(Bloomberg) -- TotalEnergies SE Chief Executive Officer Patrick Pouyanne warned that Europe could lose out on projects that will produce synthetic fuel because the massive US climate spending package offers better incentives.

The Europe Union recently proposed a mix of measures including domestic production targets and quicker permitting for key clean-tech projects in response to the US Inflation Reduction Act. Still, European manufacturers and governments have voiced concern that the EU’s plan lacks the simple framework of President Joe Biden’s $369 billion package of tax breaks. 

“When it looks at this topic, Europe starts with regulations rather than aid,” Pouyanne said at a Senate hearing on biofuels in Paris Wednesday. “Today, the best way to produce green hydrogen is to produce it in the US and to export it to Europe.”

Read more: Competition From the US Is Forcing Europe to Up Its Green Game

The US will also continue to benefit from cheap energy costs thanks to its domestic resources, while Europe faces sustained high costs after cutting imports of Russian natural gas because of the war in Ukraine, Pouyanne said.

As a result, TotalEnergies is considering a project to produce green marine fuels in the US, the CEO said. A plant that would produce 1 million tons of methanol may cost $7 billion to $8 billion, he said.

He also urged Europe to protect its makers of electrolizers — the key equipment needed to separate hydrogen from water — from Chinese rivals. European startups are struggling to manufacture electrolizers at scale, he said.

TotalEnergies is still planning to make carbon-free hydrogen with a 130-megawatt electrolizer to supply its biofuel plant in Southern France, and is developing another green hydrogen project at another refinery in Northwest France, he said. It’s also looking at green hydrogen projects elsewhere in Europe, including in Scotland.

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