Ten months ago, the European Commission adopted a new instrument that would allow European governments to equalize inflation to counteract the impact of the United States Inflation Reduction Act (IRA). public subsidies from third countries Thus, they prevent companies from escaping. This Monday, Community Management used this mechanism to authorize for the first time. Germany giving 902 million euros in public aid to Swedish company Northvolt To build a battery factory in Heide and prevent it from going to the United States.
“The aid will allow Northvolt to invest in a ‘gigafactory’ to produce battery cells for electric vehicles in Europe rather than the United States,” the executive vice president and competition commissioner said. Margrethe Vestager, He appeared in the press room for the first time since the resumption of his activities at the Commission, following the failure of Spaniard Nadia Calviño’s attempt to take over the presidency of the European Investment Bank, which she had held since January 1.
Of the 902 million aid, 700 million will be direct subsidies and 202 million will be guarantees. The company’s intention is to start production in 2026 and reach full capacity in 2029. As announced by the commission, the Heide plant will have an annual capacity of 60 GWh, which means: Between 800,000 and 1 million electric vehicles per yearDepending on the size of the battery.
Avoid industrial migration
This is the first time Brussels has used an exceptional measure approved at the beginning of March last year to combat the green subsidy scheme promoted by the Joe Biden Administration and prevent the exodus of European industry to the other side of the Atlantic. “It is the first individual measure to be approved in line with the exceptional possibility of the Temporary Crisis and Transition Framework, which would allow for the provision of greater amounts of aid if investments risk being diverted from Europe due to the presence of foreign subsidies. Standing next to the German vice-chancellor, Vestager added: Robert Habek.
Both defended the appropriateness of this aid plan due to the threat posed to Europe and its dependence on third countries to deliver this aid. green and digital transition in areas such as batteries, semiconductors or solar panels. “We need a more robust industry for new sectors: semiconductors, batteries, electrolysis and hydrogen,” said Habeck, who, like Vestager, assured that without aid, production would have moved to the USA; The United States also offered assistance. company. Germany also rejected the allegation that Berlin was taking advantage of the budget margin to attract public investments against the interests of other Member States.
“The real competition we face is not between Germany, Italy, Denmark or the Netherlands. It is between Europe, China and the USA. (…) I am ready to do everything possible only so that the internal market works properly and also that smaller countries with weaker economies or less firepower and higher debts have their own opportunities “, he added.
Vestager explained that they take ensuring a level playing field very seriously and that one of the elements analyzed is whether the payments put any Member State at a disadvantage. In addition to 902 million for the Swedish plant, Brussels also has a French state aid 2.9 billion to support Production of batteries, solar panels, wind turbines and heat pumps, relevant key component and critical raw materials. The Commission approved similar programs totaling $9.1 billion in Austria, Belgium, Germany, Hungary, Italy, Slovakia and Spain.