Dáil Éireann Debate, Wednesday - 15 February 2023
36. Deputy Seán Haughey asked the Minister for Enterprise, Trade and Employment if he has considered the implications for Ireland and the EU regarding the US Inflation Reduction Act 2022; and if he will make a statement on the matter. [7543/23]
View answerThe Inflation Reduction Act includes a tax incentive encouraging US consumers to buy electric vehicles that are produced in the US and meet “local-content” requirements and a range of subsidies to encourage the adoption of clean and green technology. The Act provides for $369bn of subsidies in the area of Electric Vehicles, batteries, hydrogen production and renewable energy.
The full implications of the US legislation on Ireland and EU will take time to analyse, and the Government has been working with the EU Commission and other Member States to understand the implications for Europe and to develop appropriate policy responses.
An EU-US taskforce on the Inflation Reduction Act was launched on 25 October 2022. The taskforce provides a specific platform to address the EU’s concerns on the problematic elements of the Inflation Reduction Act and is led by officials from the White House and Commission President von der Leyen’s cabinet. The taskforce is expected to continue meeting regularly until March 2023, when the final implementation guidelines are due to be issued by the US Department of the Treasury.
While acknowledging that Europe must ramp up its existing climate change efforts, we must ensure that we continue to collaborate with our US counterparts. We recognise that the EU-US taskforce on the Inflation Reduction Act is working hard to address EU concerns and other constructive bilateral engagements which we believe will be beneficial to Europe in the longer term.
Earlier this month, the EU Commission published a new industrial strategy: A Green Deal Industrial Plan for the Net-Zero Age. This strategy is far-reaching, touching many policy areas across government. The strategy proposes a new Green Deal Industrial Plan for the EU, to set out the path for Europe to climate neutrality and being a global leader in the net-zero industrial age. Investments in renewable energy including hydrogen, decarbonising industry and electric vehicle battery technology are all covered.
Europe requires a robust strategy for decarbonising industries, but this needs to be paired with a fiscal plan that ensures that a relaxation of State Aid rules can benefit every Member State, not just wealthy Member States.
Equally, the EU must not be drawn into, nor contribute to, a subsidies war. Rather, as we transition to net zero, we look for the EU to become the home of industrial innovation. Ireland believes that our Union should take common action, focusing in particular on a competitive business environment, access to finance and skills and talent investment. The need to develop clean technologies, renewable energy sources and improved digital capacity are central to Ireland’s own White Paper on Enterprise Strategy to 2030, which Government launched last December.
My officials and I have been engaging with colleagues in the EU Commission and other Member States to ensure that Ireland's interests are represented in any trade responses or State Aid policy changes.
