Europe approves €95m aid for LG Chem battery plant 

Business news |
By Nick Flaherty

The European Commission has approved a subsidy of €95m to expand a battery plant in Poland.  

The investment aid will support the expansion of LG Chem’s battery cell production facility for electric vehicles in the Polish Dolnośląskie region.  

“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,” said Margrethe Vestager, commissioner for competition policy. “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 in its existing plant in Dolnośląskie, supported by the Polish government. The new plant is expected to supply batteries for more than 295,000 vehicles in Europe. 

The commission opened an investigation into the subsidy in August 2020 under regional state aid rules, looking at whether the decision by LG Chem to expand its battery production capacity in Poland was directly triggered by the Polish public support or whether it would have been carried out in that area even without public support. It also found that LG would have built a plant outside Europe without the support. 

This also comes as the commission has backed indigenous battery manufacturing plants from Northvolt.; 

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