By Richard Milne

General Electric, Siemens and Philips have long been rivals. But recently a new front has opened between the industrial groups and it promises to be the hardest-fought competition of all over the title of the biggest seller of green products. GE seized the initiative when the US group launched its “ecomagination” programme in 2005, gaining the PR and marketing upper hand.

But the slogans cannot hide that, when it comes to the numbers, GE is being outpaced by its European rivals. GE made $17bn from green products last year and hopes to make $25bn next year. By contrast, Siemens, Europe’s largest engineering group, made €23bn ($34bn) from such products in the year to September in spite of having under half the revenues of its US rival.

GE’s 2010 target works out to 14 percent of last year’s revenues. Compare that with Philips, the Dutch consumer and healthcare group, which is aiming for 30 percent of its revenues to come from environmentally-friendly products by 2012. The fight between the three industrial groups is just one of many that will crop up in the next decade as green products assume increasing importance. That change is likely to be deeply felt worldwide but few regions will be as affected as Europe. Many industrialists see green products as the basis for manufacturing on the continent.

A report by Roland Berger, the German management consultancy, for the German government shows why: it estimates that by 2020 Germany will earn more money from green products than car production.

Torsten Henzelmann, the author of the report, estimates that Germany should have a market share of 15 percent, and Europe 25 percent, out of the total of about €3,200bn ($4,756) in 2020. That compares with a global market of €1,400bn in 2007. “Europe has the chance to punch above its weight here,” says a leading continental industrialist.

Europe does even better in some sections with current market share in renewable energy of 40 percent and 50 percent even in waste management and recycling, according to Roland Berger. Henzelmann says there are two main reasons for Europe’s success: “We have the industrial footprint. In addition, we have a very friendly environment from politicians.” The latter is particularly cited by continental chief executives.

But the level of subsidies taken to attract wind and solar energy players, say, into Europe has led to concern in the industry as to what happens when they are taken away. Some think low-cost Chinese competition — already being felt in solar energy — could undermine the European position substantially.

Henzelmann says the question of cost and global presence is crucial for Europeans.Pointing to research that suggests 85 percent of the value of German green products is made in Germany, he says: “At the moment we are technology leaders. “On the other hand, our production base is relatively expensive ... It is a clear task to say: we need a global footprint.”

European chief executives are optimistic, with some even talking about green products becoming Europe’s version of a high-tech industry. Bernard Charlès, chief executive of French software group Dassault Systèmes, says there are revolutions taking place in many industries known by some as “old-fashioned”, such as power or cars.

He adds: “They are becoming an integral part of what I call smart products, a new life experience, and I think Europe can really breed a new dynamic in that context.” Asked whether such technology could become Europe’s answer to Google and Microsoft, Benoit Potier, chief executive of French industrial gases group Air Liquide, said: “Yes. I think it might be that Europe will drive the development of green products.