Germany eyes tax credits for renewable energy companies

BERLIN (AP) — A senior German government official is proposing U.S.-style tax credits to boost companies involved in shifting the country's economy away from its dependence on fossil fuels.

Economy Minister Robert Habeck said Germany and Europe as a whole need to strengthen the production capacity for clean energy, which would also lower electricity prices and help it compete with global rivals.

“This is important if the energy transition is to succeed and to safeguard jobs and value creation in Germany and Europe,” he said.

European governments fear that huge incentives offered to clean tech companies through the U.S. Inflation Reduction Act could lure manufacturers across the Atlantic.

There are also concerns that Europe is too dependent on China for supplies of key components needed for renewable energy production, such as solar panels.

As part of its climate plan the German government wants 80% of the country's gross electricity to come from renewable energy by 2030, despite rising demand. This means roughly doubling Germany's current production of wind and solar power.

Habeck plans to promote the transition away from fossil fuels with a visit Wednesday to the coal-mining Lausitz region, south of Berlin, that is seeking government help to become a hub for renewable energy.

The Associated Press