Biden and EU’s von der Leyen to meet amid subsidies dispute

4:37 pm Thursday, March 02nd, 2023

(Reuters) – European Commission President Ursula von der Leyen will discuss clean energy and supply chains with President Joe Biden in Washington on March 10, the White House said, as European nations worry that new U.S. subsidies will hurt their economies.

Biden’s Inflation Reduction Act (IRA), a $430 billion bill that offers massive subsidies for U.S.-made products and is aimed at addressing the climate crisis and promoting renewable energy, has prompted European anger.

“They will … discuss U.S.-EU coordination to combat the climate crisis through investing in clean technology based on secure supply chains,” the statement said.

On Thursday, U.S. Treasury Secretary Janet Yellen spoke with European Commission Vice President Valdis Dombrovskis about the roll out of the law’s funds and the need to promote green energy in both hemispheres, her office said.

Dombrovskis said in a tweet that the discussion with Yellen on the IRA was constructive. “We progressed discussions on EU’s #IRA concerns, and possibility of securing privileged status for EU on raw materials,” he said in the tweet.

During a December visit by France’s President Emmanuel Macron to the White House, Biden said that bills aimed at boosting U.S. renewable energy and the semiconductor industry have “glitches” that can be addressed.

The European Commission last month presented its Green Deal Industrial Plan in response to the U.S. measure, with increased levels of state aid to help Europe compete as a manufacturing hub for clean tech products.

The pair will also take stock of a joint task force on energy security that was set up a year ago to help reduce EU dependence on Russian fossil fuels, the White House statement said, and discuss challenges posed by China.

Washington and its allies have said in recent weeks that China was considering providing weapons to Russia, which Beijing denies. Aides to Biden have not publicly provided evidence.

(Reporting by Kanishka Singh; Writing by Costas Pitas; Editing by Tim Ahmann and Diane Craft)