Ursula von der Leyen, president of the EU Commission, declared on Sunday that she is adamant about fighting back against American subsidies for green technologies and moving through with a rule that would phase out combustion engines by 2035 but is presently being stalled.
In the beginning of a two-day meeting close to Berlin, von der Leyen paid a visit to German Chancellor Olaf Scholz and the cabinet. He claimed that the U.S. Inflation Reduction Act (IRA) will result in significant tax benefits for domestic production of clean technology.
“We have discussed our answers: negotiations with the U.S. about interpreting the law, investments of our own, and speedier processes,” she told reporters at Meseberg near Berlin.
European electric carmakers had been given access to U.S. tax advantages but the EU needed to ensure they also benefited in the batteries and battery component segments, where more talks were needed with Washington, she said.
European legislative action within a fortnight would propose to unleash European aid and funds so far not used for the green transition at home, she said.
A Commission report on competitiveness, due at the same time, would help lower barriers inside the internal EU market and address shortages of specialised labour, which von der Leyen called a “brake on growth.”
Separately, fresh from agreeing trade deals with New Zealand and Chile, the EU is seeking deals with Australia, Mexico and the Latin American Mercosur bloc by the end of 2023, she said.
Scholz and von der Leyen said that trade agreements were also being eyed with Indonesia and India.
Commenting on the delay to ending sales of new CO2-emitting cars in the EU in 2035 after Germany questioned its support for the policy, she said the issues could be resolved.
“It has to be in balance with our climate goals on which there is agreement,” she said. “The discussion is constructive.”
Von der Leyen also said the EU was keeping a close watch on whether China sticks to commitments not to help arm Russia in the Ukraine war. “We are monitoring this every day,” she said.