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Climate and Environment

EU chief says bloc must act over US climate plan 'distortions'

Agence France-Presse
EU chief says bloc must act over US climate plan 'distortions'
Climate activists participate in a protest action in Glasgow on November 12, 2021, during the COP26 UN Climate Change Conference.
AFP/Ben Stansall

BRUSSELS, Belgium — EU chief Ursula von der Leyen said Sunday the bloc must act to address "distortions" created by Washington's $430-billion plan to spur climate-friendly technologies in the United States.

EU countries have poured criticism on Washington's landmark Inflation Reduction Act (IRA), seeing it as anti-competitive and a threat to European jobs, especially in the energy and auto sectors.

The bloc must "take action to rebalance the playing field where the IRA or other measures create distortions", von der Leyen said in a speech at the College of Europe in the Belgian city of Bruges.

The act, designed to accelerate the US transition to a low-carbon economy, contains around $370 billion in subsidies for green energy as well as tax cuts for US-made electric cars and batteries. 

Von der Leyen said the EU had to work with the US "to address some of the most concerning aspects of the law".

But she said that Brussels must also "adjust" its own rules to facilitate public investment in the environmental transition and "re-assess the need for further European funding of the transition".

French President Emmanuel Macron seized an opportunity on a state visit to Washington for talks with US President Joe Biden last week to air deep grievances over US-EU trade.

The White House touts the IRA as a groundbreaking effort to reignite US manufacturing and promote renewable technologies.

Commenting on the issue Sunday, French minister delegate for industry, Roland Lescure noted in a broadcast interview that "competition must be strong and fair -- we must coordinate to ensure we are on a level playing field.

Lescure added that US subsidies were distributed "a little more swiftly and effectively than ours."

By way of example, he said: "For an electric vehicle in the United States you have a $7,000 subsidy but it has to be American down to the circuitry.

"In France, you have 6,000 or 7,000 euros according to your wage and the vehicle can come from China."

CLIMATE CHANGE

EUROPEAN UNION

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