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A BMW I3 electric car charges its battery outside the BMW factory on May 20, 2019 in Leipzig, GermanySean Gallup/Getty Images

Commission approves pan-EU battery project

The plan aims to invest more than €8 billion in battery projects across Europe over the coming decade.

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The European Commission's competition authority on Monday approved plans to funnel billions of euros of public cash into a multicountry battery project — part of an effort to set up an industry that can compete with dominant Asian producers.

"We have found the right recipe for our 21st century industrial policy," said Maroš Šefčovič, Commission vice president in charge of running the EU's battery alliance.

The plan builds on a Franco-German initiative to promote battery cell production and broadens it into a bloc-wide initiative covering everything from raw materials needed in manufacturing to cell production and recycling.

The project involves multiple sites across Europe, with France leading on the scheme alongside Germany, Belgium, Finland, Poland, Sweden and Italy. Some 17 companies are directly affected by the plan, with another 70 in the supply chain, the Commission said.

Government grants come to €3.2 billion, and a further €5 billion of private investment expected to be plowed in, the Commission said in a statement. Production will start at a site in France in 2022, the French economy ministry said Monday, creating thousands of jobs. The entire chain of projects should be completed in 2031.

Big automakers such as BMW, PSA Group and Opel are involved, alongside industrial and energy heavyweights such as Umicore, Solvay, BASF and Fortum.

Germany is the biggest total investor, offering up €1.25 billion, while France is chipping in €960 million, underscoring how important the industry is to both countries. Italy, with €570 million, and Poland, putting in €240 million, are also big battery spenders; Belgium is offering €80 million, Sweden €50 million and Finland will invest €30 million.

The Commission's state aid approval comes under the so-called project of common interest scheme, which gives the Brussels leeway to wave through public support if projects are aimed at promoting cross-border links and meeting bloc-wide targets.

Margrethe Vestager, the Commission's new executive vice president covering competition, said battery production was of "strategic interest for our economy," noting that jobs could be created as well as the knock-on effect for clean mobility.

For France and Germany, the plan offers a hint of the new Commission's approach to boosting industrial champions that can compete with insurgent players such as China's CATL in the battery market.

Vestager this summer killed a plan by the two countries to combine Alstom and Siemens to create a railway company large enough to compete with China's rail giant CRRC.

"We want to build the most innovative and sustainable batteries in Germany and Europe, thereby securing added value and jobs in Europe," Germany's Economy Minister Peter Altmaier said on Monday.

Thibault Larger contributed reporting.

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