(1)

The Union is committed to achieving climate neutrality by 2050 and reducing net greenhouse gas emissions by at least 55 % by 2030, in line with the European Green Deal and the as set out in Regulation (EU) 2021/1119 of the European Parliament and of the Council (4). The Clean Industrial Deal, as set out in the Commission Communication of 26 February 2025 (5), underscores the need to align industrial competitiveness with climate ambition, ensuring that the transition to a climate-neutral economy is both just and economically resilient. That requires a robust and competitive European battery sector.

(2)

Currently, the European battery sector faces structural challenges to achieve the necessary competitive scale in a context of global overcapacity across the battery value chain, particularly during the ramp-up phase. Moreover, European battery manufacturers are competing in a global context where a level-playing field is distorted by non-EU subsidies.

(3)

Considering the objective of the Net Zero Industry Act Regulation (EU) 2024/1735 of the European Parliament and of the Council (6) which establishes a framework of measures for strengthening Europe’s net-zero technology manufacturing sector and support for the deployment of clean technologies, it is necessary to provide targeted financial measures to support the current development of projects in the Union, encourage further private sector investment and boost the security of supply of the automotive and energy storage industries.

(4)

On 16 December 2025, the Commission adopted a Communication (7) setting out a battery booster strategy. That strategy supports a resilient and sustainable battery sector in Union and enhances cost competitiveness in Union’s battery production, building on initiatives such as Regulation (EU) 2024/1735, the Automotive Action Plan set out in the Commission Communication of 5 March 2025 (8) and the Strategic Action Plan for Batteries set out in the Commission Communication of 17 May 2018 (9). The Battery Booster Strategy describes the sub-optimal investment situation of the battery manufacturing sector, particularly during the ramp-up phase of projects, pointing out to the critical need to support battery production in the EU in response to the pressing international challenges and the difficulties the industry faces in scaling up production. The Battery Booster Strategy also includes targeted policy measures that will strengthen the Union battery industry, including the establishment of a Battery Booster Facility to support investments.

(5)

Such support is particularly necessary during the ramp-up phase of battery manufacturing projects, which involves transitioning to high-volume, high-precision manufacturing while balancing low yields, high material costs, and intense quality requirements. The ramp-up phase follows the construction and installation of production facilities. During that phase all systems, equipment, and processes undergo extensive testing, validation, and fine-tuning to ensure efficient and effective operations. It is characterised by high scrap rates, making it difficult to achieve profitability and meet strict quality standards required by the automotive sector. The Battery Booster Facility should therefore specifically provide support for this sensitive and complex stage of the process. The Battery Booster Facility should constitute support from the Innovation Fund established pursuant to Article 10a(8) of Directive 2003/87/EC in the form of financial instruments under direct management.

(6)

Acknowledging the critical importance of effective financial support during the ramp-up phase of battery production, loans offer distinct advantages over grants in this context. Loans encourage efficient capital management and align with the goal of sustainable and accountable growth in battery production. They encourage companies to reach commercial viability faster and are therefore better suited for scaling and commercialisation of production. Furthermore, they complement and attract further private sector investment, providing a robust financial framework to stabilise the industry in the EU. Accordingly, the Battery Booster Facility support should take the form of loans as the instrument that best supports companies in the ramp-up phase.

(7)

In order to support ramp-up phase of battery production financially, it is necessary to tailor the loans from the Battery Booster Facility to the specific requirements of the ramp-up phase. That should include concessional elements such as granting loans free of interest.

(8)

Pursuant to Article 15(1) of Delegated Regulation (EU) 2019/856, it is necessary to lay down the maximum amount of the Innovation Fund support available for the Battery Booster Facility, and rules for the selection of projects and for disbursements of the support.

(9)

Battery cell manufacturers that already have directly or indirectly experience in the development of fully commercial projects, can be considered to have already gained know-how with completing in the ramp-up phase and should, therefore, be considered not eligible for the support under the Battery Booster Facility.

(10)

The loan agreement resulting from the award of support under the Battery Booster Facility should set out a repayment schedule appropriate for mature projects while also taking into account the existing financial structures of the projects. In order to be able to adapt to the commercial reality of battery production while ensuring the continuity of the support, projects should be able to defer repayment schedule subject to an interest rate, which should be stipulated in the loan agreement. Relocation of battery manufacturing activities outside the European Economic Area (EEA) after receiving the support from the Battery Booster Facility should be penalized with appropriate contractual remedies, in order to ensure a durable impact in European industrial competitiveness.

(11)

In order to ensure the implementation of the Battery Booster Facility, it is necessary to adopt an annual financing decision in accordance with Article 110(2) of Regulation (EU, Euratom) 2024/2509 (‘the Financial Regulation’).

(12)

The Battery Booster Facility will facilitate the development of battery cell manufacturing in Europe. Battery cell manufacturing in Europe operates under challenging market conditions, as outlined in the Battery Booster Strategy Communication, and therefore has been recognised by the European Commission as being in need for a temporary funding solution. The Battery Booster Facility targets projects with high potential for success anywhere in the EEA, which makes it more likely that the support will facilitate the development of the economic activity. The support granted under the Battery Booster Facility will facilitate battery cell manufacturers to ramp-up production by contributing to the financing needs of that phase. The set eligibility and award criteria and the other terms of the Battery Booster Facility create the basis for the Commission to ensure that the support, in the form of repayable interest-free loans, is necessary, appropriate, proportionate and transparent. Balancing the above elements, the Commission considers that the support to be granted under the Battery Booster Facility is consistent with State aid rules, within the meaning of Article 212(2) point (c) of the Financial Regulation.

(13)

Pursuant to Article 10f of Directive 2003/87/EC, the Battery Booster Facility should support projects that comply with the ‘do no significant harm’ principle. The selection process should therefore ensure that projects meet the minimum environmental requirements and do not significantly harm any of the environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council (10).

(14)

Repayments and reflows related to the financial instruments provided from the Battery Booster Facility will be used to support innovation in low- and zero-carbon techniques, processes and technologies in accordance with Article 10a(8) of Directive 2003/87/EC.

(15)

Member States have been consulted on this decision, in accordance with Article 15 of Delegated Regulation (EU) 2019/856.

(16)

Due to the urgent need to deploy the Battery Booster Facility and enable the organisation of call for proposals, it is proposed that this Decision enters into force the day following the day of publication,

(a)

‘battery’, means as defined in Article 3(1), point (1), of Regulation (EU) 2023/1542 of the European Parliament and of the Council (11);

(b)

‘battery cell’, means as defined in Article 3(1), point (4), of Regulation (EU) 2023/1542;

(c)

‘electric vehicle battery’, means as defined in Article 3(1), point (14) of Regulation (EU) 2023/1542;

(d)

‘ramp-up phase’ means the transitional period of a production site for electric vehicle battery cells, or parts thereof, starting with the start of the pre-series C-Sample production phase and ending when full commercial operation is achieved. Full commercial operation will be the stage at which the battery manufacturing facility achieves sustained production output of at least 95% of the nominal annual production capacity;

(e)

‘C-Sample phase’ means the moment at which the battery cell design is substantially finalised and validated through prototypes manufactured using representative industrial-level processes and equipment, making them ready for the purpose of customer qualification phase.