Von der Leyen calls for EU to ‘adapt’ state-aid rules in answer to US green subsidy scheme

Von der Leyen calls for EU to ‘adapt’ state-aid rules in answer to US green subsidy scheme

POLITICO — 2022-12-04

News from Brussels

European Commission President Ursula von der Leyen said today the EU should adapt its state-aid rules in response to the United States' massive subsidy package for green energy.

Von der Leyen said the EU needs to act to avoid investments being drawn across the Atlantic by US President Joe Biden’s $369bn Inflation Reduction Act (IRA), which will offer support to sustainable industries in America, in particular electric vehicles.

“The Inflation Reduction Act should make us reflect on how we can improve our state-aid frameworks, and adapt them to a new global environment,” von der Leyen said in a speech in Bruges, Belgium. “The new assertive industrial policy of our competitors requires a structural answer.”

The IRA program has divided opinions in Brussels, with Internal Market Commissioner Thierry Breton pushing for a more assertive EU industrial policy in response, while the bloc’s competition chief, Margrethe Vestager, has warned against a “tit-for-tat” reaction.

Some reply to the US’s initiative is necessary, von der Leyen said.

“We need to do our homework in Europe and at the same time work with the U.S. to mitigate competitive disadvantages,” the Commission president said.

Commission officials have been trying to persuade the Biden administration to adjust the IRA package so that EU companies can also be eligible for the American aid. Their next chance comes on Monday when the EU-US Trade and Technology Council meets.