Batteries that do not meet rigorous green standards could be banned from the European market, Commission Vice-President Maroš Šefčovič warned on Monday (9 December), as the EU executive approved €3.2 billion of state aid for some home-grown projects.
The EU is working on environmental standards for batteries that aim to land the bloc a chunk of a market that could be worth a quarter of a trillion euros by 2025, under its so-called Battery Alliance.
On Monday (9 December), Šefčovič told reporters that battery imports from Southeast Asia could be excluded from the European market if they do not meet certain criteria.
When asked if changes to the EU legal framework might result in bans, the Slovak official said: “I think that if they would not respect the standards, then yes.”
“We clearly have to do what other economies and markets are doing, we have to respect their standards,” the Commission VP said.
The upcoming list of green criteria that batteries have to meet will range from how sustainable the raw materials used in manufacturing are to how clean the energy used in construction is.
EU policymakers have realised that the bloc will not be able to compete with imports from China and Korea on price and sheer volume immediately, so they have targeted the environmental angle in order to capitalise on growing demand for electrification.
“Of course, our Asian competitors are not sleeping. They see what we aim to do with this alliance. The work on standards is important: if you want to sell here, you have to respect our standards,” Šefčovič added.
The Commission announced later on Monday that it had given the green light to €3.2 billion in state aid for battery projects in seven member states, Belgium, Finland, France, Germany, Italy, Poland and Sweden, which had applied for approval earlier in the year.
Under the EU’s so-called Important Project of Common European interest (IPCEI) programme, the seven countries submitted a raft of projects supported by 17 companies, including BMW, Enel X and Umicore.
The list of “ambitious and risky” ideas range from procuring raw materials and using them in batteries to recycling and reuse. They are expected to run until 2031.
“Our focus on scaling up innovation under the Battery Alliance is yielding strong industrial partnerships. Thanks to intensive efforts by seven member states, industry and the Commission, Europe’s first major pan-European battery ecosystem is emerging,” Šefčovič said in a statement.
His colleague, competition Commissioner Margrethe Vestager, was heavily involved in granting the France-coordinated IPCEI the blessing of the Commission.
“Our IPCEIs smooth the way for public authorities and industries from several member states to come together and design ambitious innovation projects with positive spill-over effects across industrial sectors and regions,” the Danish official said.
“The approved aid will ensure that this important project can go ahead without unduly distorting competition,” she added.
Germany is estimated to be the biggest beneficiary of the state aid decision, as Berlin aims to pump more than €1 billion into various projects. France aims to invest around €960 million.
The €3.2 billion total is expected to attract a further €5 billion in private investment and two so-called battery gigafactories will be built as a result of the funding.
Asked if EU money will be invested by member states in the projects, Šefčovič said it is possible that national governments will redirect structural funds to cover the financial outlay.
The battery industry could get another early Christmas present from the Commission, as another IPCEI, this time coordinated by Germany, will submit the details of its proposal before the end of the year. Full approval, however, would likely take at least a few months.
That package will involve 12 or 13 member states and 50 direct beneficiaries.
[Edited by Zoran Radosavljevic]