The European Commission has announced a €1 billion funding call to support the production of innovative battery cells for electric vehicles. The initiative aims to subsidize companies and consortia that develop cutting-edge battery cells or employ innovative manufacturing processes and technologies. It remains uncertain whether this financial support will arrive in time for companies like Northvolt, which are currently facing financial challenges.
The funding program, titled ‘IF24 Battery,’ is among the first measures introduced by the new EU Commission in its initial week of service. This initiative is part of a larger €4.6 billion package designed to boost net-zero technologies, electric vehicle battery manufacturing, and renewable hydrogen. The €1 billion allocated for batteries comes from the Innovation Fund, financed by the EU Emissions Trading System. Between 2020 and 2030, the EU anticipates generating €40 billion from emissions trading, which will be distributed as financial incentives to companies and authorities investing in innovative, low-carbon technologies.
Interested companies can apply for funding until April 24, 2025, with successful applicants expected to sign grant agreements by the first quarter of 2026. While the EU Commission has not specified a maximum funding amount per project, proposals will be evaluated based on their potential to reduce greenhouse gas emissions, degree of innovation, project maturity, scalability, and cost efficiency.
For the first time, member states can supplement the Innovation Fund call with national funding programs. This new option allows member states to utilize the Innovation Fund’s evaluation procedures and streamlined state aid approval processes. The Commission describes this initiative as part of a broader strategy to mobilize investment in new technologies.
“Multiple instruments are needed to overcome some of the economic barriers that the battery value chain in Europe, including its gigafactories, is currently facing. The Commission will continue to deploy instruments at hand and engage in new avenues, including in the short term, for addressing barriers to large-scale industrial scale-up,” stated the new Commissioners. The financial struggles of companies like Northvolt and the Automotive Cells Company underscore the urgent need for such support.
In addition, the Commission, together with the European Investment Bank (EIB), has launched a new partnership to support investment in the battery industry. Through the ‘InvestEU’ program, an additional €200 million from the Innovation Fund will support innovative projects along the European battery manufacturing value chain. This funding aims to address financing challenges by enabling additional EIB venture debt operations over the next three years, directly targeting the industry’s investment hesitancy.
Simultaneously, the Commission has initiated the second tender of the European Hydrogen Bank (‘IF24 auction’) to accelerate renewable hydrogen production within the European Economic Area. With a budget of €1.2 billion from EU funds and over €700 million from three member states, this initiative also taps into the Innovation Fund. It aims to support projects producing hydrogen from renewable energy sources, regardless of the consuming sector. Notably, €200 million of the €1.2 billion is specifically allocated for the maritime sector.
“By investing more than €4.5 billion in clean technologies at the very beginning of the mandate, the Commission is showing its commitment to deliver on its decarbonisation objectives, and to support European industries’ competitiveness in key strategic sectors,” said Teresa Ribera Rodríguez, Vice-President for Clean, Just and Competitive Transition. “The new resilience criteria for hydrogen and batteries will boost Europe’s industrial leadership and competitiveness while enhancing the EU’s strategic autonomy.”
Source: Electrive
