A coalition of industrial companies, investors and industry associations has called on the European Commission to revise its state aid framework, arguing that clearer and more predictable incentives are needed to encourage investment in battery manufacturing and other clean technology industries across Europe.
In an open letter sent ahead of the European Commission’s expected Electrification Action Plan on July 15, the group said current funding mechanisms do not provide sufficient certainty for companies planning large-scale manufacturing projects.
The signatories welcomed recent EU industrial policy initiatives, including the proposed Industrial Accelerator Act and the Clean Industrial Deal, but said the existing Clean Industrial Deal State Aid Framework (CISAF) remains too complex and lacks production-based incentives that could attract private investment.
Production-Based Support Proposed
The coalition is calling for changes to state aid rules that would allow temporary production premiums for strategic net-zero technologies.
Under the proposal, manufacturers would receive fixed payments based on output, such as per kilowatt-hour of battery cells produced, per kilogram of renewable hydrogen, per watt of solar modules manufactured or per kilometre of high-voltage cable.
The organisations also proposed transparent eligibility criteria, faster approval procedures, limits on aid available to individual companies and funding restricted to businesses with significant manufacturing activities and value creation within the European Union.
Complement Existing EU Funding
The signatories said the proposed reforms should complement, rather than replace, future European funding programmes, including the planned European Competitiveness Fund.
According to the coalition, combining production-linked incentives with broader EU funding programmes would help mobilise private capital and accelerate the expansion of strategic manufacturing capacity for batteries and other clean technologies.
Growing International Competition
The appeal comes as the European Union seeks to strengthen domestic manufacturing for batteries, solar modules, renewable hydrogen and other low-carbon technologies while reducing dependence on imported fossil fuels.
The organisations said the Commission’s upcoming Electrification Action Plan provides an opportunity to expand Europe’s cleantech production capabilities as transport, industry and heating become increasingly electrified.
They also noted that global competition for investment in clean technology manufacturing continues to intensify, with other regions, particularly China, maintaining extensive support programmes aimed at attracting new industrial projects.
