Europe Tempers Criticism Of Biden's Green Subsidies

 Europe again has too many talking heads to make prompt decision.

"BRUSSELS -- Europe is dialing back its criticism of U.S. clean-energy subsidies, after months of denunciations of the measures contained in a package of climate, tax and healthcare legislation signed by President Biden last year.

European Union Executive Vice President Margrethe Vestager, one of the bloc's leading voices on the issue, said in an interview that a closer analysis of the subsidies suggests the main threats to European competitiveness will be limited to a handful of sectors.

She also said that some European companies may be drawn to invest in the U.S. over their home continent by the measures, but she expects their decisions will be based on more than just the new American subsidies.

"If people think that it's easy to do business in the U.S. just because of the ease of getting a subsidy, they're wrong," Ms. Vestager said. She pointed to permitting challenges for big projects, like wind farms or electric-vehicle battery factories, which can be hard on both sides of the Atlantic. "I think there's a lot of detail to add to the equation," she said.

The Danish politician has been at the helm of Europe's competition policy for nearly a decade, emerging as a force in regulating large, mostly American, tech companies such as Google parent Alphabet Inc. and Amazon.com Inc. She is now leading part of the bloc's response to the Biden administration's Inflation Reduction Act, which includes $369 billion in funding for clean energy. Her remarks come amid a broader rethink across European industries and within governments about and how to respond to the IRA.

After the U.S. bill was signed into law last year, some European leaders railed against the made-in-America provisions attached to some of its clean-energy subsidies. Those provisions mean some of the subsidies are available only for goods made in the U.S. or North America, or for those containing locally sourced raw materials. French President Emmanuel Macron called for a "Buy European" response that could channel the bloc's own subsidies to domestic manufacturers.

The EU's internal markets commissioner, Thierry Breton, who is French, pulled out of a high-level meeting with U.S. officials in December, piqued by what he said was a lack of willingness to discuss European concerns with the IRA.

Since then, Brussels has proposed the measures it says will help boost the attractiveness of the continent to businesses being lured by the U.S. subsidies. The European Commission, the bloc's executive body, set out options this month, including loosening the rules for EU member government subsidies and speeding up permitting.

Those moves have reassured some European business leaders. Ignacio Galan, executive chairman of Spanish renewable giant Iberdrola SA, said this week that he thinks the European response is moving in the right direction.

He said the bloc had previously allocated nearly as much money to encouraging a green-energy transition as the U.S. did through the IRA.

Ms. Vestager said in the interview that the IRA's subsidies for renewable hydrogen, for instance, include made-in-America provisions, but those might not have a significant impact on Europe's industry.

"The U.S. subsidy is quite generous, but hydrogen is not easy to transport," she said.

Several European companies have announced plans to expand their U.S. footprint after the IRA's passage.

Italian energy company Enel SpA, for example, said last fall that it was planning a new solar manufacturing plant that it said could be among the largest of its kind in the U.S.

The U.S. subsidies could also "pause the acceleration of green industries in Europe," creating a risk that some investments ultimately won't go through, Ms. Vestager said.

Simone Tagliapietra, a senior fellow with Brussels-based think tank Bruegel, said only about $40 billion of the $369 billion in the IRA's clean-energy spending risks serious harm to European industry because of the made-in-America provisions.

"We need to calibrate the European response in an adequate manner to what really is in the IRA," Mr. Tagliapietra said. "And I think the situation is not as dramatic as initially thought by many."" [1]

Ms. Vestager sounds like fox in the woods talking about sour grapes, doesn't she?

1. World News: Europe Tempers Criticism Of Biden's Green Subsidies
Kim Mackrael.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 25 Feb 2023: A.9.