NEWS

South Korea Urges US to Specify Banned Chinese Firms in Essential Minerals Procurement

U.S. President Joe Biden speaks to the press after participating in an infrastructure event held at the South Court Auditorium in the White House on Oct. 19, 2022 (local time).

The South Korean government has asked the U.S. to clearly define the Chinese companies from which it should not be procuring essential minerals for electric vehicle batteries under the conditions of subsidy tax credit payments in the U.S. Inflation Reduction Act (IRA).

According to a U.S. government gazette on June 18 (local time), the South Korean government submitted formal comments on the detailed guidelines for the IRA’s electric vehicle tax credit, which was publicly disclosed by the U.S. Treasury Department on March 31. In the comments, the government highlighted the importance of considering the unique complexity and global interdependence within the battery supply chain, from mining essential minerals to cell manufacturing. It asked for sufficient consideration of these complexities when establishing regulations for Foreign Enterprises of Concern (FEOC).

This refers to a regulation that, from 2025, electric vehicle batteries must not use essential minerals procured from FEOCs in order to receive subsidies in the form of tax credits.

Moreover, the government requested the addition of more essential mineral exporting countries like Indonesia and Argentina to the list of Free Trade Agreement (FTA) nations, relating to a regulation that subsidies are only provided if essential minerals are mined and processed in the U.S. or a country with an FTA.

They also asked for clear explanations regarding the still ambiguous definitions of essential minerals and battery components, and the differences between mining and processing. Senator Joe Manchin, who led the establishment of the IRA, submitted an opinion calling for corrections, stating that regulations benefiting the Korean battery industry by relaxing the IRA’s origin requirements contradict the purpose of the law.

Image source >>> Jasmine Choi

Source >>> http://www.businesskorea.co.kr/news/articleView.html?idxno=116730