December 15, 2022: The European Battery Alliance (EBA) today unveiled crisis proposals in a €100 billion ($106 billion) bid to avert a potential investments meltdown for EU battery gigafactory plans, as latest analyses indicate cash is instead flowing into projects in the US and Asia.
The move came as analysis showed the US is already outpacing the EU in the giga investment race, while gigafactories being built in emerging markets such as India and Malaysia will have a combined battery production capacity of 104GWh by 2030 — as reported separately today.
The EBA revealed that talks had been held on December 8, with EU Commission VP and batteries czar Maroš Šefčovič (pictured), highlighted damage being done to Europe’s fledgling battery plans by billions of dollars in incentives for plants being awarded under the US Inflation Reduction Act (IRA), similar support schemes in Canada, Japan and South Korea and Europe’s “unbroken dependencies” on Asia.
A statement issued after the talks, published online by the EBA on December 15, admitted that permit procedures for battery and raw materials projects in the EU and individual member states of the bloc “lack speed and clarity, compared with that of other global economies… contributing to additional risks and delays in investment and project execution”.
The statement warned: “The upcoming weeks will be decisive for decision makers to act and prevent the outflow of investment from Europe.”
The crisis has already overshadowed the European Commission’s announcement on December 9 that a provisional deal had been agreed paving the way to introduce the long-awaited Batteries Regulation.
However, the new batteries law still requires secondary legislation to be passed between 2024 and 2028 before it can become fully operational — highlighting the glacial pace of decision-making in the EU at a time when the battery industry is crying out for urgent attention.
Proposals discussed at the Šefčovič talks centre around emergency measures to “unlock” more than €100 billon of investments and speed up projects through 2023-2024 — and make the entire battery manufacturing chain, including raw materials through to recycling, a priority for cash awards under a planned new EU sovereignty fund.
New temporary state-aid rules are also proposed to be rushed through to ensure cash can be quickly pumped into battery-related projects, together with fast-tracking planning applications and permits for battery-related projects.
Meanwhile, an energy task force is proposed to ensure spiralling energy costs in the wake of the Russia-Ukraine war are brought to a “competitive level” across the EU in the next two years.
EU chiefs have also been urged to find ways to “combine European measures” with US incentives laws and to strengthen collaboration with the US government.
However, it is not clear if, when or how the proposals might be adopted.
Photo: Mauro Bottaro/EC Audiovisual service