EU earmarks €1.8b to boost battery raw materials supply chain

European Commission on Wednesday unveiled an action plan to strengthen the automotive industry's resilience and sustainability, committing 1.8 billion euros to developing a competitive supply chain for battery raw materials within the European Union (EU), reported Xinhua.

According to a statement from the Commission, the action plan builds on the "Strategic Dialogue on the Future of the Automotive Industry," launched in January by Commission President Ursula von der Leyen.

The action plan aims to lower costs for EU-produced electric vehicle (EV) battery cells and components in the short term, said the Commission.

The plan also introduces a "battery booster" package, which includes direct funding, non-price criteria for components, and competitive loans to accelerate the production of EV battery cells and components.

In addition, the EU plans to introduce legislation this year to define local content requirements for EV batteries and components, reinforcing the region's position in the global battery market.

A proposal to amend the carbon dioxide (CO2) standards regulation is also part of the action plan, with changes expected in March. The amendment aims to provide car manufacturers with greater flexibility in meeting emissions targets, said the Commission.

Under the proposed changes, automakers would be allowed to average CO2 emissions over a three-year period from 2025 to 2027. This approach would enable them to offset shortfalls in one or two years with surplus reductions in others, ensuring compliance with climate goals.

Despite these adjustments, the Commission reaffirmed its commitment on Wednesday for all new cars and vans sold in the EU to achieve zero CO2 emissions by 2035.