The European response to the Inflation Reduction Act

Mar. 16, 2023

Europe – Under the Inflation Reduction Act (IRA), the US industry is to be decarbonized. Of concern from the EU's point of view is that the extensive subsidies reduce production costs in green technologies and, to the detriment of the EU, increase the attractiveness of the USA as a location for investment and production. The EU has responded to the IRA with the Green Deal Industrial Plan. The framework includes, among other things, the Net-Zero Industry Act. This new piece of legislation describes various measures that are intended to increase the attractiveness of investment in eight selected key technologies while at the same time prescribing the EU as a production location.

NEXT STEP: The Net-Zero Industry Act still requires the approval of the European Parliament and the Council of the EU.

Source: European Commission

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