The European Commission has given its approval to a Spanish scheme worth €837 million that aims to support the production of batteries for electric and connected vehicles. The objective is to promote the transition to a net-zero economy, aligning with the Green Deal Industrial Plan. This scheme falls under the State aid Temporary Crisis and Transition Framework, which was adopted by the Commission on March 9, 2023. The framework enables measures to be implemented in sectors crucial for accelerating the green transition and reducing reliance on fossil fuels. The Temporary Crisis Framework, which was adopted on March 23, 2022, and subsequently amended on July 20, 2022, and October 28, 2022, has been partly amended and extended by the new Framework.
Spain submitted the scheme to the Commission for approval under the Temporary Crisis and Transition Framework. The scheme, with a budget of €837 million, aims to provide support for battery production within the industrial chain of electric and connected vehicles. The aid will be in the form of direct grants and loans and will receive partial funding from the Recovery and Resilience Facility (RRF).
The measure will be accessible to companies involved in the production of batteries, essential components, and related raw materials. The maximum amount of aid per beneficiary will vary depending on whether the investment takes place in an assisted area or not. For battery-related investments, it will range between €100 million and €300 million. Investments in essential components will not exceed €100 million, while investments in raw materials will not exceed €25 million.
The Commission determined that the Spanish scheme complies with the conditions outlined in the Temporary Crisis and Transition Framework. It found that the aid will encourage the production of necessary equipment for the transition to a net-zero economy and will be granted by December 31, 2025.
Consequently, the Commission concluded that the Spanish scheme is necessary, appropriate, and proportionate in accelerating the green transition and supporting the development of economic activities crucial for the implementation of the Green Deal Industrial Plan. The approval of the aid measure aligns with Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU) and the conditions specified in the Temporary Crisis and Transition Framework.