EU approves €95 million Polish aid for LG Chem battery plant

EU approves €95 million Polish aid for LG Chem battery plant

European Commission's investigation concluded that Polish financial grant is in line with EU State aid rules

  • By ICN Bureau | March 20, 2022
The European Commission has found that Poland's €95 million measure in favour of LG Chem Group is in line with EU State aid rules. The investment aid will support the expansion of LG Chem's battery cell production facility for electric vehicles in the Polish Dolnośląskie region. The aid will also contribute to the development of the Dolnośląskie region, whilst preserving competition.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Our in-depth investigation has confirmed that Poland's €95 million public support to expand the production capacity of an LG Chem's electric vehicles battery plant is in line with our State aid rules. The aid will contribute to job creation and to the economic development of a disadvantaged region, without unduly distorting competition."
In 2017, LG Chem decided to invest €1 billion to expand its production capacity of lithium-ion cells, battery modules and battery packs for electric vehicles (EV) in its existing plant in the Polish Dolnośląskie region. The new plant is expected to supply batteries for more than 295,000 EV each year in the European Economic Area (EEA).
The Commission's investigation showed that the aid was limited to the minimum necessary to incentivise LG Chem to carry out the investment in Poland, as it did not exceed the amount necessary to increase the profitability of the project in Poland to the same level as the one in the third country. Additionally, the Commission found that the investment aid will contribute to job creation, as well as to the economic development and to the competitiveness of the disadvantaged region of Dolnośląskie.
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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