Thursday, March 30, 2023

The EU responds to the US and approves a new regulation that increases subsidies for battery factories forocarselectricos

The European Union will respond to the Inflation Reduction Act of the United States of America with a series of measures to prevent the flight of investment in North America. Among other things, the European Commission has adapted the rules of state aid to facilitate the verification process for those subsidies for sectors such as batteries or innovations.

As readers may recall, the law approved by the Biden administration credits $35 per kWh of annual capacity to cell manufacturers that manufacture cells on US soil. Considering that battery plants usually have a capacity of ten GWh, the aid would amount to billions of dollars for each plant.

The European reform gives member countries more room to maneuver when it comes to granting public funds, whether in the form of grants, credits or tax credits. In addition, in those cases in which there is a high risk of relocation, assistance from a non-European government can be satisfied to keep the company in the European Union.

This modification of the regulations is temporary and will initially only apply until the end of 2025. On paper, all this should mitigate the large migration of machine tools in the United States of America, since there are already several companies that have made public intentions. they make their investments in that country.

By 2030, Volkswagen will have 6 battery gigafactories in Europe

The measures used by the EU are temporary

“The regulation that we have adopted today gives Member States the option to provide public aid in a fast, clear and predictable way. Our rules allow Member States to accelerate investments in this time of crisis, while protecting the playing field of the single market and the objectives of coherence. The new rules are proportionate, specific and temporary,” explains Margrethe Vestager, Executive Vice President of the European Commission, who is in charge of Competition and the Digital Age.

Thomas Schmall, a member of Volkswagen’s board of directors and head of the parts division, warned that a loss of European competitiveness could occur in the coming days if the authorities do not act quickly on the policies adopted by the United States.

“Today the fight is being led by Asian teams. And while the United States is catching up with the Inflation Reduction Act, Europe is falling further and further behind. The IRA’s words are so beautiful that Europe risks losing the race for billions in loans decided in the coming months and years.”

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news