Economic officials in several US states have stepped up efforts to lure European clean energy companies across the Atlantic, touting the significant tax advantages offered to foreign developers despite the bitter backlash from European leaders.
Delegations from Michigan, Georgia, Ohio and other states scoured Europe armed with details of the juicy subsidies offered by the Cut Inflation Act, the landmark climate legislation administration of Joe Biden adopted in August.
“I don’t think we’ve actively recruited companies as intensely as we are now,” said Justin Kocher, director of international affairs for JobsOhio. Ohio officials have met with cleantech companies in Germany, Italy and Belgium over the past four months.
The IRA will provide around $370 billion in clean energy grants, marking the most ambitious US effort to tackle climate change, but has sparked heavy criticism in Brussels and allegations that states States discriminate against European companies.
Valdis Dombrovskis, EU trade commissioner, said last week that tackling climate change must be done by “building transatlantic value chains, not breaking them”.
But the campaign from US states and localities has intensified, including visits to the World Economic Forum in Davos last week by the governors of Michigan, Georgia and Illinois, as well as West Virginia Senator Joe Manchin. , a democrat who was one of the architects of the IRA. . Georgia Governor Brian Kemp, a Republican, was seen touting his state as a cleantech investment destination during a luncheon hosted by the forum.
“I was amazed by the many activities of state governments, business development agencies, state-owned business development agencies, which tried to attract us,” said Gunter Erfurt, managing director from Meyer Burger, a company based in Switzerland. solar module manufacturer.
Solarwatt, a German solar manufacturer, said it was recently recruited by Minnesota and Georgia.
“If the EU does not come up with something similar [to the IRA] then we can continue to expand abroad, in the United States in particular, instead of continuing to invest in Europe,” Erfurt added. The company has a US site in Arizona.
But European politicians were less impressed. Germany and France have expressed unease with the IRA. Belgian Prime Minister Alexander De Croo complained about the “very aggressive way” in which the United States presented him to European companies.
European Commission President Ursula von der Leyen told delegates in Davos that “the need to be competitive with the offers and incentives currently available outside the European Union” could lead the EU to relax its own restrictions on subsidies.
Since the IRA was passed, at least 20 new or expanded clean power manufacturing plants have been announced in the United States, according to the American Clean Power Association. More than half come from foreign companies.
In October, BMW announced it would spend $1.7 billion on new electric vehicle and battery manufacturing capacity in South Carolina. South Korean company Hanwha Q-Cells this month announced the expansion of a $2.5 billion solar plant in Georgia.
The US sales pitch shows few signs of ending.
Chris Camacho, chief executive of the Greater Phoenix Economic Council in Arizona, said “every state in the union” now competes to attract European companies.
“We are working with a number of European cleantech companies that are onboarding their model and expecting them to have access to these [IRA] funds,” he said.
Gretchen Whitmer, Governor of Michigan, an emerging hub for clean energy investment, led a state delegation on her first economic investment mission to Europe this month, including stops in Switzerland and in Norway.
Whitmer urged investors to “come to Michigan”, adding that alongside the recently passed Chips and Science Act – designed to boost US semiconductor production – the IRA would mean “we’re going to see a relocation of the manufacturing of the entire value chain”. .
Tom Jensen, chief executive of Freyr, a Norwegian battery company which announced a $2.6 billion battery factory project in Georgia in November, said Europe should implement its own subsidy scheme if it wanted to remain competitive.
“Europe has blamed the United States for being too slow” on climate policy and clean energy, Jensen said. “When they finally put the best climate mitigation policy on the table, they get criticized for it.”
The IRA adopted party lines, without a vote from Republicans in Congress. New clean energy investments announced since the law have been announced in states led by Democratic and Republican governors.
Georgia Governor Kemp’s press secretary said of his trip to Europe: “If there had been any mention of the Inflation Reduction Act, it would have been in relation to the troubling provisions that the governor continues to advocate for change.” He added that Kemp had traveled to Davos and Germany on an economic development mission to introduce Georgia to European businesses.
In Georgia, “clean energy was never quite . . . at the tip of [Governor] Kemp’s platform,” said Jason Shepherd, a political science professor at Kennesaw State University and former chairman of the Cobb County Republicans. “But Republican governors looking to increase investment in their states see where the future is, see where the business is going.”