Von der Leyen calls for looser EU state aid rules

The president of the European Commission has called for a relaxation in state aid rules for green tech in response to the US Inflation Reduction Act.

Writing to the European Union’s 27 leaders on Wednesday, Ursula von der Leyen proposed temporarily adjusting the rules for renewable energy, decarbonising industrial processes and clean-tech.

The changes - which could come into force from the start of 2023 - would, she argued, "make it easier for public investment" and create a "simpler, faster and even more predictable" state aid framework.

"Supporting the clean transition is the right thing to do, if you are doing it right," she tweeted.

"In a transparent manner. In a spirit of cooperation. And in a way that ensures a level playing field. It should be a race against time. Not against each other."

President Joe Biden’s $369bn Inflation Reduction Act (IRA) is intended to support green technology by giving tax credits to consumers buying green products such as electric vehicles as long as they are made in the US. It has sparked concern in Brussels that European companies could be tempted to relocate to America.

EU leaders will discuss how to best respond to the legislation at a summit on Thursday, while talks between Brussels and Washington are ongoing.