President Joe Biden and top EU official Ursula von der Leyen announced on Friday the start of negotiations on granting access to European producers seeking to export critical minerals for electrical vehicle batteries under a new US programme to stimulate the green economy.
“We intend to immediately begin negotiations on a targeted critical minerals agreement for the purpose of enabling relevant critical minerals extracted or processed in the European Union” to qualify for the US government subsidies under Mr Biden's signature Inflation Reduction Act stimulus plan, they said in a joint statement.
Batteries are a vital part of the US plan for massive expansion of electric vehicle production. The Inflation Reduction Act sets aside about $370 billion for tax credits and clean energy subsidies, but contains a “made-in-America” requirement for qualification.
European leaders have grown worried that EU-based energy and car companies will be shut out or move to the US.
The aim of the critical mineral talks will be to provide one significant exemption for the EU.
“Today we agreed that we will work on critical raw materials that have been sourced or processed in the European Union and to give them access to the American market as if they were sourced in the American market. We will work on an agreement,” Ms von der Leyen told reporters after meeting Mr Biden.
In their joint statement, the two leaders stressed that the Inflation Reduction Act and new European initiatives meant to mirror the programme, such as the Green Deal Industrial Plan, should work in tandem.
“Both sides will take steps to avoid any disruptions in transatlantic trade and investment flows that could arise from their respective incentives,” the statement said.
“We are working against zero-sum competition so that our incentives maximise clean energy deployment and jobs — and do not lead to windfalls for private interests.”