U.S. and EU should aim for “joint green lead markets”, France and Germany to advocate

The economy ministers from France and Germany will use their planned visit to the U.S. on Tuesday (7 February) to advocate for “joint green lead markets” for climate-friendly technologies instead of competing for investments. Following the U.S. government’s Inflation Reduction Act (IRA) that seeks to lure investment to the country by granting tax rebates and other subsidies, the EU last week presented its own Green Deal Industrial Plan meant to make investments in low carbon technologies in Europe more attractive. “The U.S. gears its economy towards green markets and pushes cost reduction for developing climate-friendly technologies,” German economy and climate minister Robert Habeck said. “That’s a good thing, but it’s important that this happens in a friendly and fair competition and leads to progress in climate neutral technologies,” he argued. Given the geopolitical tension resulting from Russia’s war on Ukraine and recurring diplomatic disputes with China, closer cooperation between the EU and the U.S. could be a decisive factor for reducing dependencies and increasing resilience on both sides of the Atlantic, Habeck said. Together with his French minister colleague, Bruno Le Maire, Habeck said the goal was to convince the U.S. that a joint approach regarding green investments is mutually beneficial. “Our economies are closely linked with the American economy,” Habeck said, which is why France and Germany had a special responsibility to support the EU Commission in upholding transatlantic trade. 

France and Germany have been acting in concert to come up with a European response to the IRA since it was announced in late 2022. Although the IRA would be laudable for its clear focus on climate action, the green subsidy programme worth over 300 billion dollars posed grave dangers for Europe's industry and the transatlantic partnership, the EU countries argued.