US Vice President Joe Biden and European Commission President Ursula von der Leyen are anticipated to decide to start talks to ensure the European Union has a status similar to that of a free trade agreement. The leaders are scheduled to meet in Washington.
The US and EU were working to make European minerals eligible for tax credits under the US$430 billion US Inflation Reduction Act. According to this law, increasing amounts of battery minerals must originate in the US or from an FTA partner.
According to a US Treasury spokesman, the department, which is in charge of the EV tax credits at the center of the controversy, would assess any recently reached agreements to make sure they satisfy the tax credit’s requirement for critical minerals during the rulemaking process.
“Strongering our supply chains for critical minerals along with like-minded partners is vital for the growth of the clean energy economy given the extremely high concentration of Chinese control over critical mineral extraction globally,” the spokesman said.
The spokesman added that collaborating with allies to lessen US reliance on China for essential minerals would increase US energy and economic security.
Critical minerals for batteries are eligible for tax credits of up to $3,750 (S$5,077) per vehicle, which go into effect once US Treasury guidance, which is anticipated later in March, is released.
The US Internal Revenue Service provision that mandates that EVs must be assembled in North America in order to qualify for consumer EV tax credits has drawn vehement criticism from the EU, South Korea, Japan, and other US allies.
However, the EU applauded a US Treasury Department decision in December to permit consumer leases of EVs to be eligible for commercial clean vehicle tax credits of up to US$7,500. REUTERS
