EXPLAINER: US-European differences on climate law persist

WASHINGTON — President Joe Biden on Thursday tried to allay concerns raised by French President Emmanuel Macron about a clean energy law that benefits electric vehicles and other products made in North America. But the U.S. and Europe remain divided over the landmark law.

Hours before hosting Macron at a state dinner. Biden acknowledged that the law contains “glitches,” but said “there are tweaks we can make” to satisfy France and other European allies.

“The United States makes no apology. And I make no apologies,” Biden said, but changes may be needed to the four-month-old law “to make it easier for European countries to participate.”

Macron has made clear that he and other European leaders are concerned about incentives in the law, known as the Inflation Reduction Act, that favor clean energy technology made in North America, including electric vehicles.

The U.S. subsidies would be an enormous setback for European companies, the French leader said, but he added that he is hopeful the dispute can be resolved amicably.

Despite Biden’s conciliatory words, several Democratic members of Congress said they have no plans to revisit the question in new legislation.

Here’s a look at the disagreement among European allies over clean energy and jobs.

WHAT IS THE MAIN POINT OF CONTENTION?

New and extended tax credits worth about $375 billion are intended to help the the U.S. clean energy industry, as well as buyers of qualifying electric vehicles made in North America. Democrats included the credits in the expansive climate law as a way to encourage domestic battery and electric vehicle production. But manufacturers in Europe and South Korea, who sell millions of vehicles in the U.S., have threatened to lodge legal complaints with the World Trade Organization.

“The choices that have been made … are choices that will fragment the West” and discourage U.S. investments in Europe, Macron said earlier during his visit to Washington. The climate law and major legislation boosting semiconductors were not properly coordinated with Europe and created “the absence of a level playing field,” he said.

Appearing with Biden at the White House Thursday, Macron was more upbeat. He said the U.S. and France would “resynchronize” their clean energy efforts to ensure there’s no “domino effect” that undermines projects in Europe.

WOULD THE EU HAVE A GOOD ARGUMENT AT THE WTO?

The Europeans likely would have a strong case if the dispute went…