The US Inflation Reduction Act was intended to boost investment in US battery manufacturing, and it appears to be working—so well, in fact, that European battery producers are becoming alarmed.
The European Battery Alliance (EBA), a group of around 800 industry stakeholders that was founded in 2017, has presented what it calls a “crisis proposal” for €100 billion in new investment to keep funds flowing for EU battery gigafactory plans.
The group’s analysis indicates that the US is outpacing the EU in the race to secure investment for battery gigafactories, while emerging markets such as India and Malaysia are also rapidly building battery production capacity.
The IRA includes billions of dollars in incentives for US battery plants, and similar support schemes are in place in Canada, Japan and South Korea.
A Joint Statement issued by the EBA contends that permitting procedures for battery and raw materials projects in the EU and member states “lack speed and clarity, compared with that of other global economies…contributing to additional risks and delays in investment and project execution.”
As InnoEnergy reports, the EBA’s report has “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.”
The proposed battery 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.”
“Measures are urgently needed at EU, Member States and local levels to accelerate and de-risk investments, speed up industrial projects and ensure our European global competitiveness,” said the EBA in its Joint Statement.
The organization has sent a proposal to the European Commission for an “emergency package” of measures to unlock over 100 billion euros in investments. The package includes “financial incentives to accelerate investments in the EU, emergency measures to shorten and ease industrial permitting for raw materials, materials and industrial projects, and other actions to boost the global leadership and long-term competitiveness of the European battery value chain.”
Sources: InnoEnergy, Batteries International