12 months ago • 2 mins
The EU’s reportedly planning some new green subsidies to outshine the US's allure.
What does this mean?
The EU’s got a problem, and its name is Uncle Sam – especially his deep pockets. See, the US boasts a $369 billion package of subsidies and tax incentives for green tech, and that’s got some European companies eyeing up life stateside. Cue panic among EU policymakers, who are worried the sweet Yankee dollar will deprive them of industries they’ve nurtured for years. Volkswagen, the world’s second-biggest carmaker, is a prime example. The firm announced this week that it’s putting plans for an Eastern European battery plant on hold and prioritizing a facility in the US instead – where it could claim over $10 billion in incentives. But the EU’s reportedly hitting back, making it easier for member states to match US subsidies in a last-ditch attempt to keep firms on European soil.
Why should I care?
Zooming in: Grand theft auto.
The US and EU are squabbling over all kinds of sectors, but Europe’s especially protective of its all-important auto industry. After all, the region’s home to some of the world’s biggest car manufacturers. And it’s cradling some valuable EV jewels too: the bloc accounts for a quarter of global EV production and 20% of the supply chain, while the US’s figures are less than half that size. Ceding that position would hit the region’s struggling economy hard, meaning the embattled EU has little choice but to cough up or shut up for now.
The bigger picture: Seeing green.
This development might have EU bureaucrats in tears, but it bodes well for the green transition – and for the world at large. The Human Development Index, which measures how long and well folk live, has been dropping off in recent years. (Yup, you’re not just aging: life actually is getting worse.) Climate change is one key culprit – but developments like this could help keep it in check.
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