European Union and US officials are starting negotiations on critical raw materials to find a way of making EU sourced/processed material eligible for US incentives and benefits, Kallanish reports.

European Commission President Ursula von der Leyen met US President Joe Biden on Friday in Washington, DC, to discuss a way forward under the Inflation Reduction Act (IRA). Following a “very constructive” meeting, they agreed to work to give the EU critical raw materials access to the American market “as if they were sourced in the American market,” according to President von der Leyen.

In a joint statement, the parties said the US and the EU share the most comprehensive and dynamic economic relationship in the world. Through the so-called EU-US Task Force on IRA, the parties have deepened their partnership and taken practical steps forward on identifiying challenges to align approaches on strengthening and securing supply chains, manufacturing and innovation on both sides of the Atlantic, it adds.

A few weeks ago, the task force reached an agreement concerning certain EU-made electric vehicles accessing IRA tax credits and incentives. It will now work to diversify critical mineral and battery supply chains “in a strong, secure, and resilient manner.”

Both the US and the EU want to reduce “unwanted strategic dependencies” in these supply chains, and to ensure that they are diversified and developed with “trusted partners.”

Additionally, the heads of state said they recognise the need to “make bold investments” to build clean energy economies and industrial bases, including EV batteries and clean hydrogen. That’s why they launched the Clean Energy Incentives Dialogue to coordinate their respective IRA and EU Green Deal Industrial Plan incentive programmes “so that they are mutually reinforcing.”

“Both sides will take steps to avoid any disruptions in transatlantic trade and investment flows that could arise from their respective incentives,” the statement reads. “We are working against zero-sum competition so that our incentives maximise clean energy deployment and jobs—and do not lead to windfalls for private interests.”

It’s unclear when the parties expect an agreement to be reached. The EU should publish its Critical Raw Materials Act and the Net-Zero Industrial Act on 14 March.

The bloc is risking an investment exodus if it can’t match the generous incentives given under IRA.