France and Germany launched an Airbus-style €6 billion foray into the battery-building business on Thursday (2 May), as the EU’s attempts to corner a slice of a growing global market started to pay off.
Batteries are big business thanks mostly to the increasing popularity of electric vehicles and Europe is now chomping at the bit to increase its 3% share of the global production market and keep up with established industries, mostly located in Asia.
On Thursday, France and Germany’s economy ministers, Bruno Le Maire and Peter Altmaier, met European Commission Vice-President Maroš Šefčovic in Paris to discuss a large-scale battery consortium and whether it is eligible for state aid.
“This is an important stage in European economic history, showing that Europe can build its economic and technological sovereignty and is not dependent on the US or China,” said Le Maire.
During the speeches, the plan was likened to aircraft-maker Airbus.
The plan is worth nearly €6 billion, including some €1.2 billion that should come from public subsidies, and is said to include a pilot factory in France in 2020, with two more to follow in 2022 and 2023.
Given the strategic nature of battery production, the state aid request will be looked at under the Commission’s Important Projects of Common European Interest (IPCEI) framework.
The EU executive has been urged to fast track the scheme and the bloc’s competition boss Margrethe Vestager, who also attended the third EBA meeting, said her services were on standby to help get the IPCEI application ready by June and approved by October.
Some of the private firms that have expressed interest in the project have indicated that they will hold off making formal commitments until a final decision is made by the Commission.
In October 2017, the Commission rolled out its Battery Alliance, which brings together the European Investment Bank, EU countries and top manufacturers. The aim is to boost the battery-building supply chain and tap into a market that is predicted to be worth €250 billion by 2025.
Although first seen as an ‘Airbus’ for batteries, the Alliance is more of a cooperative platform than the massive public-private endeavour launched in the 1960s to break the US-monopoly on aircraft production.
During the presentation of the Commission’s first annual stocktake of the Alliance’s progress in early April, Šefčovic hailed it as “an example of 21st-century industrial policy”.
The Slovak Commissioner also said that “significant progress” had been made and once again reiterated that its success will “be key to the European automobile industry”.
After a third meeting of the Alliance’s interested parties on 30 April, Šefčovic said everyone was in agreement that “there is a need to accelerate our work” and that “the most visible outcome is that industry has taken the lead”.
Belgian economy minister Kris Peeters, who attended the meeting, said “the debate about industrial policy has been too abstract. This is different, the EBA is a tangible measure, in action.”
Applications for funding are coming in thick and fast after Horizon 2020’s Innovation and Networks Executive Agency revealed that nearly half a billion euros had been requested to develop next-generation batteries.
Eighty-two project proposals were lodged by a 25 April deadline and there is a total budget of €114 million available. The agency estimates that 18 projects in the fields of vehicle batteries, grid storage and software development will be granted funding.
Part of the Alliance’s hopes rests on making European batteries the most sustainable and most future-proof on the market, as there is a general acknowledgement that they will not be able to compete on price with Asian alternatives.
The Commission, which included “sustainable battery manufacturing” in its contribution to the Future of Europe summit in Romania next week, is currently working on setting standards for green batteries.
Šefčovic told reporters on Tuesday that the standards should be finalised by the autumn under the current Commission and that work is still ongoing with the relevant standardisation bodies.
Julia Poliscanova, clean mobility expert at Transport and Environment (T&E), an NGO, told EURACTIV that Europe “can only compete on quality” and should “aim to produce the greenest, safest and best batteries”. She added that supporting EU rules on battery eco-design and recycling should “help build a competitive advantage”.
The Slovak Commissioner also suggested that Europe’s software expertise will “make us number one” as it will allow batteries to fully tap into so-called vehicle-to-grid systems, which should allow electric vehicles to sell stored power when not in use.
[Edited by Frédéric Simon]