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The European Union expects a deal with the United States in a dispute over battery subsidies

Brussels / Augsburg (dpa) – The European Union Commission expects to conclude an early agreement with the United States in the dispute over American subsidies for the production of electric car batteries. EU Trade Commissioner Valdis Dombrovskis of the Augsburger Allgemeine said this was “within reach”. “When it comes to raw materials for batteries, European companies should be treated in the same way as US free trade partners,” said the vice-president of the EU Commission. We still have big differences in renewable energies and hydrogen. We still have work to do.”

The former Latvian Prime Minister confirmed that the United States and the European Union are still trying to defuse many points of disagreement over the American “inflation reduction law”. March is a crucial month. Dombrovskis said the US Treasury Department would then issue guidance on the plans and see what was achieved.

Many points are still open

According to him, there was “good agreement” on tax deductions for American electric cars: “The rental of electric cars should be exempted from the discriminatory requirements of the Inflation Reduction Act. This also helps European companies that provide services to the United States.” However, there are still many open spots.

The Inflation Reduction Act (IRA) in the United States is a law that also provides high tax incentives for electric vehicles and renewable energies. The US support package, which is scheduled for ten years, has a size of $370 billion (currently €346 billion).

European Union countries fear that the IRA program could give the United States a competitive investment advantage. For this reason, several countries, including Germany, have called for a relaxation of the European state aid law in order to preserve production sites in Europe. In the future, the EU wants to allow member states more targeted subsidies to companies so they can compete with the United States and China in climate-friendly technologies. Assistance procedures must become simpler and faster.

© dpa-infocom, dpa: 230223-99-702427/3