Raw Material & Ukraine Conflict: Biden Holds Talks With EU Commission Head Amid Strained Ties

US President Joe Biden and European Commission President Ursula von der Leyen met on Friday at the White House, later issuing a joint statement noting the two countries will negotiate a deal to allow European materials to be used in electric vehicles that are eligible for US tax credits.

The Friday meeting between the two leading world figures also geared toward various economic issues, as well as the conflict in Ukraine.

Trade, Climate & Raw Materials

The United States had angered some allies in Europe by including a clause in the Inflation Reduction Act that required EV batteries to be created using materials sourced from the US or a country the US has a free-trade agreement with. It also stated that 50% of the components inside the EV had to be manufactured in the US with that percentage rising to 100% by 2028.

“We have agreed that we will start work now with a clear goal,” von der Leyen told reporters after the meeting. “The goal is to have an agreement on critical raw materials that have been sourced, or processed in the European Union so that these strategic supply chains are able to access the American market as if they had been sourced in the United States. So, also access to all the necessary benefits from the United States."

“It is important on both sides of the Atlantic to know what kind of incentives are being given to the clean tech industry, to make sure that we join forces to boost the clean tech industry,” von der Leyen added. “That is crucial and paramount for reaching a circular economy, a net zero economy."

Last year, partially in response to Biden’s Inflation Reduction Act, the European Commission passed the Green Deal Industrial Plan. In their joint statement Biden and von der Leyen said that the two deals both have the same goals of “addressing the climate crisis, accelerating the global clean energy economy, and building resilient, secure, and diversified clean energy supply chains.”

The joint statement also said the US and EU should remain united in actions they take to counter China, the industry leader in electric vehicles.

“The Clean Energy Incentives Dialogue will become a part of the EU-US Trade and Technology Council where it will also facilitate information-sharing on non-market policies and practices of third parties—such as those employed by the People’s Republic of China (PRC)—to serve as the basis for joint or parallel action and coordinated advocacy on these issues.”

Biden and von der Leyen also pledged to reach an agreement in the Global Arrangement on Sustainable Steel and Aluminum negotiations by October of this year.

“The arrangement will ensure the long-term viability of our industries, encourage low-carbon intensity steel and aluminum production and trade, and restore market-oriented conditions globally and bilaterally,” the joint statement reads.

“Together, we will incentivize emission reductions in these carbon-intensive sectors and level the playing field for our workers. The arrangement will be open to all partners demonstrating commitment to countering non-market excess capacity and reducing carbon-intensity in these sectors.”

Ukraine

On Russia’s special military operation in Ukraine, Biden and ver don Leyen said they are working to stop “additional third-country actors across the globe” who support Russia in the conflict.

Von der Leyen also stressed Europe’s continued support of Ukraine. “We have extensively discussed [the conflict in Ukraine], starting with the financial budget support that the European Union is giving 18 billion [euros] during this year, one and a half billion [euro] per month to Ukraine, but also discussing the way we are caring for four million refugees from Ukraine in the European Union.”

She also expressed gratitude to the United States for selling Liquified Natural Gas (LNG) to Europe after western sanctions limited the supply of Russian gas.

“[The US] helped us enormously when we wanted to get rid of the Russian fossil fuel dependency,” ver don Leyen said in remarks made before the meeting. “You helped us enormously by delivering more LNG, [you] helped us through the energy crisis.”

In October, senior officials from France and Germany accused the United States of overcharging the European Union for natural gas and profiting from the energy crisis in Europe, with French Finance Minister Bruno Le Mair noting that Europe was paying four times the amount domestic US companies were paying for LNG.