Wednesday, March 29, 2023

Europe stands up to the US: more support for electric cars and batteries

The On the reduction of the law of growth (IRA) US President Joe Biden signed in August seeks to guarantee equity among citizens after the economic damage caused by Covid 19. The state includes subsidies for certain industries, such as the automobile sector. This is the largest climate and energy package, which is the starting point for a regulatory certainty gap that will triple the size of the US global energy industry.

The immediate consequence of this arrangement is that the US will attract billions of dollars of foreign money, that is making a difference in the plans of Europewhich needs to be boosted by the electrification of the car industry. Although the regulations are now at another point of controversy, the truth is that the European Parliament has approved a ban on the sale of combustion cars from 2035 and a reduction of 55% of emissions from 2030.

The EU Commission has adapted the rules governing state aid to the US IRA; simplifying the approval of concessions in key sectors such as batteries and renewable energy. The amendment gives EU members more leeway to provide public funds in the form of grants, credits or taxes.

In cases in which the risk of relocation is high, with the consequent loss of funds; offset subsidies from a non-European government to try to keep the company in the EU. The Commission last Thursday, March 9, reviewed the revised rules on state aid under the title “The framework of crisis management and temporary change”. Therefore, a temporary modification, which will be applied from the beginning until the end of the year 2025. The preliminary amendment of the current survey and consultation of member states, that is, it includes the comments of the world, the Commission carries. EU

Volkswagen was the last to announce that plans to build factories in Eastern Europe had been temporarily shelved.

New legislation changes

The Commission, considering its state aid rules, decides the extent to which a member state can support the development of individual economic sectors “under certain conditions”. These parts should be economical Europe’s common universal interest. The main subsidy projects examined in recent times include subsidies for charging network expansion or the start-up of large battery production facilities.

Since the Russian invasion of Ukraine and the industrial crisis, European rules on state aid have already relaxed somewhat. Now the European Commission is going even further by giving the member more options prevent green technology companies from migrating to the US. With the introduction of the US government’s Growth Reduction Act, several companies, such as Volkswagen in Eastern Europe, have inclined to consider the United States as their first choice.

“The rules on state aid, and especially the Temporary Crisis Framework, give the member the ability to offer state aid, in a fast, clear and predictable way,” he explained. Margrethe VestagerThe executive chairman is in charge of the competition policy. “Our rules can help accelerate net-zero investment in this critical time, while leveling the playing field in the single market and safeguarding the objectives of coherence.” “The new rules are proportionate, specific and temporary,” he added.

Nation World News Desk
Nation World News Desk
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