US climate subsidies: Habeck relies on “full transparency”

The US wants to promote green technologies – possibly to the detriment of European companies. Economics Minister Habeck and his French colleague Le Maire expressed their concerns in Washington – and are now more optimistic.

The US government has promised full transparency with regard to the level of subsidies, said Economics Minister Robert Habeck at a joint press conference with his French colleague Bruno Le Maire in Washington. In the fight against climate change, the USA and the EU are dependent on each other.

“In order to strengthen this dependency and not let it escalate into competition with each other, concrete steps have been discussed. This includes creating transparency about how the various subsidy systems work,” said the Vice Chancellor. In this way, the interests of European industry could be defended and fair competition with the US ensured.

Working group to mediate

Previously, Habeck and Le Maire had met with Biden’s top economic advisor, Brian Deese, US Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo.

During the talks, it was agreed that a joint working group under the umbrella of the European-American Trade and Technology Council should try to reduce dependence on critical raw materials from other regions of the world, especially China. The European-American Trade and Technology Council has the task of finding solutions to the trade conflict between the USA and the EU.

According to Habeck, the specific regulations of the Inflation Reduction Act (IRA) are still being worked out. So you still have a few months to find solutions.

What is the Inflation Reduction Act?

The United States’ “Inflation Reduction Act” is a $370 billion aid program that aims, among other things, to strengthen renewable energies and industry in the fight against climate change. It is the United States’ largest subsidy package to date to combat global warming.

To receive funds from the bailout, companies must invest and manufacture in the United States. The EU reacted with alarm: The European Union fears that European companies could also relocate their production overseas to benefit from the subsidies.