The European Commission has approved a €837 million Spanish scheme to support the production of batteries for the industrial chain of electric and connected vehicles to foster the transition to a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022.

The Spanish measure

Spain notified to the Commission, under the Temporary Crisis and Transition Framework, a €837 million scheme to support the production of batteries for the industrial chain of electric and connected vehicles.

Under this scheme, which will be partially funded through the Recovery and Resilience Facility (‘RRF’), the aid will take the form of direct grants and loans.

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The measure will be open to companies producing batteries, their essential components and related raw materials.

The maximum aid amount per beneficiary will (i) range between €100 million and €300 million for investment in the field of batteries, depending on whether it takes place in an assisted area or not; (ii) not exceed €100 million for investments in essential components; and (iii) not exceed €25 million for investment in raw materials.

The Commission found that the Spanish scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will incentivise the production of relevant equipment for the transition towards a net-zero economy; and (ii) will be granted no later than 31 December 2025.

The Commission concluded that the Spanish scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.

On this basis, the Commission approved the aid measure under EU State aid rules.