Visit to Sweden: Habeck open to tax benefits for companies

In response to a US subsidy program worth billions, Economics Minister Robert Habeck wants to break new ground in the EU and strengthen its competitiveness.

Visit to Sweden: Habeck open to tax benefits for companies

In response to a US subsidy program worth billions, Economics Minister Robert Habeck wants to break new ground in the EU and strengthen its competitiveness. Europe must do its homework, said the Green politician on Thursday at the start of a two-day trip to Sweden. "We must remain competitive or become again."

Habeck called a proposal by the EU Commission on tax breaks for companies investing in climate-friendly technologies interesting. Tax advantages could be a way for companies to invest more quickly, he made clear in Stockholm. Habeck spoke of the outline of a "strong and robust" EU response to the US Inflation Reduction Act program. Habeck said it was important to develop "green lead markets" in the EU.

Because of this US subsidy program worth billions, the EU fears competitive disadvantages. The US lures companies with subsidies. Companies could now produce in the US rather than in Europe.

Travel to Washington next week

Sweden currently holds the EU Council Presidency. Habeck wants to explore common ground in talks with Swedish government officials. He told the "ProSieben Sat.1 Nachrichten" that Europe needs a robust response to American subsidies. That's what he's promoting in Sweden.

The visit to Sweden also serves to prepare Habeck's US trip to Washington starting Monday. There he wants to present the EU's position on the Inflation Reduction Act to the US government together with his French colleague Bruno Le Maire.

"I think we have a good chance of avoiding a trade dispute, some say a trade war," Habeck said. The US and the EU must work together. "Actually, we should be able to build a green bridge across the Atlantic, especially in the industrial sector." Cooperation in a trade and technology council between the US and the EU could be the "nucleus" of a kind of joint industrial agreement.

Swedish Economy Minister Ebba Busch called the US Inflation Reduction Act a serious risk for the European economy. But it's not about waging a trade war with the US.

Habeck: Faster procedures, broader funding

Habeck's visit to Stockholm comes a day after European Commission President Ursula von der Leyen proposed multi-billion dollar investments in climate-friendly technologies as the EU's response to the US program. Procedures in the EU would have to be significantly faster, said the Economics Minister. He also made it clear that funding would have to be spread more widely in order to reduce technological dependencies on Asia, for example. In addition to the production of semiconductors and solar modules, Habeck also mentioned battery production.

Habeck also wants to advertise in Sweden that the Swedish battery manufacturer Northvolt is building a factory in Schleswig-Holstein. On Friday he wants to visit one of the company's research laboratories and meet Northvolt boss Peter Carlsson there. Northvolt had signaled that construction of the factory could be delayed. The company cited local electricity prices and higher subsidies in the United States as reasons.

The business minister said Northvolt had looked across Europe for a location and "basically" chose Heide, mainly because of the large amount of renewable energy. The Inflation Reduction Act with the formula that cars have to be produced in the USA if they get the subsidies there opened up this "basic decision" again. Habeck said Northvolt is still open to the Heide location. The decision will be made in the first quarter. Habeck said he wanted to advertise again in Sweden how suitable and how important the Heide location was - "but also what Germany is willing to do to make this location possible".

Regarding the question of a possible industrial electricity price in Germany and Europe, Habeck said that the possibility that electricity or electricity access could be given preferential treatment to companies had to be approved under state aid law. This is a part that is missing from the package presented by the EU Commission in response to the Inflation Reduction Act. Companies like Northvolt, which are investing now, want to know what electricity price they will get in two or three years. "We have to decide this year how we're going to do it, and then it can happen next year or the year after that."