U.S. green tech subsidies threaten investments in Europe.

When they visit Washington next week to voice worries about U.S. green tech subsidies, the economy ministers of France and Germany will instruct senior U.S. officials not to actively seek to snatch up green investments from Europe, according to two French officials.

Bruno Le Maire of France and Robert Habeck of Germany are expected to voice their concerns in Washington on tax credits provided by the United States Inflation Reduction Act, which subsidizes goods like solar panels and electric cars so long as they adhere to local production criteria.

In addition to Treasury Secretary Janet Yellen, Trade Representative Katherine Tai, and Commerce Secretary Gina Raimondo, the two are scheduled to meet with White House representatives on Tuesday, according to the representatives from France’s economy ministry.

Governments in the EU are concerned that the tax credits could be deliberately exploited to entice investment away from Europe and toward the United States, as well as unfairly harm European producers.

“One of the ministers’ messages will be to avoid contacting European firms about relocating their facilities to the United States. Everyone will have ample space to invest in both Europe and the United States, “added one official. The objective, according to the second source, is to prevent “aggressive pitches” to EU businesses to invest in the United States.

After the European Commission already achieved a partial victory regarding electric vehicles built outside of North America qualifying for tax credits if leased by consumers, the first official claimed that there was little room for further concessions from Washington for better treatment of EU companies.

However, according to the first official, the ministers are trying to persuade American officials to be more lenient on local production requirements for vital materials used in electric vehicle batteries.

Both officials stated that they will seek a U.S. commitment to be open about the assistance businesses receive under the Inflation Reduction Act.

This is crucial because it could decide the amount of state assistance that European businesses can receive under a proposal by the European Commission to permit the matching of third-country subsidies in Europe.