It was in August of this year that US President Joe Biden and the Democrats got the inflation reduction act (IRA) through Congress. 369 billion dollars, equivalent to 3,800 billion kroner, will be spent on subsidies to companies with low carbon dioxide emissions. The new law is applauded by, among others, the former vice president and environmental activist Al Gore.
Internationally, complaints have come from several quarters. The law makes it difficult for green European industry to compete with the American one, say the critics.
Macron: “Huge setback”
Ahead of his meeting with Joe Biden at the White House, French President Emmanuel Macron said the president’s efforts to reduce climate change were welcomed, but that the law was a huge setback for European companies.
According to Jan-Olof Jacke, CEO of Svensk Näringsliv, it is not fundamentally about taking a stand against the EU.
– Rather, it is probably the case that the USA expects a response from the EU, he says and adds:
– It is probably more aimed at China from the US side.
Risks – and opportunities
Even in Sweden, several green companies may be affected by competition from the heavily subsidized industry in the USA. Other Swedish companies see opportunities – and are considering moving their operations there instead.
– There are some things in this that you should appreciate, says Jan-Olof Jacke.
– It is a clear change of direction towards being more of a leader in climate change.
Difference between EU and US strategies
Swedish companies that move to the US also get a share of the subsidies, given that they have a large enough share of American components as inputs, according to Jacke.
– This means that a large number of companies in Europe today have, in a fairly short period of time, started to look over their plans about where their investments should end up.
What does Swedish business want to be done from the EU and the Swedish side so that Swedish, green, companies will not be outcompeted by those in the USA?
– What we see now is a very big difference in the EU’s strategy and the US’s strategy. The US is very clearly into incentives, carrots. The EU is much more into regulation.
– We have to think in the EU about what our competitiveness strategy should be going forward.