The European Commission has established a new Battery Booster Facility to channel up to €1.5 billion from revenues generated by the EU Emissions Trading System into Europe’s battery cell industry. The initiative aims to provide interest-free loans to manufacturers and support the scale-up of production capacity across the European Economic Area.
Projects seeking support under the facility must focus on battery technologies designed primarily for electric vehicles, although off-take agreements may accommodate other applications. Eligible manufacturing plants must be located within the EEA and have a minimum annual production capacity of 10 gigawatt-hours. Individual projects can request up to €500 million in interest-free financing. The loan-based approach is intended to encourage sound capital management, accelerate commercial viability, and leverage additional private-sector investment rather than relying solely on grants.
Applications will be assessed on technical and financial maturity, as well as their economic impact within Europe. Following the facility’s formal adoption, the Commission plans to launch a call for proposals in the third quarter of 2026, with submissions open for approximately six weeks. Successful applicants are expected to be notified by the end of the year, with the first disbursements scheduled before the close of 2026.
This new facility builds on prior Innovation Fund measures aimed at strengthening Europe’s battery ecosystem. In December 2024, the fund issued a separate €1 billion call for proposals targeting EV battery cell manufacturing and provided a €200 million top-up to the InvestEU guarantee in collaboration with the European Investment Bank. Financed by ETS auction revenues, the Innovation Fund supports the deployment of innovative net-zero technologies, bolstering the EU’s industrial manufacturing capacity.
Commissioners have emphasized that the Battery Booster Facility will intervene at a critical phase of industrial scale-up, attracting private investment and reinforcing Europe’s strategic autonomy in clean technologies. By converting the costs of carbon emissions into funding for innovation, the facility aims to secure a resilient and competitive battery value chain—from raw materials through recycling—and underpin the continent’s transition to electric mobility.
Source: European Commission Directorate-General for Climate Action
