Battery production: Germany first EU country to match US subsidies

(EurActiv, 8 Jan 2024) Germany will provide €902 million to Swedish battery maker Northvolt, as the first country to make use of the European Commission’s new subsidy “matching” scheme that allows EU countries to counter foreign subsidies with their own offers.

In February 2023, the European Commission unveiled new temporary measures to ease strict rules on national subsidies (“state aid”), allowing countries to match offers of third countries if they would otherwise result in production being lured away from Europe.

On Monday (8 January), the Commission announced that this new option was used for the first time, approving subsidies for Swedish battery maker Northvolt to build a production site in Heide, Germany.

“Matching aid is a new feature that we are using,” EU competition chief Margrethe Vestager told journalists.

“We have it in the Temporary Crisis and Transition Framework in order to make sure that if companies are offered aid in other jurisdictions, then if a member state is willing, that they can match the aid in order for the investment to take place in Europe,” she added.

Batteries for electric vehicles are considered to be of strategic importance to reach the EU’s climate targets, which include a de-facto ban on the sale of new diesel and petrol cars as of 2035. 

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EurActiv, 8 Jan 2024: Battery production: Germany first EU country to match US subsidies