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EU takes on US subsidies.

 

Europe
Brus­sels has cleared the way for a sub­sidy race with the US over cru­cial tech­no­lo­gies, allow­ing EU mem­ber states to «match» mult­i­bil­lion-dol­lar incent­ives as they fight to keep projects in Europe.

The over­haul pub­lished by the European Com­mis­sion yes­ter­day will, for the first time, jus­tify large-scale pub­lic fund­ing for green projects because sim­ilar incent­ives are offered out­side Europe, a rad­ical depar­ture in how state sub­sidies have been policed within the bloc.

The meas­ures will release states to pump bil­lions of euros into the pro­duc­tion of solar pan­els, bat­ter­ies, wind tur­bines, elec­tro­lys­ers and heat pumps. It is await­ing an EU response after estim­at­ing it could receive €10bn in US incent­ives to build a plant in North Amer­ica.

The plan was unveiled as Ursula von der Leyen, com­mis­sion pres­id­ent, pre­pares to meet Joe Biden in Wash­ing­ton today. They are expec­ted to dis­cuss Europe’s requests for its com­pan­ies to be gran­ted bene­fits under the IRA, which offer big sub­sidies to busi­nesses invest­ing in green tech­no­lo­gies in the US.

The guidelines place some con­di­tions on per­mit­ted aid. Brus­sels will allow EU coun­tries to match sub­sidies up to the point where the project would be fin­an­cially viable in Europe, an effort to avoid pub­lic money sup­port­ing excess profit.

The request must be from one mem­ber state in a less wealthy region or from a group of three coun­tries, where at least two are in a less developed area.

This reflects cri­ti­cism from south­ern and east­ern mem­ber states that by relax­ing state aid rules, the com­mis­sion would, in effect, allow the wealth­i­est coun­tries, not­ably Ger­many and France, to sub­sid­ise their indus­tries to the det­ri­ment of oth­ers.

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Comments

  1. Quentin10 March 2023 at 10:36

    Finally some measures that might work. It remains to be seen if they do end up working but it's good that there is movement in this area.

    ReplyDelete
    Replies
    1. Stan10 March 2023 at 12:26

      The EU needs to find ways to work with the US and not constantly complain about those subsidies. Hopefully this is the start to a good way ahead for everyone.

      Delete

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