State aid: Commission approves €2.9 billion public support by twelve Member States for a second pan-European research and innovation project along the entire battery value chain

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The Commission has approved, under EU State aid rules, a second Important Project of Common European Interest (“IPCEI”) to support research and innovation in the battery value chain. The project, called “European Battery Innovation” was jointly prepared and notified by Austria, Belgium, Croatia, Finland, France, Germany, Greece, Italy, Poland, Slovakia, Spain and Sweden.

The twelve Member States will provide up to €2.9 billion in funding in the coming years. The public funding is expected to unlock an additional €9 billion in private investments, i.e. more than three times the public support. The project complements the first IPCEI in the battery value chain that the Commission approved in December 2019.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “For those massive innovation challenges for the European economy, the risks can be too big for just one Member State or one company to take alone. So, it makes good sense for European governments to come together to support industry in developing more innovative and sustainable batteries. Today’s project is an example of how competition policy works hand in hand with innovation and competitiveness. By enabling breakthrough innovation while ensuring that limited public resources are used to crowd in private investment and that competition distortions are minimised. With significant support also comes responsibility: the public has to benefit from its investment, which is why companies receiving aid have to generate positive spillover effects across the EU.”

Vice-President Maroš Šefčovič, in charge of the European Battery Alliance, said:Thanks to its focus on a next generation of batteries, this strong pan-European project will help revolutionise the battery market. It will also boost our strategic autonomy in a sector vital for Europe’s green transition and long-term resilience. Some three years ago, the EU battery industry was hardly on the map. Today, Europe is a global battery hotspot. And 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. Our success lies in collaboration, with some 300 partnerships between industrial and scientific actors foreseen under this project alone.”

Commissioner for Internal Market Thierry Breton said: The batteries value chain plays a strategic role in meeting our ambitions in terms of clean mobility and energy storage. By establishing a complete, decarbonised and digital battery value chain in Europe, we can give our industry a competitive edge, create much needed jobs and reduce our unwanted dependencies on third countries – in short, make us more resilient. This new IPCEI proves that the European Battery Alliance, an important part of the EU industrial policy toolbox, is delivering.”

The project 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, with a strong focus on sustainability. It is expected to contribute to the development of a whole set of new technological breakthroughs, including different cell chemistries and novel production processes, and other innovations in the battery value chain, in addition to what will be achieved thanks to the first battery IPCEI.

Commission assessment

The Commission assessed the proposed project under EU State aid rules, more specifically its Communication on Important Projects of Common European Interest (IPCEI). Where private initiatives supporting breakthrough innovation fail to materialise because of the significant risks such projects entail, the IPCEI State aid Communication enables Member States to jointly fill the gap to overcome these market failures, while ensuring that the EU economy at large benefits and limiting potential distortions to competition.

The Commission has found that the proposed IPCEI fulfils the required conditions set out in its Communication. In particular, the Commission concluded that:

  • The project contributes to a common objective by supporting a strategic value chain for the future of Europe in particular with respect to clean and low emission mobility.
  • The project is highly ambitious, as it aims at developing technologies and processes that go beyond current technology and will allow major improvements in performance, safety and environmental impact.
  • The project also involves significant technological and financial risks, and public support is therefore necessary to provide incentives to companies to carry out the investment.
  • Aid to individual companies is limited to what is necessary, proportionate and does not unduly distort competition. In particular, the Commission has verified that the total planned maximum aid amounts are in line with the eligible costs of the projects and their funding gaps. Furthermore, if large projects covered by the IPCEI turn out to be very successful, generating extra net revenues, the companies will return part of the aid received to the respective Member States (claw-back mechanism).
  • The results of the project will be widely shared by participating companies benefitting from the public support with the European scientific community and industry beyond the participating companies and countries. As a result, positive spill-over effects will be generated throughout Europe.

On this basis, the Commission concluded that the project is in line with EU State aid rules.

Funding, beneficiaries and amounts

The project will involve 42 direct participants, including small and medium-sized enterprises (SMEs) and start-ups with activities in one or more Member States. The direct participants will closely cooperate with each other through nearly 300 collaborations envisaged, and with over 150 external partners, such as universities, research organisations and SMEs across Europe. The overall project is expected to be completed by 2028 (with differing timelines for each sub-project).

The direct participants, the Member States supporting them and the different project areas are as follows:

graph_EN

More information on the amount of aid to individual participants will be available in the public version of the Commission’s decision once the Commission has agreed with Member States and third parties on any confidential business secrets that need to be removed.

Background

The Commission’s approval of this project forms part of the context of the wider Commission efforts to support the development of an innovative and sustainable European battery industry. In 2017, the Commission launched the European Battery Alliance. In 2018, the Commission adopted the Strategic Action Plan for Batteries and has promoted a wide range of initiatives as part of the plan.

In view of the growing importance of batteries in a number of areas, including notably transport and energy, a safe, circular and sustainable battery value chain will be increasingly essential. Having batteries that are more sustainable throughout their life cycle is key to achieve our ambitious climate targets. This is also at the core of the Sustainable Batteries Regulation proposed by the Commission in December 2020.

