EU in talks with US over European minerals’ addition in tax credits

The European Commission is working with the United States a plan to have extraction and procession of certain minerals to be included in the US’ clean vehicle tax credit in the Inflation Reduction Act.

The two parties kicked-off negotiations with a visit of Ursula von der Leyen in Washington, leading to the start of the Clean Energy Incentives Dialogue. The initiative will coordinate the incentive programmes between the US and the EU.

According to a statement on the dialogue, the cooperation between the two will help the goal of increasing "mineral production and processing and expanding access to sources." Another crucial point of the cooperation should grant "unwanted strategic dependencies."

The IRA poised some risks in Europe that companies will prefer to invest in the US rather than in the EU, with generous US incentives and subsidies that could lure EU companies like Enel, Solvay, EDP and Volkswagen to shift investments in North America. The Financial Times has already reported that Volkswagen will prioritize the construction of a battery plant in North America over one in eastern Europe due to subsidies and tax breaks over five years offered by the IRA.