Green light for €4bn state-aid battery projects in France, Germany

Green light for €4bn state-aid battery projects in France, Germany

Green light for €4bn state-aid battery projects in France, Germany 900 841 Energy Storage Journal

January 11, 2024: The European Commission said on January 8 it had given the go-ahead to state aid plans worth a total of nearly €4 billion ($4.4 billion) for batteries, raw materials and renewables projects in France and Germany.

The announcement came after industry leaders warned proposals by EU leaders to slash research and innovation funding by billions of euros risked making “a catastrophic decision” to battery and raw material investment plans.

Commission executive VP in charge of competition policy, Margrethe Vestager (pictured), said a German government state aid package worth €902 million had been approved for Sweden’s Northvolt to build a battery cells gigafactory in Germany.

Vestager said the aid was approved under the EU’s temporary crisis and transition framework (TCTF), introduced to support investment in power and other industry sectors in the wake of rising energy prices following Russia’s invasion of Ukraine.

The aid would ensure Northvolt produced battery cells for EVs in Europe instead of being tempted to locate to the US by lucrative tax and other incentives, she said.

Northvolt’s approval marked the first use of TCTF’s “exceptional possibility” category, which allows for the provision of support if a proposed investment is at risk of being lured away from Europe by subsidies offered overseas.

Also approved under TCTF was a €2.9 billion French scheme supporting production of batteries, solar panels, wind turbines and heat-pumps, related key components and critical raw materials.

Northvolt has yet to respond to questions from Energy Storage Journal about whether it was considering dropping the Germany project to take advantage of financial support from the US.

Photo: EC Audiovisual Service / Claudio Centonze