The EU wants to deal quickly with the US to resolve a dispute over U.S. electric vehicle tax credits, but the EU must pursue its own green technology subsidies to keep investment at home, EU Internal Market Commissioner Thierry Breton said on Friday.
Breton, who was in Washington to discuss technology issues with U.S. officials, said that $369 billion worth of tax subsidies in President Joe Biden's Inflation Reduction Act IRA would drive investment in U.S. clean energy supply chains to solar panels and wind turbines from electric vehicles.
He said that the impact of European investment towards the U.S. is already being seen in remarks to the Center for Strategic and International Studies. Europe must develop its own policy approach in order to secure its industrial clean tech basis. Last week, European Commission President Ursula von der Leyen announced plans for the Net Zero Industry Act, for EU clean technology subsidies to encourage investment.
Breton said that the EU law would draw inspiration from the IRA law, but without emulating all their elements, as it would be more transparent and would seek to avoid competitive and discriminatory practices.
Breton later admitted to reporters that the U.S. Congress, now divided with Republicans controlling the House of Representatives and Biden's Democrats controlling the Senate, would not change the U.S. law because of its importance to the Biden administration.
Breton said it could help revive some areas of the United States that have suffered from factory closures in the past.
Breton said we need to have a solution for the clean tech industry, comparing the work to the EU's 45 billion-euro semiconductor investment law aimed at building up chip making capacity.
The EU chips act is a counter to a $52 billion U.S. semiconductor production and research act signed into law by Biden last year.
Breton said he was encouraged by the formation of a U.S. task force to try and resolve disputes over the $7,500 U.S. electric vehicle tax credit that is only available to North American-assembled vehicles meeting regional battery content rules. Breton said that a solution needed to find a way to make EU vehicles eligible for credits.