The European Union facilitates state aid for investments in green technologies until the end of 2025. On Thursday in Brussels, the EU Commission announced a temporary relaxation of the so-called state aid rules. Among other things, Brussels is reacting to the multi-billion investment package USA.
The announcement came on the eve of a meeting between EU Commission President Ursula von der Leyen (64) and US President Joe Biden (80) on Friday in Washington. It should also be about the Inflation Reduction Act (IRA), which the US Congress passed in the summer. It provides around $370 billion (almost €350 billion) in subsidies for green technologies that must be manufactured in the United States.
Among other things, the IRA also promotes the settlement of electric car and battery cell factories in the USA. It is envisaged that an increasing proportion of critical raw materials for battery production will come from the USA or from countries with which the USA has a free trade agreement. The United States has such agreements with its neighbors Canada and Mexico.
The EU Commission and Member States such as Germany and France Washington had therefore accused protectionism and discrimination against European companies. Von der Leyen is likely to continue trying to get exceptions in Washington, for example for European manufacturers of car batteries.
EU subsidies only “in exceptional cases”
According to the temporary rules now presented, EU countries can, in “exceptional cases”, compensate for subsidies in other countries with their own state aid for domestic industry. The prerequisite is “a real risk that investments will flow out of Europe”, as the Commission explained. In Germany, too, there were fears that companies might move to the USA.
Most recently, von der Leyen had always emphasized that the EU also wanted to counter Chinese subsidies with the exception rules. The meeting between von der Leyen and Biden is also likely to be about the political stance on Beijing and further support for the Ukraine go.