According to Tradeblatt, the United States and the European Commission have negotiated a possible agreement to allow electric vehicles with critical minerals extracted or processed in the European Union to qualify for U.S. green subsidies.
According to the draft paper seen by German business paper Handelsblatt, Lithium, manganese, nickel and cobalt key minerals for battery production would fall under the agreement and should therefore qualify for subsidies under the U.S. $430 billion Inflation Reduction Act IRA package.
Under the IRA rules, electric vehicles can only qualify for subsidies if at least 40% of the critical minerals are from the U.S. or a country it has a free trade agreement with.
In early March, President Joe Biden and European Commission President Ursula von der Leyen agreed that the two sides would start talks on a raw material agreement that would allow vehicles with minerals sourced or processed in Europe.
A European Commission spokeswoman was not immediately available for comment.