Commission Approves French State Aid to Battery Producer as Energy Groups call for Low Carbon Fuel Tax Incentives: GMPB

Covered in this week’s Green Mobility Policy Brief: EC approves French State Aid for EV battery manufacturing; Energy groups call for tax incentives for renewable and low-carbon fuel production; T&E President calls for a rethink of mobility policy to focus on accessibility; Transport stakeholders call for EU action on cleaner air.

EU Launches Anti-Subsidy Investigation into Chinese Electric Vehicles

EC approves French State Aid for EV battery manufacturing.

The European Commission has given the green light to a €659 million French State aid initiative designed to boost the development of cutting-edge batteries for electric vehicles. The French support plan for Verkor, the recipient company, involves providing a direct grant of up to €659 million, which will be allocated to the research and development (R&D) project until the conclusion of 2026. Key components of the R&D project include automating electrode production and battery formation through the digitization of processes, enhancing recycling techniques, recovering materials, and designing an innovative pilot production line that can serve as a blueprint for large-scale battery production. Furthermore, Verkor has committed to sharing the technical knowledge and expertise gained through the project with industry and academia, fostering collaboration and innovation in the field of electric vehicle batteries. The European Commission’s assessment of the measure involved a rigorous evaluation of its compliance with EU State aid rules. It was determined that the measure fulfils the criteria established in Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows Member States to support the development of certain economic activities, provided they meet specific conditions. Speaking about the approval, Commissioner Didier Reynders, in charge of competition policy said “This €659 million measure enables France to support Verkor’s research and development project on innovative production processes of lithium-ion batteries, while keeping distortions of competition limited. This is yet another project that will contribute to fostering an innovative battery value chain for electric vehicles in Europe.”

Trickle-down Climate Action? Using Consumer Policy to Clean Up the Automotive Sector

Energy groups call for tax incentives for renewable and low-carbon fuel production.

Ten industry associations, including the European Biodiesel Board (EBB), the eFuel Alliance, the EWABA, the Methanol Institute (MI), and FuelsEurope, have written a letter to European officials calling for tax incentives for renewable and low-carbon fuel production as part of revisions to the Energy Taxation Directive (EDT). In their letter, the signatories state that they “fear that the lack of progress on the ETD recast negotiations will result in a withdrawal of the proposal” and call for the continuation of technical and political negotiations. They also call for “Member States to swiftly reach an agreement to incentivise the production and the use of Renewable and Low-Carbon Fuels, allowing the EU to take a pioneering role in the energy transition” and support the notion that taxation of each energy product consisting of a mixture of one or more blend components should be based on each individual component. This form of discrimination, the signatories claim, will provide a clear invective for the production of renewable and low-carbon fuels. Lastly, the co-signatories call for a ten-year minimum tax rate of zero for intra-EU air and maritime transport.

Sustainable Finance: Council Adopts Green Bond Standard

T&E President calls for a rethink of mobility policy to focus on accessibility.

In a thought-provoking op-ed, Arie Bleijenberg, the President of Transport and Environment, challenged conventional transportation policy goals and called for a fundamental shift in perspective. He argues that while most mainstream transport policy papers claim to aim for “sustainable and affordable mobility for all,” the focus on affordability often leads to significant misconceptions and pitfalls in policymaking. Bleijenberg contends that it is time to shift the focus to “sustainable accessibility” to better achieve social and economic benefits while addressing the challenges of mobility and affordability. Mobility, Bleijenberg asserts, is frequently mischaracterized as a standalone goal in transportation policy, whereas it should be viewed as a means to an end – accessibility. Accessibility, in this context, refers to the ability of individuals to reach important destinations such as jobs, schools, shops, and recreational areas within a reasonable timeframe. To improve accessibility cost-effectively, Bleijenberg advocates for spatial concentration in urban areas, emphasizing the importance of spatial planning integrated with transport planning. On the topic of affordability, Bleijenberg suggests that true pricing for transport should be implemented, even if it means higher taxes and charges, with a focus on compensating low-income groups through increased salaries and social security contributions. In this way, Bleijenberg contends that the burden is shared more equitably, rather than distorting pricing mechanisms that disproportionately favour those who can afford it.

Enabling the Fleet Transition: Sector Outlook and the Crucial Role of Investors

Transport stakeholders call for EU action on cleaner air.

15 prominent companies and associations, including AVERE, Bolt, Micromobility for Europe, and Uber, representing over 100 transport sector entities, have issued a compelling public letter calling for robust measures in support of stricter air pollution limits. Specifically, the signatories state to “stand ready to support the EU’s vision towards Zero Air Pollution by 2050” and outline their support to the Commission’s objective to strengthen the Ambient Air Quality Directive (AQQD), the European air quality standards by 2030, and to align policy with the World Health Organization’s 2021 air quality guidelines. The letter underlines that despite commendable progress made over the past decade, air pollution continues to pose a significant threat to human health and carries substantial economic costs. The toll is estimated to reach a staggering 15 billion EUR annually in terms of lost working days. In a call to action, the co-signatories urge national governments to support an ambitious revision of the Ambient Air Quality Directive, in line with the level of ambition set by the European Parliament in its September 13th vote.

In other news:

Regulation (EU) 2023/2405 of the European Parliament and of the Council of 18 October 2023 on ensuring a level playing field for sustainable air transport (ReFuelEU Aviation) has been published in the official journal of the European Union, and will take effect on 20/11/2023.

See: [Adopted] The Decarbonisation of Aviation: An Insight into the ReFuelEU Aviation Initiative

Image source: EC – Audiovisual Service. Photographer: Olivier Matthys. European Union, 2022