Inflation Reduction Act: Between Europe and the United States

Most of Brussels was on holiday on 16 August 2022 when the US Congress passed the Inflation Reduction Act (IRA). A mammoth package of 280 pages, this bill  aims to drastically reduce US carbon emissions and strengthen its social security system, while also cutting the public deficit, fighting inflation and boosting energy production and manufacturing. It is the single largest investment in clean energy and climate action ever taken by the US—directing nearly $370 billion worth of tax breaks and subsidies into green energy production and manufacturing. But some in Europe have fear the bill may impact the EU’s industrial landscape. How should Brussels respond? What were the drivers behind this law? And what impact are we seeing a year after the bill’s passing? Institut Montaigne’s has dedicated several analyses on this issue, available below.