European Commission approves second European battery project

The European Commission has given the green light to the continent's second battery project, with executive vice president Margrethe Vestager announcing Jan. 26 that Eur2.9 billion ($3.5 billion) of state aid by 12 member states had been approved to support 46 projects designed by 42 companies.

She said in her speech that the 12 member states, namely Austria, Belgium, Croatia, Finland, France, Germany, Greece, Italy, Poland, Slovakia, Spain and Sweden, would join forces to support the second strategic pan-European research and innovation project along the entire battery value chain.

The first such battery project was approved by the EC in December 2019, with seven member states participating.

Vestager added that the second project, called the European Battery Innovation project, would be coordinated by Germany and would cover the whole battery ecosystem from extraction of raw materials, design and manufacturing of battery cells and packs, as well as the recycling and disposal in a circular economy.

She said the public support would unlock an additional Eur9 billion of private investments, bringing the total investments in the project to almost Eur12 billion.

Vestager said the 42 companies, active in one or more of the 12 member states, were due to participate directly in the project, with these including large industrial players, such as BMW, Fiat, Northvolt and Tesla, as well as small and medium-sized enterprises and start-ups.

"To tackle climate change, we have to transform how we power our world, how we heat our homes – and how we travel and move between places. Electric vehicles will play a key role in this. They're increasingly present on our roads, and sales have continued to rise even during the corona crisis," Vestager said.

"Beyond the automotive sector, battery technologies play a crucial role, for example to better store renewable energy ... All these efforts will only really pay off for the environment, if we improve the production and recycling processes of batteries," she added.

Important milestone

EC vice-president and leader of the European Battery Alliance Maroš Šefcovic said in his speech that the second project was an important milestone for the European Battery Alliance and the technology that would stem from it was vital for the transition to climate neutrality and the project.

He added that the total Eur12 billion investment was unprecedented and would allow Europe to raise its game in ground-breaking research and innovation by focusing on beyond-state-of-the-art lithium-ion batteries and next-generation post-lithium-ion battery technologies, as well as fostering new manufacturing processes with higher energy efficiency and lower carbon footprint across the entire value chain.

Šefcovic said the project would also benefit the European economy through spillover effects beyond the participating member States and companies, with over 300 partnerships between industrial and scientific actors expected, which should lead to around 30 pilot lines and help create over 18 thousand new jobs.

"Overall, thanks to our actions under the European Battery Alliance, Europe is cementing its position as a global hotspot for battery investment. The European battery sector is defying the negative trends in our economies and we are well on track towards attaining strategic autonomy in this key industrial sector," Šefcovic said.

He added that by 2025, Europe was expected to be manufacturing enough battery cells each year to power at least 6 million EVs.

European battery value chain becoming reality

Germany's Federal Ministry for Economic Affairs and Energy, or BMWi, released a statement saying that the project's approval cleared the way for it to fund 11 companies in Germany, including ACI Systems, Alumina Systems, BMW, Cellforce Group, ElringKlinger, Liofit, Manz, Northvolt, SGL Carbon, Skeleton Technologies and Tesla.

It added that it had coordinated two Important Projects of Common European Interest, or IPCEI, with the EC and other member states since 2019 for the research and development in battery cell production and was providing up to Eur3 billion to promote the development of battery cell production.

"German companies play a key role in both projects and in total investments of over Eur13 billion are being initiated in the two IPCEIs in Germany alone," the BMWi said.

Federal Minister of Economics Peter Altmaier said the approval of the second major European project for battery cell production created the critical mass for the battery ecosystem in Europe and clearly showed that the European battery value chain was becoming a reality.

"Germany and Europe will develop competitive, innovative and environmentally friendly battery cells themselves. This triggers extensive private investments and creates new, future-proof jobs," Altmaier said.