By Philip Blenkinsop

BRUSSELS (Reuters) – The United States is optimistic it will conclude an agreement with the European Union to allow critical minerals mined or processed in Europe to qualify for U.S. clean vehicle tax breaks, a senior U.S. official said on Monday.

The transatlantic partners are negotiating whether and how EU critical minerals, such as lithium and nickel, can qualify for green subsidies under the U.S. Inflation Reduction Act, which promotes products manufactured in North America.

Jose Fernandez, under secretary for economic growth, energy and the environment at the State Department, told a briefing in Brussels that both sides were in intense negotiations.

“I’m hopeful, optimistic. Negotiations are good. We realise that we need to work together and I am confident that we will have an agreement,” he said.

He added there was no plan to tie an agreement on critical minerals to the result of separate transatlantic negotiations to resolve a bilateral dispute over U.S. import tariffs on EU steel.

The United States signed a minerals deal with Japan in March. Now, both the EU and Britain are looking for the same.

Fernandez also said he was meeting EU officials to discuss an agenda for the next joint Trade and Technology Council, which the United States will host before the end of the year.

He said both sides aimed to work on establishing safeguards for artificial intelligence, which they agree should support democratic values, human rights and individual freedoms.

“I think there’s a desire to get beyond those kinds of general statements and to have more concrete,” he said, adding there was no specific timetable to reach an agreement, but a sense this need to occur sooner rather than later.