European Union permits state aid to develop electric battery giants

Marco Green
December 10, 2019

The EU's powerful anti-trust authority today approved billions of euros in subsidies from seven member states as Europe seeks to make up lost ground in batteries.

The EU said Monday that the plan subsidized by Belgium, Finland, France, Germany, Italy, Poland and Sweden will support research and innovation in a crucial sector where Europe is lagging behind Asian competitors and largely relies on imports.

The move is part of a major incentive from Germany and France to prepare Europe for the emergence of electric cars, as gas-combustible engines are being phased out due to climate change concerns.

In particular, Europe is concerned about becoming dependent on electric vehicle battery production in Asia, which now produces around 80% of the worldwide total.

It is expected to help generate another 5bn euros in private investment, the Commission said.

"Battery production in Europe is of strategic interest for our economy and society because of its potential in terms of clean mobility and energy, job creation, sustainability and competitiveness", said Margrethe Vestager, the Commission's executive vice-president for competition. Europe produces only 3%.

While the European Commission's anti-trust body has previously held a strict line against state subsidies, in 2014 it gave more leeway to allow countries to back strategic transnational projects.

Maroš Šefčovič, Vice President for Interinstitutional Relations and Foresight, said: "Our focus on scaling up innovation under the European Battery Alliance is yielding strong industrial partnerships".

The campaign, launched in 2017, was meant to entice European industry to create a so-called "Battery Airbus", referring to the aviation giant born a generation ago from a wide range of semi-private companies.

Seventeen companies involved in all parts of the battery production chain - from mining raw materials, to design and recycling - stand to benefit, the European Union executive said in a statement.

Companies involved in the battery projects include German vehicle giant BMW and chemical multinationals BASF and Solvay. He added that the country should be able to produce batteries on an indsutrial scale by the middle of the next decade.

Other reports by Click Lancashire

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