The European Commission authorised, on Tuesday 26 January, under EU State Aid rules, a second Important Project of Common European Interest (IPCEI) to support research and innovation along the entire electric battery value chain.
This project, called ‘European Battery Innovation’, was jointly developed and notified by Austria, Belgium, Croatia, Finland, France, Germany, Greece, Italy, Poland, Slovakia, Spain and Sweden (see EUROPE 12608/21). Germany was at the origin of this project.
These 12 Member States will provide up to €2.9 billion in funding over the next few years. Public funding is expected to unlock an additional €9 billion in private investment, more than three times the amount of public aid.
This project complements the first IPCEI in the battery value chain, which the Commission had authorised in December 2019 (see EUROPE 12386/23).
“The total investment thus approaches 12 billion euros”, commented Margrethe Vestager, Executive Vice-President for Competition Policy, to the press. She claimed that electric batteries can account for up to a third of the total price of electric vehicles, which she believes will play a key role in transforming the economy.
According to Vestager, the project will allow breakthrough innovations “while ensuring that limited public resources are used to crowd in private investment and that competition distortions are minimised”.
Maroš Šefčovič, Vice-President of the Commission responsible for the European Battery Alliance, said that by 2025, “our actions under the European Battery Alliance will result in an industry robust to power at least six million electric cars each year”.
Forty-six projects are planned. More than 300 collaborations will be launched and will lead to the creation of more than 18,000 new jobs.
The second IPCEI will cover the entire battery value chain from extraction of raw materials, design and manufacturing of battery cells and packs, and finally the recycling and disposal in a circular economy. Forty-two companies will participate, including BMW, Fiat and Tesla.
This pan-European project will help to “revolutionise “ the battery market, stressed Šefčovič, in particular by preparing next-generation post-lithium-ion battery technologies to increase energy efficiency and reduce the carbon footprint.
In addition, Mr Šefčovič called on the European Parliament and the EU Council to move quickly to reach an agreement on the clean battery initiative (see EUROPE 12620/13), hoping for a stable regulatory framework by 2023.
On the basis of EU State Aid rules, the Commission found that the proposed project fulfilled the conditions set out in its Communication on IPCEIs (strategic value chain for the future of Europe, technologies that go beyond current technology and allow major improvements in terms of performance, safety and environmental impact).
In addition, the project is accompanied by significant technological and financial risks. Public support is therefore necessary to encourage companies to make the investments.
The aid granted to each company is limited to what is necessary and proportionate and does not unduly distort competition (the total amount of the maximum aid foreseen does not exceed the eligible costs of the projects).
Finally, if large-scale projects under the IPCEI programme prove to be a great success, because they generate additional net revenues beyond what had been planned, companies will return part of the aid to the respective Member States (claw-back mechanism). (Original version in French by Lionel Changeur and Pascal Hansens)