EU Battery Industry Seeks Increased Funding Amid Global Competition

October 11, 2023
BY Staff Writer

Companies express concerns over the EU falling behind in the critical battery sector.

Summary

Battery-related firms across 16 EU member states have penned an open letter to President von der Leyen of the European Commission, appealing for increased financial backing for the battery sector.

Background

  • China's Dominance: The battery sector has seen China rise as the predominant force, with Chinese firms controlling a significant 50 to 90% of the global raw material and processing capacity essential for electric vehicle batteries.
  • US's Efforts: To narrow the gap, the US has introduced the Lower Inflation Act of 2022 and allocated $369 billion in subsidies.
  • EU's Position: Despite the European Union's efforts, including hefty subsidies, there's growing concern among businesses that Europe is lagging behind in this pivotal industry, central to the green revolution.

European Companies' Suggestions

European battery manufacturers propose:

  1. EU Innovation Fund Expansion: There's a pressing need to enhance the EU Innovation Fund quickly.
  2. Dedicated Fund for Raw Materials: They recommend the establishment of a separate fund solely for essential battery raw materials. This idea mirrors the EU-funded Hydrogen Bank, which has a €3 billion budget.
  3. Support at the National Level: Companies urge the provision of production assistance and further investment support at the country level to bolster raw material processing capabilities within Europe.

Signatories of the Appeal

Prominent multinational corporations, including industry titans like Rio Tinto and Northvolt, have endorsed the letter. Three Belgian manufacturers - Solvay, Umicore, and Nyrstar - are also signatories. Umicore, for instance, specializes in producing cathode materials essential for electric car batteries and serves major clients like the Fuchs Group, Mercedes-Benz Group, and the Stylantis Group.

Additional Points

The letter emphasizes that substantial state subsidies in Germany and France offer them an edge over other EU nations. The signatories stress that solely relying on state-level subsidies won't suffice if the EU aims to contend with powerhouses like China and the US. Instead, there's a pressing need for an EU Green Industry Fund, coupled with enhanced funding for innovation initiatives.

Critically, the battery sector feels that the support extended at the EU level currently is neither ample nor focused. A primary concern highlighted is the EU's overlooking of the entire materials value chain, which remains pivotal to the battery industry.

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