Today’s decision is the third research and innovation project based on the 2014 State aid Communication on Important Projects of Common European Interest (IPCEI), setting out criteria under which several Member States can support transnational projects of strategic significance for the EU under Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU). The Communication aims to encourage Member States to support highly innovative projects that make a clear contribution to economic growth, jobs and competitiveness.

The IPCEI Communication complements other State aid rules such as the General Block Exemption Regulation and the Research, Development and Innovation (R&D&I) Framework, which allows supporting innovative projects whilst ensuring that potential competition distortions are limited. According to the 2019 State Aid Scoreboard, annual spending for R&D&I under the General Block Exemption Regulation continued to increase to reach about €10 billion in 2018.

The IPCEI Communication supports investments for R&D&I and first industrial deployment on condition that the projects receiving this funding are highly innovative and do not cover mass production or commercial activities. They also require extensive dissemination and spillover commitments of new knowledge throughout the EU and a detailed competition assessment to minimise any undue distortions in the internal market.

A broad range of State aid rules, including the IPCEI Communication, are currently being reviewed to ensure they fully contribute to the Commission’s green and digital objectives, following an evaluation or ‘Fitness Check’ completed in October 2020. A public consultation on a revised IPCEI Communication will be launched in the coming weeks.  

The non-confidential version of the decision will be made available under the case numbers SA.55855 (Austria), SA.55840 (Belgium), SA.55844 (Croatia), SA.55846 (Finland), SA.55858 (France), SA.55831 (Germany), SA.56665 (Greece), SA.55813 (Italy), SA.55859 (Poland), SA.55819 (Slovakia), SA.55896 (Spain), and SA.55854 (Sweden) in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

FROM THE FIELD: India’s plastic waste revolution

Integration of migrants: Commission launches a public consultation and call for an expert group on the views of migrants

Human rights: breaches in Russia, the Rakhine State and Bahrain

How upskilling could help cities rebuild after Coronavirus

EntEx Organises 5 Summer Schools for Young Entrepreneurs across Europe in June/July 2014

The female struggle in the face of medical devaluation

‘The welfare of the Libyan people’ the UN’s sole agenda for the country, says Guterres in Tripoli

Dare to be vulnerable, and three other lessons in leadership

How businesses can create an ethical culture in the age of tech

The challenge to be a good healthcare professional

Act now to prevent Desert Locust catastrophe in Horn of Africa: UN agencies

The most unlikely innovators are changing ICT for development – it’s time we took notice

What is environmental racism?

Climate change: cutting the good by the root?

Guterres condemns killing of Bangladeshi peacekeeper in South Sudan, during armed attack on UN convoy

Venezuela’s needs ‘significant and growing’ UN humanitarian chief warns Security Council, as ‘unparalleled’ exodus continues

More than speed: 5G could become the next big economic driver

Asylum: more solidarity among EU member states and funds for frontline countries

European Commission requests that Italy presents a revised draft budgetary plan for 2019

Greener tourism: Greater collaboration needed to tackle rising emissions

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

Europe, US and Russia haggle over Ukraine’s convulsing body; Russians and Americans press on for an all out civil war

The “Colombo Declaration” adopted at the World Conference on Youth 2014

IMF: World cup and productivity

Cameron postpones speech in Holland

‘Great cause of concern’ UN chief tells Security Council, surveying ‘bleak’ state of civilian protection

1.1 billion people still lack electricity. This could be the solution

5 leadership lessons I learned from doing my own ‘undercover boss’

If we want to solve climate change, water governance is our blueprint

The World Health Organization has called on countries to ‘test, test, test’ for coronavirus – this is why

EU budget: Commission helps prepare new Cohesion programmes with Regional Competitiveness Index and Eurobarometer

Catalonia secessionist leader takes Flemish ‘cover’; Spain risks more jingoist violence

Marriage equality boosted employment of both partners in US gay and lesbian couples

Europe had a record year for Measles – and it’s partly down to anti-vaccine campaigners

From Policy to Reality: Discrepancies in Universal Health Care Systems across the EU

AI looks set to disrupt the established world order. Here’s how

Early healthcare investment is our best chance at healthy ageing

The EU sides with China against the US; but has Germany capitulated to America?

Preserving biodiversity vital to reverse tide of climate change, UN stresses on International Day

Educate children in their mother tongue, urges UN rights expert

Russia and the West to partition Ukraine?

GDPR and the World Cup have these 4 things in common

Your chocolate can help save the planet. Here’s how

ECB embarks on the risky trip to Eurozone banking universe

New rules to help consumers join forces to seek compensation

Thinking like Leonardo da Vinci will help children tackle climate change

Parliament approves EU rules requiring life-saving technologies in vehicles

World Bank downgrades global growth forecasts, poorest countries hardest hit

What we need is more (and better) multilateralism, not less

International Women’s Day 2019: more equality, but change is too slow

How to fix our planet: the pioneers fighting to bring nature back

How China Mended My Heart

Children are forgetting the names for plants and animals

Labels for tyres: deal for greener and safer road transport

Commission presents its response to Antisemitism and a survey showing Antisemitism is on the rise in the EU

The Ecofin deceives the SMEs with the EIB €10bn capital increase

Consumers suffer three defeats

Sexual exploitation and abuse: latest UN quarterly update

The economic effects of the COVID-19 coronavirus around the world

New VAT rules in the EU: how a digital sea could have become an ocean

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s