Industry calls on EU to simplify state aid for cleantech factories
To date, Europe has failed to establish a truly comprehensive battery value chain – with the situation scarcely being better for solar modules and hydrogen. Industry stakeholders and environmental organisations are determined to change this and have issued a funding appeal to Brussels. The letter is addressed to the European Commission ahead of the Electrification Action Plan, expected on 15 July.
While the signatories welcome the EU’s recent industrial policy initiatives – including the proposed Industrial Accelerator Act and the Clean Industrial Deal – they argue that current state aid rules are insufficient to effectively support the planned expansion of Europe’s cleantech industry. At the heart of their criticism is the Clean Industrial Deal State Aid Framework (CISAF). According to the signatories, current funding instruments for large-scale production projects are overly complex and provide businesses with too little planning certainty. In particular, they highlight the lack of reliable production-linked subsidies that investors could factor in before constructing new factories, that could otherwise facilitate private investment.
Specifically, the organisations propose amending state aid law to introduce time-limited production premiums for strategic net-zero technologies. They suggest fixed grants per unit produced – for example, per kilowatt-hour of battery cells, per kilogram of renewable hydrogen, per watt of solar modules, or per kilometre of high-voltage cable. At the same time, the signatories advocate for transparent funding criteria, time-limited aid, caps per company, and faster approval procedures. Eligibility should be restricted to companies with substantial value creation and operational presence within the European Union.
Furthermore, the signatories emphasise that revising the CISAF must not replace European funding programmes. Instead, it should complement future instruments such as the planned European Competitiveness Fund. The goal is to mobilise private investment more effectively and accelerate the development of strategic manufacturing capacities in Europe. These demands are set against the backdrop of the European Commission’s Electrification Action Plan, expected in mid-July. The plan aims to accelerate the electrification of transport, industry, and heating while reducing Europe’s dependence on fossil fuels. According to the signatories, this also presents an opportunity to significantly expand European production of batteries and other cleantech technologies.
The debate comes at a time of intensifying competition internationally for investment in cleantech factories. While the EU revises its industrial policy tools, other economic regions – particularly China – are rolling out extensive funding programmes.
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