The U.S. and European Union will start negotiations that could open the way for eligibility of European minerals in electric-vehicle batteries for the purpose of EV federal tax credit eligibility.

If a deal is reached, minerals extracted or processed in the EU would count toward requirements for “clean” vehicles under the Inflation Reduction Act passed last year, which authorized the tax credits. The law has heretofore limited eligibility to vehicles whose battery components are sourced in North America.

Many European and Asian countries have loudly protested that parameter because it shuts them out of a growing piece of the EV market as more consumers move away from gas-powered vehicle purchases.

“We will deepen our cooperation on diversifying critical mineral and battery supply chains, recognizing the substantial opportunities on both sides of the Atlantic to build out these supply chains in a strong, secure, and resilient manner,” said a joint statement by President Joe Biden and European Union President Ursula von der Leyen.

A meeting Friday between Biden and von der Leyen also resulted in, among other joint clean-energy efforts, the launch of a dialogue aimed at coordinating the two partners’ clean-energy incentives programs. “We are working against zero-sum competition so that our incentives maximize clean energy deployment and jobs—and do not lead to windfalls for private interests,” the statement said.

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