U.S. Inflation Reduction Act

The US Inflation Reduction Act (IRA), adopted in August 2022, is currently subject to multiple discussions in Europe in the context of climate protection, decarbonization, and green industrial policy. Initial reactions often imply that the newly introduced support scheme in the US is much more generous and effective than the instruments currently available in Europe, potentially putting the US market in a more favorable position.

At the same time, the actual difference in financial support and the resulting costs for the production and roll-out of clean technologies is not usually quantified in the debate and has, in fact, hardly been analyzed so far.

The current study seeks to fill this gap by looking at the support schemes for selected clean technologies more closely and comparing them with existing support mechanisms in Germany and Europe. In particular, the analysis scrutinizes IRA support for hydrogen, solar PV, onshore wind, EVs, and batteries and compares it to instruments available in Germany with regard to volume and expected economic implications. Based on own analyses and expert interviews, adelphi undertakes an assessment of which sectors and industries in Germany and Europe will likely be affected by shifts in investments.