Europe's green technology industries and materials suppliers urged European Union leaders meeting for a summit on Thursday to do more to prevent the bloc dropping out of the global clean tech race against competitors China and the US.

The European Union is expected to pass legislation setting targets for EU-based companies to make at least 40% of the EU's annual deployment needs of solar, wind and other net-zero technologies by 2030.

The bloc will also set targets to increase the domestic supply and processing of critical minerals.

The heads of European associations representing solar, wind, hydrogen, batteries, chemicals and metals sectors said in a letter that China had established a growing footprint across most clean tech sectors and the US had taken a decisive step with its Inflation Reduction Act (IRA).

However, the letter to EU leaders and top EU officials said that Europe's investment situation had worsened since Russia's invasion of Ukraine, with high energy prices, inflation and growing supply risks.

EU leaders are due to discuss the competitiveness of industry and technology on Friday.

The letter said the EU's focus over the next five years must be on industrial policy to boost the clean tech sector and its suppliers.

The associations said the EU needed to ensure easier access to public financing, learning from the IRA, and fast-tracking of permits, such as for the 80 GW of wind power projects still awaiting approval.

Europe, the associations said, needed competitive energy prices, measures to protect against unfair practices of third countries and economic incentives to encourage procurement of local materials or components.

The associations said several quick fixes were possible this year and that industrial policy should be a key focus during the five-year term of the new European Commission formed next year.