Washington — President Biden and European Commission President Ursula von der Leyen met Friday to try to complete a plan that the White House hopes will turn the page on a spat between the U.S. and European Union over electric vehicle tax credits.
In a joint statement after the meeting, Mr. Biden and von der Leyen said they agreed to open negotiations between the U.S. and the EU on a deal that could boost the use of European minerals critical in the production of electric vehicle batteries that are eligible for U.S. tax credits through Mr. Biden’s roughly $375 billion clean energy law that passed last year, according to White House officials.
Mr. Biden at the start of the meeting said he and von der Leyen would discuss “driving new investments to create clean energy industries and jobs and make sure we have supply chains available” for both continents.
Mr. Biden and von der Leyen were also expected to use their Oval Office meeting to discuss Western coordination to support Ukraine in the war against Russia, joint efforts to decrease Europe’s dependence on Russian fossil fuels and the Biden administration’s growing concerns that China is considering providing weaponry to Russia for use in the war.
The Treasury Department said in a statement that an agreement “with like minded partners” could help provide a measure of “security and stability by ensuring the United States and allies and partners are not reliant on China for critical minerals.” White House officials hope an agreement with the EU can be reached soon, but also plan to consult members of Congress, labor groups and others with a stake in the outcome.
Treasury Secretary Janet Yellen, testifying Friday before the House Ways and Means Committee, said the administration is trying create “surgical agreements” that “permit our close allies to also contribute minerals and their processing” for use in electric vehicles that are assembled in North America.
“This is going to be a vast and growing market,” she said.
Von der Leyen and other European leaders have voiced opposition to incentives in the Inflation Reduction Act that Mr. Biden signed in August that favor American-made electric vehicles. The legislation stipulates that for U.S. consumers to be eligible for a tax credit of up to $7,500 on their EV purchase, the EV’s battery must largely contain minerals from the U.S. or a country with which the U.S. has a free-trade agreement. Additionally, 50% of components in batteries must be manufactured or assembled in North America by 2024, with that percentage rising gradually to 100% by 2028.
The European Commission, in part, responded by launching its own Green Deal Industrial Plan l ast month in response to Mr. Biden’s legislation. The measure is expected to make it much easier to push through subsidies for green industries and pool EU-wide projects.
“I think it’s great that there is such a massive investment in new and clean technologies now,” von der Leyen said, referring to the U.S. Inflation Reduction Act. “Indeed, we want to match it with the Green Deal Industrial Plan.”
James Batchik, assistant director of the Europe Center at the Atlantic Council, said the U.S. and EU “getting on the same page” is an important step “to avoid a subsidy war.”
That said, a resolution will depend on the details of any future agreement, Batchik added.
Mr. Biden stood by the policy that favors American EVs when French President Emmanuel Macron, a critic of the legislation, visited Washington late last year. Mr. Biden, however, acknowledged “glitches” in the legislation and said there were “tweaks we can make” to satisfy allies.
Ensuring access to critical minerals has been top of mind at the White House as administration officials aim to promote American electric vehicle manufacturing and other clean energy technologies.
Mr. Biden last year announced he was using the Defense Production Act to boost production of lithium and other minerals used to power electric vehicles. Experts said the move by itself is unlikely to ensure the robust domestic mining the Democratic president seeks as he promotes cleaner energy sources.
Mr. Biden’s order directed the Defense Department to consider at least five metals — lithium, cobalt, graphite, nickel and manganese — as essential to national security and authorizes steps to bolster domestic supplies.
The U.S. and the EU have remained largely in lockstep throughout the Russian war, coordinating sanctions against Moscow and the delivery of weaponry to Kyiv. The leaders were expected to use Friday’s Oval Office meeting to spotlight that Western unity.
Mr. Biden was also expected to raise U.S. intelligence findings that show that China is considering sending weapons to Russia to help prosecute the war in Ukraine.
The White House says Beijing has yet to deliver weapons to Russia but is more seriously weighing the prospect as Russia has burned through ammunition in a conflict that has gone on much longer than Russian President Vladimir Putin anticipated.
European nations have had a less adversarial relationship with China than the U.S. has, but that has been evolving since the start of the war.
This week the Dutch government announced it would join the U.S. in imposing export restrictions aimed at limiting China’s access to materials used to make advanced processor chips. In a speech before the German parliament last week, Chancellor Olaf Scholz called on China to “use your influence in Moscow to press for the withdrawal of Russian troops, and do not supply weapons to the aggressor Russia.”
A European official, who was not authorized to comment publicly and insisted on anonymity, said that Western allies are taking seriously U.S. warnings that China could be edging toward sending Moscow arms, because many of the publicized U.S. intelligence findings throughout the war have proved to be true.
The official, however, noted that reputational — and potential economic — costs of providing weapons to Russia seem to outweigh any benefits for Beijing.