

FP7

Applied

Development

100 19%

90

EIT+JTI - 7%

80 70

CIP+PPP - 11%

44% 58%

48%

60

45%

50 32%

40 30

FP7 82%

28%

32%

20

36%

10

24%

24%

Korea

US

11% 0 China

Sum of Member States

EU

7th FWP EU 2010 Source: Key Science and Engineering Indicators, National Science Board, 2010 Digest, NSF, http://cordis.europa.eu/erawatch, OECD " Research and Development Statistics “, Own analysis

Outline Part 1 KETS ?

Part 2 KETs global playing field

1.1 - Importance of KETs to address European societal challenges 1.2 - KETs underpin significant value chains 2.1 – KETs SWOT analysis 2.2 - KETs manufacturing initiative in US 2.3 – Analysis of public supporting measures to RDI (in third countries)

Part 3 HLG recommendations

2.4 - Balance between basic and applied research

3.1 - A single and fully-fledged KETs innovation policy at EU Level to pass across the ‘valley of death’ 3.2 - A comprehensive strategic approach to a KETs policy at EU level

Part 4

3.3 - Combined financing to promote RDI investments in KETS

How can ITRE Committee assist

A KETs label and fully-fledged KETs innovation policy at EU Level …to pass across the ‘valley of death’ A single and integrated approach to KETs

The three pillars bridge

Recommendation 1:

Recommendation 2: Recommendation 3: Recommendation 4:

“Make KETs a technological priority for Europe’’

“The EU should “Fully exploit the apply the TRL scale scope of relevant R&D definition’’ R&D definitions’’

‘‘ an integrated KETs policy (CSF, regional policy, EIB)’’

“Rebalancing of EU RDI funding programmes’’

A comprehensive strategic approach to a KETs policy at EU level

Industrial driven approach to maximise the European added value

Recommendation 5:

Recommendation 6:

Recommendation 9:

“A strategic approach to KETs programmes’’

“Establish an appropriate set of rules to implement KETs programmes’’

“Globally competitive IP policy in Europe’’

‘‘Top down calls ’’

‘Simultaneous commitments from stakeholders’’

‘Similar to Bayh Dole Act’

Combined financing to promote RDI investments in KETS

Combination funding

Recommendation 7: DG …

Member states

EU

“Combined funding mechanisms’’

DG … DG …

Combination funding

Recommendation 8 : “KETs state aid provisions’’

Public driven

Private driven

Manufacturing capacity competitiveness Technology competitiveness

Recommendation N° 10  Build, strengthen and retain KETs skills The High Level Group recommends that the EU should create a European  Technology Research Council (ETRC) to promote individual excellence  in technologically focused engineering research and innovation and establish  the appropriate framework conditions through the ESF regulation in order  to support KETs skills capacity building at national and regional level.

ERC  Basic research

Technological research

Outline Part 1 Methodology

Part 2 Update on KETs global playing field

1.1 - HLG KETs timeline 1.2 - KETs phase 2 methology 2.1 - Latest news 2.2 - Advanced manufacturing initiative in US 2.3 – Analysis of public supporting measures to RDI (in third countries)

Part 3 Proposals and recommendations

2.4 - Balance between basic and applied research

3.1 - A single and fully-fledged KETs innovation policy at EU Level to pass across the ‘valley of death’ 3.2 - A comprehensive strategic approach to a KETs policy at EU level

Part 4

3.3 - Combined financing to promote RDI investments in KETS

How can ITRE Committee assist

How can ITRE Committee assist ? • Recommend to EC the immediate and full implementation of the High Level Group on KETs recommendations in the context of the common negotiation on CSF / Horizon 2020 • Demand clear and unambigous targets with EC research and innovation budgets for Basic, Applied and Development research funding (aligned with international best practice) • Hold full ITRE Parliament hearing on “Level Playing Field for KETs European industry”

KETs for marKETs and

European KETs for the global marKET

Conclusion

Thank you for your attention [email protected]

Máire Geoghegan‐Quinn Commissioner (Abs. in picture below)