EBA 250 welcomed the renewed commitment to the battery industry by the European Commission to ensure EU supply chains and an ecosystem on batteries and electric vehicles is strengthened. Batteries are instrumental to enabling Europe’s transition to a decarbonized economy.
The proposal by the European Commission to extend the current rules of origin for EVs and batteries under the EU-UK Trade and Cooperation Agreement, balanced with a new, dedicated financial incentive for the battery industry, gives a strong signal to investors across the value chain.
In particular, a financial stimulus of €3 billion under the EU Innovation Fund will boost the growth of the EU battery value chain in view of the current status of the industry.
Overall, the European battery ecosystem has made much progress over the past years, however the growth of the European battery ecosystem has recently been challenged by several geopolitical and external events slowing down and hampering its expected progress. Additionally, the European automotive industry is under increased pressure from Chinese competition and losing market shares to its competitors, making it difficult to produce EVs at competitive costs.
In this context, a new financial support scheme for EU battery manufacturers which would reward sustainability and resilience is welcomed.
With regards to sustainability, EBA250 especially supports the approach for a dedicated budget which will prioritise the best performers in sustainability, traceability and circularity. Sustainability criteria in cell manufacturing will enable the EU to lead globally and ensure long-term competitiveness of the EU value chain. The new requirements set out in the recently adopted EU Battery Regulation will minimise the carbon footprint of batteries, put forward due diligence requirements on sustainable, ethical and transparent supply of raw materials, and the Battery Passport will foster the production of batteries with the lowest social and environmental footprint in the world.
In order to ensure the resilience of the battery industry, it is also very relevant that the new EU incentive ensures spill-over effects on the entire value chain. Boosting European manufacturing of batteries is crucial where long lead times for access to equipment and material remain a challenge. In addition, further efforts on the upstream segments of the value chain are also required. Upstream activities such as raw and active materials, should also be supported where lack of funding and long lead times affect in particular the processing and refining of raw materials.
Thanks to a strategic approach and concerted efforts by the Commission, Member States, financial and industrial partners coordinated by EIT InnoEnergy, the European Battery Alliance (EBA250) the European battery ecosystems continues to grow. And with this strong focus on awarding sustainable manufacturing, this is very good news for the growth a sustainable European battery value chain EBA250 looks forward to collaborating with both the battery industry and the European Commission going forward.