The European Union has proposed new measures to boost the bloc's green industries.

European Commission President Ursula Von der Leyen announced the plans in Brussels on Tuesday, stressing that the green energy transition and the economic changes it will bring have to be one of the EU's top priorities.

"We have long since argued that the fight against climate change is a must: A must for our planet, a must for our economic prosperity and a must for our strategic independence. We are competitive. We need competition. What we are looking at is that we have a level playing field in the global competition as well as a level playing field within the single market," said Von der Leyen.

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The plan, which still needs to go through the European Parliament and the European Council of member states, will focus on loosening state aid rules, accelerating approval of green projects, boosting skills and securing trade deals to secure new sources of critical raw materials and is a response to recent legislation in China and the U.S..

The EU puts limits on how much public money individual member states can invest in their domestic economy, a measure designed to avoid unfair competition between the bloc's large economies and members with less financial firepower.

Lifting these limits would allow European countries to roll out investment similar to the U.S.'s Inflation Reduction Act, but the concern for some states is that this could lead to countries like Germany and France, using their relative wealth to invest more than smaller member states.

In response to this, Ursula Von der Leyen announced the EU would launch a European Sovereignty Fund, a pot of money designed to help smaller European economies keep pace with the kind of public investment made by the bloc's bigger economies.

The Commission President also announced that some EU money would be repurposed and used to boost the continent's green economy. COVID-19 recovery funds and money meant to help member states reduce their reliance on Russian fossil fuels will now be used to boost green industries.

The long-term hope for the EU is to reshape its economy in order to fight climate change while also ensuring that U.S. and China's reforms don't lure green industries away from Europe.