Airbus-style EU battery alliance splits before take-off

European Commission Vice-President Maroš Šefčovič at the 10th European conference on European Space Policy, 23 January 2018. [© European Union , 2018 / Source: EC - Audiovisual Service]

Initially branded as an Airbus-style consortium, the European battery alliance is more likely to look like a network of smaller industrial and innovation clusters, according to the European Commission vice-president in charge of the Energy Union, one of the main advocates of the project.

The EU joined the global race for battery cell production “a bit late” but it now wants to take a leading role in what the Commission sees as “the holy grail” of clean energy, according to Maroš Šefčovič.

Speaking in Brussels on Monday (12 February), the Commission vice-president in charge of the Energy Union repeated earlier claims that the EU wanted to create an “Airbus of batteries,” saying the situation was “a bit similar to the aviation industry in the 1960s”, when no European company was big enough to take on American competitors.

But he later played down expectations about the creation of an Airbus-style consortium for battery production in Europe, saying the likelihood was that regional centres would emerge based on existing industrial strengths.

“I don’t think we will have one company manufacturing batteries in Europe,” Šefčovič said in reply to a question from EURACTIV about the chances of an Airbus-style company being created.

“What I hope to have would be ten plus giga-factories which will be competitive and delivering high-quality products to global markets,” he said at an event hosted by the permanent representation of Belgium to the EU.

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Although European carmakers assemble battery packs for electric cars, the region has no significant player in battery cells – the essential building blocks for the batteries that are now mostly made in Asia.

The Commission has branded batteries as “a key enabler” in its flagship project to establish an Energy Union, saying their development and production play a strategic role in the modernisation of Europe’s industry.

According to the EU executive, the market for batteries could reach €250 billion annually as of 2025. Europe’s share of battery cell demand is expected to amount to 200 GWh, compared to 600 GWh globally.

But the lack of a domestic European cell manufacturing base is seen as a weakness by the Commission, which urged EU industry to act fast – and collectively – to overcome what it sees as a competitive disadvantage.

Several consortia

“My feeling is that we will have most probably several consortia working very closely among themselves,” Šefčovič said, citing Finland as an example of a country which has succeeded in developing industrial expertise in the mining and processing of precious metals.

“Sweden is quite well advanced in having the first production line” while in Germany the car sector has strong research and innovation potential. In France, battery producer SAFT, owned by the French oil major Total, is “one of the most advanced” in what could be the next generation of car batteries, Šefčovič said.

“We see the potential groups that are being formed. But we are still at an early stage,” he added, saying it was “difficult to predict” what would come out of the European battery alliance.

During a first meeting in October, industry representatives and officials from the EU and national governments agreed to work together to “create a full value chain of batteries in Europe” and establish “large-scale battery cells production capabilities” on the old continent.

German chemical group BASF, automakers Renault and Daimler and engineering firm Siemens were among those invited to the October gathering in Brussels.

The Commission said the aim was to deliver “a strategic plan”, which could take the form of a comprehensive roadmap for an EU Battery Alliance in February.

“The scale and speed required means that no single actor can do it on its own,” Šefčovič warned at the time, saying the EU executive wants to encourage “industry-led cross-border projects” as well as to “pool and blend support instruments” at the national and European level.

European battery alliance launched in Brussels

The European Commission hosted auto, chemical and engineering executives in Brussels yesterday (11 October) to develop battery manufacturing in the EU to compete with Asian and US manufacturers.

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