According to EU Commission President Ursula von der Leyen, the multi-billion dollar US program to promote climate-friendly technologies in America requires a change of course in investment policy in Europe.
In order to cushion competitive disadvantages, the EU regulations for public investments would have to be relaxed, said the German on Sunday in a speech at the College of Europe in Bruges.
In addition, additional European funds are needed to promote clean technologies and cooperation with the USA, for example in setting industry standards and purchasing critical raw materials.
The US program, officially called the Inflation Reduction Act (IRA), is a roughly $369 billion investment plan designed to build a new industrial ecosystem in strategic clean energy sectors.
Subsidies and tax credits are tied to companies using US products or manufacturing in the US.
In the EU, it is therefore considered discriminatory and incompatible with World Trade Organization (WTO) rules.
The European-American Trade and Technology Council meets this Monday.
With a view to the meeting, the Union economics expert in the EU Parliament, Markus Ferber (CSU), had previously told the Funke newspapers that if the USA did not take a step towards Europe at the meeting, the EU Commission would have to decide on the activation of the think about European trade defense instruments.
"US action incompatible with WTO rules"
The head of the Trade Committee in the EU Parliament, Bernd Lange (SPD), no longer expected a negotiated solution on Sunday.
He assumes that some small changes for the implementation of the US law could still be agreed in the talks between the EU and the USA, but not "that much will change substantially," Lange told the newspapers of the Funke media group.
The EU must therefore quickly file a complaint with the WTO in the next few months.
“This will make it clear to us that the US approach is clearly not compatible with WTO regulations.” Lange continued to demand that the EU for its part step up its support for domestic industry.
Von der Leyen said we are already seeing how the US measures could also impact Europe's own clean technology base by redirecting investment flows.
In this competition, however, the same conditions should apply.
Foundation of a “Club for Critical Raw Materials”
Von der Leyen did not say how much additional money the EU should provide to make this possible.
Specifically, however, she suggested expanding the existing REPowerEU program first.
In particular, this enables investments in energy efficiency, in renewable energies and in the infrastructure of the Energy Union.
In the medium term, money should then be made available for upstream research, innovations and strategic projects via the sovereignty fund that she proposed back in September.