French energy giant Total has announced plans to build a $2bn (£1.6bn) synthetic gas plant in the US, dealing a fresh blow to Europe’s green energy aspirations.

The project, which will be jointly developed with Belgian start-up Tree Energy Solutions, will make so-called e-natural gas from hydrogen and carbon dioxide.

It is expected to receive subsidies through the Inflation Reduction Act (IRA), a flagship law passed by Joe Biden’s administration which both companies credited for their decision.

Stéphane Michel, president of gas, renewables and power at TotalEnergies, said: “The United States has many advantages for the development of our first e-NG project, including well-developed gas infrastructure, growing renewable power generation capacity, and significant public subsidies.”

He said that e-gas would “contribute to the energy transition by helping our customers to decarbonize their activities, notably the ones that are difficult to electrify”.

Marco Alverà, chief executive of Tree Energy Solutions, added: “This groundbreaking project testifies to the effectiveness of the Inflation Reduction Act.”

Both the UK and Europe have struggled to respond to the IRA, which politicians across the EU have warned could help the US hoover up investment from European energy, automotive and technology companies.