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EU competition regulator approves €3.2B state aid for battery research

The European Commission on Dec. 9 said it approved plans by seven European Union states to jointly provide €3.2 billion for battery research to 17 companies as the region tries to challenge Asia's dominance in global lithium-ion cell production.

With the growing popularity of electric cars set to vastly increase demand for batteries, the EU funding will be allocated to companies working across the battery supply chain, from raw and advanced materials, cells and modules, battery systems and repurposing to recycling and refining, the commission said in a statement. The public funds are expected to prompt an additional €5 billion of private-sector investment.

"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, EU competition commissioner.

The contributors of the funds are Belgium, Finland, France, Germany, Italy, Poland and Sweden. Companies involved in the projects include Bayerische Motoren Werke AG, Eneris SA, Keliber Oy, Nanocyl SA, Solvay, Terraframe, Umicore, ACC, Endurance, SEEL, Varta AG, Enel X International Srl, Kaitek Srl, Elemental, FAAM and Fortum Oyj. A consortium of French carmaker Peugeot SA, its German subsidiary Opel and French energy company TOTAL SA has also been approved.

The commission deemed that the proposed aid complied with special EU provisions that allow for it where private spending on research in areas of strategic importance to EU members would not otherwise happen. The commission noted that the aid also met specific requirements for the involvement of several EU states and that it was expected to be complemented by private sector investment.

Germany and France earlier announced that they would pledge €1.7 billion in state support to be distributed to consortiums of companies that come together to set up lithium-ion battery production within the EU.

European companies are looking to batteries, the single most valuable component in electric cars, to substitute the value they have historically generated from internal combustion engines, which are coming under increasing pressure from EU-mandated emissions reductions targets.