# EU, US working on deal to make EV minerals eligible for tax credits -EU official
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-03
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: US and EU Close to Deal on Tax Credits for European Minerals
Meta Description: US and EU close to a deal granting European minerals tax credits to boost battery production.
URL: https://financedigest.com/eu-us-working-on-deal-to-make-ev-minerals-eligible-for-tax-credits-eu-officialhtml

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By Andrea Shalal and David Shepardson

WASHINGTON (Reuters) -The United States and European Union are working toward agreement in principle on a deal to make European minerals eligible for tax credits, a senior EU official said Friday.

The $430 billion U.S. Inflation Reduction [Act passed in August requires rising percentages of battery minerals to come](https://www.financedigest.com/the-glorious-twelfth-what-underwriters-should-be-doing-as-the-insurance-act-comes-into-force.html "The Glorious Twelfth: What Underwriters Should Be Doing As the Insurance Act Comes Into Force") from the United States or a Free Trade Agreement (FTA) partner.

The EU official said an agreement could [come as early as next](https://www.financedigest.com/whats-coming-next-in-the-clearing-and-settlement-world.html "What’s coming next in the clearing and settlement world?") week, in time for a visit by European Commission President Ursula von der Leyen to Washington, on a deal that would give the EU “free trade agreement-like status.

White [House press secretary Karine Jean-Pierre declined to say](https://www.financedigest.com/buy-off-plan-to-beat-stalling-house-prices-and-falling-rental-yields-says-jean-liggett.html "“Buy off-plan to beat stalling house prices and falling rental yields” says Jean Liggett ") if a high-level deal that would provide free trade-like status to the EU could be reached before von der Leyen’s visit, removing an irritant in U.S.-EU ties, but underscored Washington’s desire to [maintain a strong working](https://www.financedigest.com/alone-together-how-to-maintain-a-positive-company-culture-while-working-remotely.html "Alone together: How to maintain a positive company culture while working remotely") relationship with the EU.

“Of course, we want to make sure there’s a good working relationship,” she said.

Up to $3,750 per [vehicle of the available tax credits](https://www.financedigest.com/tax-credits-for-eu-electric-vehicles-to-dominate-mondays-trade-talks-with-u-s.html "Tax credits for EU electric vehicles to dominate Monday’s trade talks with U.S") relate to critical minerals for batteries, taking effect when the U.S. Treasury [issues guidance](https://www.financedigest.com/canadian-securities-administrators-issue-guidance-regarding-cryptocurrency-offerings.html "Canadian Securities Administrators Issue Guidance Regarding Cryptocurrency Offerings"), which is expected later this month.

The EU official said it was critical to [reach an agreement](https://www.financedigest.com/adnami-signs-agreements-with-schibsted-and-amedia-to-deliver-high-impact-ads-with-unparalleled-reach-across-the-nordics.html "Adnami signs agreements with Schibsted and Amedia to deliver high impact ads with unparalleled reach across the Nordics") soon, given moves by some European companies to shift production to the United States.

We need to react now, and we need to at least avoid as much as possible these disturbances, by granting an FTA-like status, and having better access when it comes to raw materials, [battery production](https://www.financedigest.com/flooded-lead-acid-battery-regional-landscape-production-sales-consumption-status-and-prospects.html "Flooded Lead Acid Battery Regional Landscape, Production, Sales & Consumption Status and Prospects"), for example.

He said the U.S. side was pressing for the agreement to be “legally binding,” but it would be difficult have that in place ahead of [von de Leyen’s](https://www.financedigest.com/eu-will-propose-windfall-levies-on-energy-firms-von-der-leyen-says.html "EU will propose windfall levies on energy firms, von der Leyen says") visit. I think that commitment to do this, and to do it quickly, could well be an outcome of [next week’s](https://www.financedigest.com/china-arrivals-in-uk-next-week-will-not-face-compulsory-covid-tests-independent.html "China arrivals in UK next week will not face compulsory COVID tests -Independent") discussions.

The agreement would be limited, the official said.

We’re not talking about [market access](https://www.financedigest.com/fico-and-efl-partner-to-extend-access-to-credit-for-unscoreable-consumers-and-entrepreneurs-in-multiple-markets.html "FICO and EFL Partner to Extend Access to Credit for “Unscoreable” Consumers and Entrepreneurs in Multiple Markets") here … This would be very reduced and certainly not a free [trade agreement in the classical way,”](https://www.financedigest.com/social-trading-is-the-new-way-that-gen-z-are-getting-their-share-of-the-pie.html "Social Trading is The New Way That Gen Z Are Getting Their Share of The Pie") the official said.

The EU, [South Korea](https://www.financedigest.com/south-korea-has-not-supplied-lethal-weapons-to-ukraine-president-says.html "South Korea has not supplied lethal weapons to Ukraine, president says"), Japan and other U.S. allies have harshly criticized the IRA’s provision requiring EVs to be produced in [North America to qualify for consumer EV tax](https://www.financedigest.com/top-north-east-financial-adviser-firm-talks-corporation-tax.html "Top North East financial adviser firm talks corporation tax") credits.

But the EU in December praised a U.S. Treasury Department decision to allow EVs leased by [consumers to qualify for up to $7,500 in commercial clean vehicle tax](https://www.financedigest.com/germany-to-lower-sales-tax-on-gas-to-7-in-bid-to-relieve-consumers.html "Germany to lower sales tax on gas to 7% in bid to relieve consumers") credits.

(Reporting by Andrea Shalal; additional reporting by Trevor Hunnicutt; writing by David Shepardson; Editing by Kirsten Donovan)


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