Von der Leyen and Biden to talk green incentives and China’s threat

Good morning. At least seven dead and more wounded in a shooting at a Jehovah’s Witness centre in the German city of Hamburg last night, German media reported. Police believe the lone gunman killed himself.

Today, after five years of Brexit-soured relations, French president Emmanuel Macron hosts British prime minister Rishi Sunak for their countries’ first bilateral summit since 2018. Read our scene-setter on hopes of a reset and this great story on why arsenic in Northern Ireland could re-toxify EU-London relations.

Here, our Brussels bureau chief previews another key meeting: European Commission president Ursula von der Leyen’s visit to the White House, and we have news of Bulgaria’s egregious flaunting of pollution rules.

Smiles and subsidies

Ursula von der Leyen and US president Joe Biden meet today to set aside some of the transatlantic rancour unleashed by the $369bn US Inflation Reduction Act, writes Sam Fleming.

Context: The Biden administration’s massive green subsidies scheme has provided an unwelcome counterpoint to the united front the EU and US have shown since Russia’s invasion of Ukraine. EU member states fear it will put their companies on the back foot and lead to an intercontinental subsidies race.

The EU is not expecting significant concessions on the IRA, given there is no prospect of the law being rewritten. But European companies could at least share in some of the benefits.

The US has already indicated that its $7,500 electric vehicle tax credit will be available for cars made in the EU and sold under commercial lease deals to consumers in the US.

And the EU remains hopeful that it could be included in provisions for battery components sourced from countries that have free trade deals with the US — although this is likely to remain a work in progress.

The far bigger worry when it comes to government handouts, however, is not the US but China, as von der Leyen herself has indicated. Last month she accused China of lavishing “hidden subsidies” on its industry, vowing to develop a broader strategy to deal with it.

That includes bolstering the EU’s homegrown supplies of critical raw materials, smoothing regulatory barriers for green tech, as well as yesterday’s announcement of a relaxation of state aid rules.

There are also early-stage discussions of EU controls on outbound investments — something the US is also examining — alongside beefed-up trade defences and checks on investments by foreign state-owned enterprises.

Brussels’ tougher stance on China has, needless to say, been received enthusiastically in Washington, where hawkishness on Beijing is one of the few things that unites Democrats and Republicans.

But the EU remains deeply wary of the all-or-nothing talk of “decoupling” from China prevalent in Washington. Von der Leyen has instead embraced the more nuanced concept of “de-risking”, arguing that the EU should confront Beijing’s unfair trade practices in a targeted manner. 

Underlying today’s talks is the reality that while the EU has edged closer to the US position on Beijing, they are by no means aligned.

Chart du jour: Dredging up spite

Ukraine is looking for alternative shipping routes after Russia blockaded Black Sea ports following its invasion of the country. But Kyiv’s expansion of a canal close to the border with Romania has not gone down well in Bucharest.

Dirty tricks

The EU’s top court has found the Bulgarian government guilty of letting emissions from one of the region’s largest coal plants reach double the bloc’s legal limits, writes Alice Hancock.

Context: Sofia granted the Maritsa East 2 coal plant an exemption to EU limits, which aimed to reduce particularly noxious sulphur dioxide emissions by 59 per cent by 2029. Owing to the coal plant’s exemption, the nearby town of Galabovo racks up the highest SO2 pollution levels in the EU.

Yesterday’s ruling by the European Court of Justice could open the gates to more legal action against pollution in coal-heavy regions. Environmental groups have already toasted the commission’s efforts to promote access to justice for citizens affected by poor air and water in its recent climate legislation.

The Bulgarian government has a history of opposing the EU’s air quality limits, but it has also needed to burn coal to battle the energy crisis sparked by Russia’s invasion of Ukraine. But that’s not a good excuse, per the ECJ ruling: “Air quality limit values must, in principle, be complied with at all times and anywhere.”

As if to drive this home, the European Public Prosecutor’s Office is currently investigating “a private company” in Bulgaria for falsifying emissions certificates so that power plants could under-declare their pollution levels.

Justine Schoenfeld-Quinn, a legal expert at the NGO ClientEarth, meanwhile described the ECJ ruling as a “watershed moment” and “a signal that pollution from toxic fossil fuels won’t be tolerated anymore”.

What to watch today

1. Ursula von der Leyen meets Joe Biden in Washington.

2. Emmanuel Macron hosts Rishi Sunak for Franco-British summit in Paris.

3. Israeli prime minister Benjamin Netanyahu visits his Italian counterpart Giorgia Meloni in Italy.

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