Germany and France say “substantial progress” made in green subsidy talks with U.S.

The German and French economy ministers said “substantial progress” has been made in talks about transparency and cooperation on green subsidies between the EU and the U.S during a visit to Washington,  newspaper Die Zeit reported. German economy and climate minister Robert Habeck, together with French economy minister Bruno Le Maire, visited the U.S. on 7 February to advocate for “joint green lead markets” for climate-friendly technologies instead of competing for investments through state intervention. Habeck said they had agreed to “create transparency on how the different subsidy systems work and how the amounts are to be roughly measured,” with the U.S. promising to keep the EU informed about its subsidy plans. Additionally, a “critical raw materials club” should reduce the dependence on important raw materials from other regions of the world, Habeck announced.

Further negotiations are forthcoming within the EU, whose heads of state are set to meet on 9 and 10 February to discuss a proposed policy package aimed at making investments in low carbon technologies in Europe more attractive. The block fears competitive disadvantages for its companies due to the U.S. government’s Inflation Reduction Act (IRA), which seeks to lure investment to the country by granting tax rebates and other subsidies. Although the IRA would be laudable for its clear focus on climate action, the green subsidy programme worth over 300 billion dollars poses grave dangers for Europe's industry and the transatlantic partnership, the EU countries argue. State leaders hope to relax rules on subsidies in favour of climate protection and the energy transition, as well as simplify and speed up frameworks for state aid.