The European Union and the United States achieve a breakthrough in supporting green technology | Economy

The agreements, which still need to be worked out, should provide a solution to a long-running dispute over US subsidies for green technology. European Union countries felt the demands amounted to US protectionism.

Last year, Biden managed to pass the so-called IRA through the US Congress, which includes subsidies and tax credits worth $ 430 billion (more than 403 billion euros). One of the important goals of this law is to halve carbon emissions before 2030. The country wants to tackle the climate crisis and promote renewable energy.

But in Europe, there are concerns that because of the attractive IRA schemes, even European companies would prefer to invest in the US and therefore not put money into developing production capacity in the EU.

Electric vehicle batteries, for example, require a lot of metals and minerals. Europe wants it to be mined here too, but if the US prefers that material from its own country, it could be bad for the European industry. The question is whether the agreement can also count on the support of US politicians.

EU officials say the United States and Europe should stay together as allies and form a common front against bigger threats from China.

The European Commission introduced its green industry plan last month in response to the US IRA bill, with more government aid to help Europe compete as a manufacturing hub for clean technology products.