Washington, DC—In response to the U.S. Treasury Department’s announcement this morning of the guidance regarding the Foreign Entity of Concern (FEOC) provision in the Inflation Reduction Act’s (IRA) 30D tax credit, SAFE Founder, President, and CEO Robbie Diamond issued the following statement:
“The U.S. Treasury Department’s guidance regarding Foreign Entity of Concern (FEOC) highlights the challenge for the U.S. and our allies to compete globally against authoritarian governments with opaque supply chains like China. The shifting political winds of democratic systems, the choices of consumers and vagaries of demand, and quarterly shareholder expectations for businesses in free market economies amount to bringing a knife to a gun fight when considering the top-down, multi-decade national economic strategies, opaque vertical integration, and near limitless funds for state-backed entities we are up against when undergoing industrial investments that take billions and decades. Recent well-publicized action by China on gallium, germanium, and graphite has looked to weaponize their control of the market. It doesn’t require much imagination to see where this is headed if we don’t do this right.
SAFE had called for Treasury to attempt to thread the needle on supporting development of secure, allied supply chain capacity, while also accelerating the adoption of electric vehicles to address U.S. energy security. While we are concerned today’s guidance doesn’t go far enough to ensure these credits maximally boost U.S. and allied production, free of influence from FEOCs, it is most important as a marker and step forward outlining the existential threat facing foundational industries in the U.S., Europe, and allied countries if we don’t take broader, radical steps to shore up our supply chains to electrify our transportation systems and military industrial capacity to address the looming economic and geopolitical risk.
We will watch carefully to see how industry responds and how supply chains develop. We will look to see if supply chains that develop are really secure and free of authoritarian influence and we will speak up and offer further suggestions when we see concerning situations. Now is the time to remain committed to the destination of electrification and speed up the journey while also making sure we do not drive off the road or go in the wrong direction. We go too fast or too slow and we end up in a bad place.”
SAFE is an action-oriented, nonpartisan organization committed to transportation and energy policy solutions to ensure the economic and national security of the United States, its partners, and allies. SAFE has convened business and former military leaders since 2004 to advance secure, resilient, and sustainable energy solutions. Visit secureenergy.org to learn more.
Jason Islas | email@example.com | Phone: +1 310.977.0645