EU close to response to US green subsidy scheme: France
by AFP Staff Writers
Paris (AFP) Feb 6, 2023
The European Union was close to finalising its response to the United States’ multi-billion-dollar climate subsidy programme that has sparked tensions with the bloc, the French economy minister said Monday.
The minister, Bruno Le Maire, and his German counterpart, Robert Habeck, are travelling to Washington on Monday for talks on European concerns about the Inflation Reduction Act (IRA).
European Commission President Ursula von der Leyen on Wednesday unveiled proposals to relax state aid rules, but said there would not immediately be any new EU funding.
The plans will be debated at a meeting of EU heads of state and government on Thursday and Friday in Brussels, with the final decision expected in March.
“We are about to have a European IRA, it will be decided in the European Council in the coming days,” Le Maire told broadcaster France Inter.
“Europe will have finally started a strategic shift towards stronger intervention to defend our industry,” Le Maire said, picking out sectors such as hydrogen, wind and solar.
The IRA funnels $370 billion in subsidies into America’s energy transition — including tax cuts for US-made electric cars and batteries.
While the United States wants to reduce dependence on Chinese imports, Europe is worried about unfair competition and the collateral damage if companies relocate outside the EU.
“We don’t want to get into a worldwide subsidy race, that would be terrible,” German Chancellor Olaf Scholz said Friday.
Le Maire and Habeck will meet with Treasury Secretary Janet Yellen on Tuesday.
The United States was driving ahead with “cost reduction in the development of climate-friendly technologies”, Habeck said in a statement ahead of the trip.
“That is good, but it is important that this is friendly, fair competition,” Habeck said.
Le Maire on Saturday also called for “transparency” between the United States and Europe over the controversial granting of green subsidies and tax breaks in an interview with AFP.