BRUSSELS – The United States is “well positioned” to reach a deal with the European Union before the end of 2023 to allow critical minerals mined or processed in Europe to qualify for U.S. clean vehicle tax breaks, a senior U.S. treasury official said on Monday.
The transatlantic partners are about to negotiate whether and how EU critical minerals can qualify for the subsidies under the U.S. Inflation Reduction Act (IRA), which has caused concern in Europe over its bias towards U.S. production.
The IRA includes lithium, graphite and nickel as critical minerals.
“Our hope is to make progress in the coming weeks, with before the end of the year concluding some type of critical mineral agreements with our allies and partners here in Europe,” the treasury official said.
The United States signed a deal with Japan in March. Now, both the EU and Britain are looking for the same. The U.S. already included countries with which it has a free trade agreement.
EU governments are expected to agree on a negotiating mandate for the European Commission this month.
“I think we’re well-positioned to conclude this as quickly as they’re able to move, mindful of the fact that we need to do something that’s consistent with the Inflation Reduction Act and with our domestic requirements,” the official said.
The official said an agreement would need to include enforceable standards on labour and the environment.
“The reality is that what we’re calling on the EU to do is consistent with what the EU has already done, so that’s why I’m so confident we can get the agreement done relatively quickly,” the official said.