EU chief says bloc has to address 'distortions' created by Biden environmental policies
Von der Leyen's comments echo other European business and political leaders who have criticized the IRA as being too protectionist
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European Union chief Ursula von der Leyen on Sunday warned that Europe must address distortions in the marketplace created by President Joe Biden’s Inflation Reduction Act (IRA), which heavily subsidizes green energy technologies.
Speaking to an audience at the College of Europe in the Belgian city of Bruges, von der Leyen said the EU must "take action to rebalance the playing field where the IRA or other measures create distortions."
European Commission President Ursula von der Leyen attends the weekly meeting of the EU Commission, Nov. 30, 2022, in Brussels, Belgium. (Thierry Monasse/Getty Images / Getty Images)
The IRA, passed in August, incentivizes the U.S.’ transition to a low-carbon economy, with tax cuts for U.S.-made electric cars and batteries and around $370 billion in subsidies for green energy.
Von der Leyen said the EU needs to work with the U.S. "to address some of the most concerning aspects of the law," but she qualified that Brussels needs to "adjust" its own rules to encourage public investment in green technologies and "[reassess] the need for further European funding of the transition."
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Her comments echo other business and political leaders in Europe who have criticized the IRA as being "protectionist."
Last week, French President Emmanuel Macron, who traveled to Washington for an official state visit, complained that subsidies meant to incentivize semiconductor production for electric vehicles have put European industries at an unfair disadvantage.
While he applauded the administration’s efforts to curb climate change, he said the subsidies as outlined in Biden’s Inflation Reduction Act would be an enormous setback for European companies.
President Joe Biden listens as French President Emmanuel Macron speaks during a state dinner at the White House on Dec. 1, 2022. (AP Photo/Andrew Harnik / AP Newsroom)
"The choices that have been made ... are choices that will fragment the West," Macron said. He said the legislation "creates such differences between the United States of America and Europe that all those who work in many companies [in the U.S.], they will just think, 'We don't make investments anymore on the other side of the Atlantic.'"
In a LinkedIn post earlier in the week, Volkswagen CEO Thomas Schäfer lamented that Germany and other European nations are "rapidly losing their attractiveness and competitiveness" while countries like the U.S., Canada and China are "forging ahead."
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"We have no time to lose," Schäfer wrote. "The EU urgently needs new investments to avert insidious de-industrialization and to maintain Europe’s attractiveness as a location for future technologies and jobs!"