UK Minister Shapps Says US Climate Law May Create Unfair Competition

(Bloomberg) -- President Joe Biden’s new climate and tax law “inadvertently” includes elements of unfair competition, UK Business Secretary Grant Shapps said, adding to criticism of a measure that risks causing a trans-Atlantic trade rift.  

European leaders have already said the law, known as the Inflation Reduction Act, unfairly subsidizes American companies. The EU has said it may take the US to the World Trade Organization over the measure.

“I know the WTO and others will be very interested in the way that assistance is being offered, and I know that there will be some discussions,” Shapps told a parliamentary committee on Tuesday. “Inadvertently there may have been some unfair competition elements.”

The legislation, a key component of Biden’s agenda, includes energy tax credits, climate programs and environmental mandates. But critics, including French President Emmanuel Macron, have warned that it could fragment the West. He and Biden have agreed to agreed to “fix” the issues borne out of the law, Macron said last week. 

Read: Macron Says US Climate Legislation Is ‘Not Friendly’

Britain is actively trying to spur investment in its own clean energy sector, with the goal of achieving net zero emissions by mid-century. The UK on Tuesday announced £25 million in funding for new technologies that will generate clean hydrogen from biomass and waste. The US law provides green hydrogen producers with tax credits of as much as $3 a kilogram.

The UK “up until now” has had a strong lead in the hydrogen sector but doesn’t intend to give that up “lightly or easily,” Shapps said. “I wouldn’t think an act passed within the last three months overturns years of very good work in getting ahead in this field.”

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