https://sputnikglobe.com/20230705/us-energy-and-tech-subsidies-frustrating-europes-clean-energy-efforts-1111681178.html
US Energy and Tech Subsidies Frustrating Europe’s Clean Energy Efforts
US Energy and Tech Subsidies Frustrating Europe’s Clean Energy Efforts
Sputnik International
Europe is losing jobs to America in cutting edge fields, including hydrogen, a clean-burning fuel that can serve as an alternative to fossil fuels that pour carbon dioxide and other gases into the atmosphere as they are consumed.
2023-07-05T17:30+0000
2023-07-05T17:30+0000
2023-07-05T17:30+0000
world
european union (eu)
hydrogen
clean energy
inflation reduction act
chips
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Europe is losing jobs to America in cutting edge fields, including in the production of hydrogen, a clean-burning fuel that can serve as an alternative to fossil fuels that pour carbon dioxide and other noxious gases into the atmosphere as they are consumed.Vollodal’s firm, which produces hydrogen fuel cells to power automobiles, recently announced it had changed its plans, opting instead to open a $500 million production facility in the US instead of Norway. The electrolyzer “gigafactory” that will open in conjunction with Michigan-based General Motors will be one of the world’s largest, producing four gigawatts of hydrogen each year.For Vollodal, there are a number of reasons behind this move.“There’s not one single driver behind the decision to put it in the US,” Vollodal said, noting that between the IRA and the CHIPS Act, the company was looking at more than $400 billion in financial benefits from jumping across the Atlantic.The Biden administration signed both bills into law in August 2022, providing a mountain of government funding and tax cuts for firms that invest in clean energy-related industries, such as hydrogen power, as well as wind and solar, or in the production of electric vehicles, as well as in high-tech fields such as artificial intelligence and the production of high-end microchips. The IRA also provides funds for cleaning up dirty sites such as coal mines and capping gas wells.But the efforts have angered US allies in Europe, including French President Emmanuel Macron, who has repeatedly accused the US of unfair practices by introducing the heavy subsidies. When the French leader paid a visit to Washington last December on the heels of another round of criticisms, the White House claimed its intent was not to hurt European industry and that the IRA could be “tweaked” to include European allies.However, Macron’s criticisms of the IRA resumed and were joined by other European Union leaders, such as European Council President Charles Michel."We sincerely hope the dialogue with American friends will lead to concrete positive results. Let's be clear, in my opinion, European companies must be able to benefit from the same conditions as Canadian and Mexican companies. But dear colleagues, we must look reality squarely in the face. Our American ally is embracing a massive state aid policy and China continues to invest state money in its technology sector," Michel told a plenary session of the European Parliament in January.In a sense, sparking a hydrogen power revolution almost requires some kind of financial help. Manufacturing hydrogen is almost twice as expensive as liquid natural gas, and shipping it can be 10 times as expensive. Those costs are why experts have noted that while the US is attracting investment from European companies, it would be hard for the US to translate that into future exports to Europe that would choke out a domestic European market.However, it’s not as if there is no investment in Europe: while Nel is building its new facility in Michigan and expanding another in Connecticut, it is also doubling the size of its facility in Herøya, Norway, from 500 megawatts to one gigawatt, and fully automating it.
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hydrogen; inflation reduction act; chips act; eu; subsidies
hydrogen; inflation reduction act; chips act; eu; subsidies
US Energy and Tech Subsidies Frustrating Europe’s Clean Energy Efforts
The passage of the Inflation Reduction Act (IRA) by the US Congress in August 2022 set in motion a showdown with Europe over the extensive subsidies offered to high-tech and clean energy industries that intended to kick-start the United States’ transition to a carbon-neutral economy and safeguard its position as a world leader in tech.
Europe is losing jobs to America in cutting edge fields, including in the production of hydrogen, a clean-burning fuel that can serve as an alternative to fossil fuels that pour carbon dioxide and other noxious gases into the atmosphere as they are consumed.
“A year ago, the EU clearly had the yellow jersey,” Håkon Volldal, CEO of Norwegian energy firm Nel, told US media recently, making reference to the shirt worn by the fastest cyclist in the Tour de France. “Now the US has it.”
Vollodal’s firm, which produces hydrogen fuel cells to power automobiles,
recently announced it had changed its plans, opting instead to open a $500 million production facility in the US instead of Norway. The electrolyzer “gigafactory” that will open in conjunction with Michigan-based General Motors will be one of the world’s largest, producing four gigawatts of hydrogen each year.
For Vollodal, there are a number of reasons behind this move.
“There’s not one single driver behind the decision to put it in the US,” Vollodal said, noting that between the IRA and the CHIPS Act, the company was looking at more than $400 billion in financial benefits from jumping across the Atlantic.
“On top of that, you have subsidies for renewable power and so on. Europe is dwarfed by the numbers we see in the US,” he added.
The Biden administration signed both bills into law in August 2022, providing a mountain of government funding and tax cuts for firms that invest in clean energy-related industries, such as hydrogen power, as well as wind and solar, or in the production of electric vehicles, as well as in high-tech fields such as artificial intelligence and the production of high-end microchips. The IRA also provides funds for cleaning up dirty sites such as coal mines and capping gas wells.
The laws are aimed at shuffling the US toward reducing carbon dioxide emissions as part of its pledges to curb the industrial causes of global warming, but they’re also aimed at keeping the US ahead in the high-tech race, particularly against the People’s Republic of China, which has also seen many of its leading firms sanctioned by the US Treasury, blocking their ability to conduct business in the US market.
But the efforts have angered US allies in Europe, including French President Emmanuel Macron, who has repeatedly accused the US of unfair practices by introducing the heavy subsidies. When the French leader paid a visit to Washington last December on the heels of another round of criticisms, the White House claimed its intent was not to hurt European industry and that the IRA could be “tweaked” to include European allies.
However, Macron’s criticisms of the IRA resumed and were joined by other European Union leaders, such as European Council President Charles Michel.
"If Europe does not respond, accelerating the 'greening' of the US economy will mean the deindustrialization of Europe,”
he said during a Barcelona appearance alongside Spanish Prime Minister Pedro Sanchez in January.
4 December 2022, 23:59 GMT
"We sincerely hope the dialogue with American friends will lead to concrete positive results. Let's be clear, in my opinion, European companies must be able to benefit from the same conditions as Canadian and Mexican companies. But dear colleagues, we must look reality squarely in the face. Our American ally is embracing a massive state aid policy and China continues to invest state money in its technology sector,"
Michel told a plenary session of the European Parliament in January.
In a sense, sparking a hydrogen power revolution almost requires some kind of financial help. Manufacturing hydrogen is almost twice as expensive as liquid natural gas, and shipping it can be 10 times as expensive. Those costs are why experts have noted that while the US is attracting investment from European companies, it would be hard for the US to translate that into future exports to Europe that would choke out a domestic European market.
However, it’s not as if there is no investment in Europe: while Nel is building its new facility in Michigan and expanding another in Connecticut, it is also doubling the size of its facility in Herøya, Norway, from 500 megawatts to one gigawatt, and fully automating it.
