US and EU to strategise EV mineral incentives
Amid ongoing competitive regulatory moves, US president Joe Biden and European Commission president Ursula von der Leyen met Friday to enable EU-extracted critical minerals to count towards IRA credits.
This meeting between the powerhouse leaders saw a joint commitment towards diversifying critical mineral supply chains and enabling EU-extracted resources for Electric Vehicles (EVs) to count toward Inflation Reduction Act (IRA) EV tax credits.
According to a joint EU-US press release, the two will cooperate on “diversifying critical mineral and battery supply chains, recognising the substantial opportunities on both sides of the Atlantic to build out these supply chains in a strong, secure and resilient manner.
“To that end, we intend to immediately begin negotiations on a targeted critical minerals agreement for the purpose of enabling relevant critical minerals extracted or processed in the European Union to count toward requirements for clean vehicles in the Section 30D clean vehicle tax credit of the Inflation Reduction Act.”
This is hoped to reduce strategic dependence on such supply chains and generate more public and private investment in clean energy technologies.
Critical mineral supply chains have been proving a core area of concern for the clean energy transition; earlier this year in January, the International Energy Agency identified diversification of supply chains as crucial within a clean energy-based economy.
Competitive regulation
The meeting also brought about the Clean Energy Incentives Dialogue, a dual coordination of clean energy industrial bases to strengthen future investments.
At the heart of the Dialogue is investment into clean energy technologies, especially EVs and clean hydrogen, which has become an area of regulatory competition between the EU, the US and China.
Biden’s IRA announced last year became a regulatory game changer for the country’s energy transition, placing the US high on the list as an investment landscape.
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China, on the other hand, invested $546 billion in 2022 across solar and wind energy, EVs and batteries, surpassing both the US and the EU.
The EU’s response was the recently announced Green Deal Industrial Plan, which the Commission hopes will enable it to regain a competitive edge against both.
The joint Dialogue therefore aims to ensure that clean energy investments from the EU and US do not clash.
In the release, they state that the Dialogue aims to “coordinate our respective incentive programmes so that they are mutually reinforcing.
“Both sides will take steps to avoid any disruptions in transatlantic trade and investment flows that could arise from their respective incentives. We are working against zero-sum competition so that our incentives maximise clean energy deployment and jobs – and do not lead to windfalls for private interests.”
The Clean Energy Incentives Dialogue will form part of the EU-US Trade and Technology Council, where it will also facilitate information-sharing on non-market policies and practices of third parties—such as those employed by the People’s Republic of China (PRC).
