The decision, announced on Monday December 9 by the European Commission, effectively greenlights a major collaborative project designed to strengthen European battery production.
This "Important Project of Common European Interest" is a new type of EU-recognized industrial project eligible for major support from EU institutions and governments.
The battery project has been developed by companies and public authorities in Belgium, Finland, France, Germany, Italy, Poland and Sweden to support research and innovation in lithium-ion battery production, enabling 17 participating businesses to collaborate and build up a European lithium battery sector.
Its scope covers the supply chain from mineral extraction to processing, battery manufacturing and recycling. Companies covered by the seven state aid authorizations released by the Commission include Finland's Keliber, which has been conducting exploratory drilling into its Rapasaari lithium deposit. The company said this month that its estimated proven and probable ore reserves total 5.28 million tonnes, up 49.6% from previous estimates. Another Finnish partner would be Terrafame, whose Talvivaara mine produces nickel and cobalt - both important components of lithium-ion batteries. Terrafame is investing in a new battery chemicals plant to produce nickel sulfate and cobalt sulfate for electric-vehicle battery production.
Other members of the consortium include Belgium's Umicore, which recycles, refines, transforms and sells cobalt and nickel specialty chemicals used to make lithium-ion batteries; and France’s Solvay, which makes specialty polymers giving batteries durability, chemical resistance and electrochemical resistance. Another beneficiary is Belgium's Nanocyl, which makes carbon nanotubes that can improve lithium-ion battery performance.
Major German automotive and chemical manufacturers BMW and BASF are also involved, and this is reflected by the €1.25 billion portion of the approved subsidies that will be paid in Germany. Belgium sought approval to grant up to approximately €80 million; Finland, €30 million; France, €960 million; Italy, €570 million; Poland, €240 million; and Sweden, €50 million.
Details of exactly how each company will benefit from these subsidies have yet to be released. But if these projects are successful, a “significant share of additional profits made by the participants will be shared with taxpayers through a claw-back mechanism,” according to a European Commission note.
The project will be monitored via a dedicated governing body, including representatives from the participating companies and governments, tasked with ensuring all of these development schemes are completed by 2031.
The Commission hailed the project as “highly ambitious and innovative” and designed to develop technologies and processes that are not currently available, encouraging major improvements in battery performance and reduction of environmental impact. “The project also involves significant technological and financial risks that could lead to failures or significant delays,” the report said, noting this as the reason why major public support is needed.
The approval of €3.2 billion in subsidies by seven European Union members could generate a major mineral supply and processing chain to manufacture lithium-ion batteries in Europe.