EU approves €209 million Hungarian aid for SK battery plant
European Commission's investigation concluded that Hungarian financial grant is in line with EU State aid rules
The European Commission has found that Hungary's €209 million measure in favour of SK On Hungary is in line with EU State aid rules. The investment aid will support the construction of a new battery cell manufacturing plant in the Közép-Dunántúl region. The aid will also contribute to the development of the region and job creation, whilst preserving competition.
SK On Hungary (formerly SK Battery Hungary) is part of the SK Group, a global South Korean company active in various industries, including energy, chemicals, semi-conductors, information and communications technology, logistics and services.
In December 2021, Hungary notified the Commission of its plans to grant €209 million to support SK On Hungary in the construction of a new plant for the manufacturing of lithium-ion battery cells and battery modules for electric vehicles.
The plant will have an annual capacity of 30 GWh and is expected to create at least 1,900 direct jobs. SK On Hungary's total investment into the project, which started in early 2021, will be of €1,623 million.
The investment aid will contribute to job creation, as well as to the economic development and to the competitiveness of a disadvantaged region. In the absence of the public funding, the project would have been carried out in a more developed European region than Central Transdanubia and the aid is limited to the minimum necessary to trigger the investment in Hungary and complies with all aid intensity requirements.
On this basis, the Commission concluded that the positive effects of the project on regional development clearly outweigh any possible distortion of competition brought about by the State aid. The Commission therefore approved the measure under EU State aid rules.
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