1 of 3 | President of the European Commission Ursula von der Leyen wants a bloc-wide package that will rival the green energy subsidies outlined in the U.S. Inflation Reduction Act. Photo by Oliver Contreras/UPI |
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Jan. 17 (UPI) -- The economies that move to develop the clean-energy technology of tomorrow will be among the first to have a competitive edge, European President Ursula von der Leyen said Tuesday in a nod to green subsidies in the U.S. economy.
Von der Leyen said from the World Economic Forum in Davos, Switzerland, that the bloc needs a comprehensive net-zero subsidy package to counter the green energy spending outlined in U.S. President Joe Biden's signature Inflation Reduction Act.
"The next decades will see the greatest industrial transformation of our times -- maybe of any times," she said. "And those who develop and manufacture the technology that will be the foundation of tomorrow's economy will have the greatest competitive edge."
Von der Leyen's proposed Net-Zero Industry Act calls for increased investments, a skills-based move to accelerate the pivot away from fossil fuels and fast-tracking some of the permitting processes for clean-energy technology.
"To get ahead of the competition, we need to keep investing in strengthening our industrial base and making Europe more investment- and innovation-friendly," von der Leyen said. "This is what investors are looking closely at in the different global markets for clean tech."
Her proposal comes amid criticism that the $369 billion green subsidy package from Washington is creating an uneven playing field. The law provides U.S. consumers with incentives for purchasing new and second-hand electric cars, heat pumps to warm their homes and electric connections to cook foods, among other subsidies. Some of those incentives require a U.S.-made manufacturing base.
EU members said they feared the tax breaks created by the Inflation Reduction Act could draw business away from Europe and potentially lead to a trade war.
Von der Leyen in December said the "Buy American" approach and tax breaks could "lead to discrimination" against European companies. It's "no secret," she said Tuesday, that parts of the U.S. green subsidy plan are a concern.
"Our aim should be to avoid disruptions in transatlantic trade and investment," she said. "We should work towards ensuring that our respective incentive programs are fair and mutually reinforcing."
A joint task force was created last year to address some of the trade concerns stemming from the passage of the U.S. Inflation Reduction Act.
