GREEN CAPITALI$M

US hopes Europe will join 'race to top' on green subsidies

Reuters
Tue, September 26, 2023 at 11:51 AM MDT·2 min read

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BERLIN (Reuters) - The United States hopes Europe will take similar measures to its Inflation Reduction Act to drive a "race to the top" on support for green technologies, a senior U.S. official said in Berlin on Tuesday ahead of economic talks with German counterparts.

The two sides will hold broad-ranging discussions on issues like managing the risks of artificial intelligence, diversifying supply chains, and Ukraine's reconstruction, Jose Fernandez, under secretary for economic growth, energy and the environment at the State Department, told a news briefing.

The United States understood European Union concerns about the Inflation Reduction Act (IRA), which provides massive subsidies for the domestic manufacturing of green tech, he said. But it had pointed out the technology would benefit all and the green transition required all hands on deck.

"We can't do this alone. We hope Europe will take similar measures to encourage a race to the top," he said, noting that Washington was still working with Brussels on a critical minerals deal that would enable EU companies to better take advantage of U.S. green subsidies.

Asked about concerns about weakness in the German economy, Fernandez said its track record as an engine of the European economy for decades with a competitive export industry should give observers reason to be optimistic about its long term prospects.

"You've heard the statement don't bet against the United States? I would say the same thing about the German economy," said Fernandez, who will attend the talks in the chancellery on Wednesday.

Asked about the extent to which the United States and Europe are converging in their approach towards China, Fernandez said there was a consensus on certain issues like the need to diversify supply chains.

"But you are always going to have views that may not necessarily be opposing but just different nuances," he said. "So I can't point to anyone but the Europeans make up their own minds."

(Reporting by Sarah Marsh; Editing by Mark Potter)