Japan and the United States plan to sign an agreement that will reinforce supply chain resilience for critical minerals used in electric vehicle (EV) batteries that will allow Japanese to receive US tax credits, Japan’s Economy, Trade and Industry Minister Yasutoshi Nishimura said Tuesday.
Under the US Inflation Reduction Act signed into law last August, a certain amount of critical minerals in the batteries must be sourced or processed either domestically or from free trade agreement partners to qualify for the clean vehicle credit. The latest agreement will relax regulations and treat Japan as equivalent to such a trade partner in relation to the minerals, according to Japan’s (Kyodo) News Agency.
Electric vehicles using critical minerals collected or processed in Japan would meet the requirements of US tax credits, the Japanese minister said “The agreement is aimed at building resilient supply chains in cooperation with the United States, as well as like-minded nations, to secure critical minerals indispensable to the production of EV batteries, with demand for them expected to expand significantly further,” Nishimura said.
Japan and European countries had previously protested against being excluded from joining the American Clean Vehicle Credit program, with Tokyo submitting a letter to the US government in November calling for the program’s requirements to be eased.
Source: Qatar News Agency