(Bloomberg) -- The European Union's project to become the world's second-largest battery producer is set for a springtime boost, when companies in the sector get 900 million euros ($1.1 billion) to bolster research and innovation.
The EU has already invested billions in its Battery Alliance project set up to compete with Asia, currently Europe's only provider of EV batteries. The region's market value will reach 250 billion euros by 2025, with production capacity able to meet auto industry demand, according to European Commission estimates.
The bloc continues to be a battery hot spot despite the pandemic by closing the investment gap to its major competitors and moving fast toward “open strategic autonomy,” Maros Sefcovic, Commission Vice President, said after a meeting with EU ministers and the European Investment Bank.
“The Commission and private actors will sign a Memorandum of Understanding on Horizon Europe partnership to foster research and innovation in the battery sector” worth some 900 million euros, Sefcovic told a press conference after the meeting.
The battery initiative is a key part of the EU plans to slash greenhouse gas emissions from transport under the Green Deal, an economic overhaul aimed at reaching climate neutrality by 2050. Earlier this year the commission paved the way for companies including Tesla Inc. and BMW AG to get about 2.9 billion euros of state aid for battery projects that will strengthen the bloc's position in the race to produce more electric vehicles.
The priorities for Europe in the months ahead include accelerating negotiations on a draft regulation to toughen environmental standards for batteries, strengthening sustainable sourcing and processing of raw materials and local production of key components for lithium-ion batteries.
“As the member states are finalizing their national recovery and resilience plans, I encourage them to include investment in raw and advanced materials,” Sefcovic said. “The EIB's involvement is decisive here to de-risk raw materials projects, leverage additional private money and effectively, to close the estimated financial gap of 15 billion euros by 2025.”
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