United States of America: Subsidies and Buy American provisions for electric cars and batteries
Description
The climate-change bill approved by the House of Representatives includes a provision under which the Department of Energy would subsidize facilities that manufacture electric vehicles and batteries for these vehicles, provided that they are developed and produced in the United States. The House approved the bill by a vote of 219 to 212 on June 26, 2009. The legislation, which also provides for a possible tariff on imports from countries that do not reduce their greenhouse gas emissions (see the Global Trade Alert description of this measure), is now pending in the Senate.
Section 123 of the American Clean Energy and Security Act (designated as H.R.2454 and also known as ACES) provides that the Secretary of Energy “shall establish a program to provide financial assistance to automobile manufacturers to facilitate the manufacture of plug-in electric drive vehicles … that are developed and produced in the United States.” It further specifies that ―
The Secretary of Energy may provide financial assistance to an automobile manufacturer under the program … for the reconstruction or retooling of facilities for the manufacture of plug-in electric drive vehicles or batteries for such vehicles that are developed and produced in the United States.
The bill authorizes the appropriations for such a project, but does not make any such appropriations or set a dollar figure. That will require the enactment of separate appropriations legislation by Congress.
Section 124(d)(1)(A) further provides for payments to automobile manufacturers and component suppliers for up to 30 percent of the cost of—
(A) reequipping, expanding, or establishing a manufacturing facility in the United States to produce —
(i) qualifying advanced technology vehicles; or
(ii) qualifying components; and
(B) engineering integration performed in the United States of qualifying vehicles and qualifying components.
The bill builds upon two programs previously established in the Act of 2007 (Public Law 110-140). Section 131(b) of that law instructed the Secretary of Energy to establish a competitive grants program to encourage the use of plug-in electric drive vehicles or other emerging electric vehicle technologies by governmental and quasi-governmental entities and private or nonprofit entities. It also authorized appropriations for the plug-in program for fiscal years 2008-2012. The 2007 law did not establish a strict Buy American requirement, but it did provide that one of the criteria to be employed in making awards was that applications should be“likely to make a significant contribution to the advancement of the production of the vehicles in the United States.” The bill now pending in Congress appears not to extend the same level of discretion that was inherent in that earlier construction.
Section 135 of the 2007 law also provided for support to the industry that produces batteries for these vehicles. In this instance the existing law appears to be as restrictive as the one now under consideration, insofar as it provided for the establishment of a “program to provide guarantees of loans by private institutions for the construction of facilities for the manufacture of advanced vehicle batteries and battery systems that are developed and produced in the United States, including advanced lithium ion batteries and hybrid electrical system and component manufacturers and software designers” (emphasis added).
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | No |
| Is there any evidence that alternatives to the proposed measure were considered? | No |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | No |
| Was such evidence identified? | No |
| Is such evidence publicly available? | No |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | No |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | No |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | No |
| Did the government state its intention to review the measure within one year of implementation? | Yes |
Date Discovered:
Implemented: No
Date of inception:
GTA Evaluation: Amber
Source:
See the hyperlinked materials in the description above for the sources.
Government Response:
- 769 reads
