London – Norwegian startup Freyr is the first to manufacture batteries to power electric vehicles and store clean energy in remote towns near the Arctic Circle. next? suburb of Atlanta.

that is New US Clean Energy Act CEO Tom Einar Jensen said the company offers generous tax credits worth up to 40% of costs as a “huge incentive” to produce in the United States.

Across Europe, companies invest in green energy Boom — mass-producing everything from solar panels to windmills to EV batteries — makes similar calculations, squeezing the $375 billion in the U.S. Inflation Reduction Act. Benefits for the renewable industry It opposes the piecemeal response that European leaders have struggled for months to patch together.

The legislation is intended to begin the transition for the United States to move away from fossil fuels that cause climate change. Tax credits and rebates in favor of clean tech Made in North America.

When it became law in August, it blinded Europe and set the US on course to overtake the continent in the global push to cut carbon emissions. anger European leaders Rules that give preferential treatment to U.S. products could sap green investment from Europe and ignite a subsidy race.

of European Union executives responded with plans It aims to ensure that at least 40% of clean tech is produced in Europe by 2030, and to limit the amount of strategic raw materials from a single third country (usually China) to 65%.that Negotiations with President Joe Biden also begin On making European minerals for EV battery manufacturing eligible for US tax credits.

Executives looking for the most money they can get to boost their businesses praise the simplicity of the US program. EU plans overwhelmed, confused and bureaucraticThis puts Europe at risk of falling behind in the transition to green energy. Auto industry shifts to EV.

Thomas Schmall, Volkswagen’s director and technology overseer, posted on LinkedIn: “The terms of the IRA are so attractive that Europe risks losing out on the competition for billions of investments to be decided in the coming months or years.”

Volkswagen announced last month that its new PowerCo battery business will build its first EV battery cell gigafactory outside of Europe in St. Thomas, Ontario. The Canadian plant, which is set to open in 2027, is expected to benefit from the IRA due to provisions for US neighbors and the US. free trade partner canada and Mexico.

Meanwhile, the German auto giant has reportedly put a decision on a battery plant in Eastern Europe on hold while waiting for more information on its EU plans. Volkswagen did not respond to a request for comment.

Another Scandinavian battery startup, Sweden’s Northvolt, was poised to build its third gigafactory in northern Germany. Forced into a moratorium by US law, it is considering new EU proposals before deciding where to locate its facilities next month.

EU is Strict control of state aid to companies This is to avoid distorting competition in the single market of the 27-country bloc. Germany and France — much bigger and richer than the rest. But in order to compete with the United States, the EU has eased these restrictions on clean industries, making a fundamental change from Brussels’ longstanding view that governments should take a non-interfering approach to the free market. showed.

European business leaders say US incentives could upend global ways of producing technology.

“it was build cars in america But sometimes the engine and other parts come from Europe. The IRA casts doubt on this model. Because we need to manufacture in the US,” said Luisa Santos, deputy director of the Brussels-based lobbying group BusinessEurope.

“You may be closer, but the cost will be much higher,” she warned. “Will consumers be willing to pay?”

Italian energy giant Enel gave credit to the IRA in November when it announced plans to build a large solar panel factory in the United States.

Enel’s plant initially had a capacity of 3 gigawatts. solar panel and cell, eventually expanding to 6 GW. The plant is expected to be operational by the end of 2024.

Not only in Europe. Asian companies also want to be part of the IRA.

South Korean tech giant LG last month announced plans to build a $5.5 billion battery production. Arizona ComplexIt said it was the largest single investment in North America’s independent battery manufacturing facility in history.

To Establishment of a manufacturing system in the United StatesLG is “aiming to meet the rapidly growing need for locally manufactured batteries behind the IRA,” the company said.

Factory operation schedule making electric car batteries By 2025, one year later for batteries for energy storage systems.

Freyr has grown from its first battery gigafactory in Mo i Rana, northern Norway, to its second battery gigafactory in Coweta County, Georgia, with a cost of $1.7 billion each.

“Producing batteries on both sides of the Atlantic is important because our customers and supply chain partners want us to work in both locations,” Jensen said at the opening of Mo i Rana’s pilot plant. Because we want to exist in

In an interview, he said the IRA offers tax credits of up to $45 on the typical manufacturing cost of a battery ($110 to $115 per kilowatt hour).

of IRA Stokes So Much Demand For stand-alone energy storage systems like the one Freyr makes—large battery banks that utility companies use to store renewable-generated electricity—the company has set a U.S. completion date for 2025. , Jensen said.

Frey is now trying to figure out “how can we make it even faster?” That’s because “our customers are craving locally produced batteries,” which gives them a unique incentive, Jensen said.

“Of course, it increases the demand for our products,” he said.