US, EU ministers agree on need for 'full transparency' in green subsidies

US, EU ministers agree on need for 'full transparency' in green subsidies

The German and French economy ministers, Robert Habeck (L) and Bruno Le Maire started meetings with US officials Tuesday
The German and French economy ministers, Robert Habeck (L) and Bruno Le Maire started meetings with US officials Tuesday. Photo: Brendan Smialowski / AFP
Source: AFP

PAY ATTENTION: See you at Legit.ng Media Literacy Webinar! Register for free now!

US officials and the French and German economy ministers have agreed on the need for "full transparency" on green subsidies, following high-stakes talks in Washington over President Joe Biden's ambitious climate action plan.

The aim of the visit by French economy minister Bruno Le Maire and his German counterpart Robert Habeck was to discuss the impact of the Inflation Reduction Act (IRA) on European industry.

While the United States is keen to reduce dependence on Chinese imports, the EU is concerned about collateral damage if companies are enticed by US subsidies to relocate outside the bloc.

Brussels is pushing the United States to make exemptions under the IRA for European companies, but a joint task force set up to address the EU's concerns has yielded few results.

Le Maire told reporters at a joint press briefing that the talks on Tuesday were "concrete and constructive."

Read also

UK's PM creates four ministries with new energy drive

"We agreed on the necessity of full transparency on the level of subsidies and tax credits," he said.

PAY ATTENTION: Subscribe to Digital Talk newsletter to receive must-know business stories and succeed BIG!

US officials and the European ministers also agreed on the need for "constant communication at the ministerial level, especially on strategic investments," he said.

And they found that the implementation of the IRA "should include as many EU components as possible," Le Maire said, citing the examples of electric vehicles, batteries and critical minerals.

Habeck added that it is important the partnership between the United States and Europe did not become a "race to subsidies."

He added that both parties will convene a technical group under the umbrella of an existing task force.

For now, negotiations are proceeding under the European Commission's leadership.

"It's a sign that the two biggest economies in Europe -- Germany and France -- are standing together in this," Habeck earlier told reporters in Washington.

Read also

French, German ministers to tackle green subsidies with US

The visits come after French President Emmanuel Macron's trip to Washington in December, during which Biden said the IRA was never intended to disadvantage US allies.

Willingness to cooperate

US President Joe Biden's landmark Inflation Reduction Act has brought about tensions between the US and European Union
US President Joe Biden's landmark Inflation Reduction Act has brought about tensions between the US and European Union. Photo: Jim WATSON / AFP/File
Source: AFP

The European ministers were expected to stress the need to define fair competition along the lines of reciprocity, transparency and cooperation.

On Tuesday, Le Maire and Habeck met top White House economic policy advisor Brian Deese, and held talks with Commerce Secretary Gina Raimondo and Treasury Secretary Janet Yellen.

Asked about the ministers' meeting with Yellen, Habeck said "there's a huge willingness to find, without opening the IRA, forms of cooperation."

Le Maire added that while Europe was calling for fair competition, "it has never been our intention to change the American law."

A Treasury Department statement said Yellen discussed the implementation of the IRA and the EU's Green Deal Industrial Plan, "stressing the need to stimulate innovation and technology development" on both sides of the Atlantic.

Read also

French parliament debates pension reform as new strike looms

Under the IRA, $370 billion will go toward cutting greenhouse gas emissions.

The act involves tax cuts for companies that invest in clean energy, along with subsidies for electric vehicles, batteries and renewable energy projects -- if they are manufactured in the United States.

Le Maire has previously called the IRA "a game changer," noting that it offers competitive advantages which, coupled with low energy prices in the United States, poses a risk to European industries.

To head off the threat, the EU last week unveiled proposals such as a relaxation of state aid rules to level the playing field.

Following the Washington visit, European leaders will hold a summit aimed at crafting a response to the US measures.

On Tuesday, Le Maire added the US and EU share the same strategic objectives of becoming more independent by creating new supply chains on hydrogen, chips, solar panels, batteries and electric vehicles among other items.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.