We have all grown up aware that batteries are a useful element in our daily lives - for powering our mobile phones, watches, torches or laptops. As an energy device batteries are indispensable - they make these items portable and more convenient. And we have probably all taken them for granted, and occasionally felt let down when the alarm clock didn’t work or mobile phone ran out of juice. However familiar they may be to us, most people are not fully aware of the absolutely crucial role that batteries can play in the fight against climate change and the future energy system as we strive to create a carbon-neutral economy in the EU by 2050.
The variable nature of renewable energy resources means that storing energy will play a key role in mitigating climate change. Creating sustainable and competitive energy storage solutions is therefore the next big challenge. As EU policymakers focus on raising our ambition for reducing greenhouse gas emissions, batteries have steadily been moving to the forefront of the discussion, not only due to the rapid rise of e-mobility, but also to their capacity to balance supply and demand within the electricity system.
Clean energy and competitiveness
Batteries are the fastest growing storage technology and will play a key role to meet the EU goal of cutting greenhouse gas emissions by 55% by 2030.
In the energy sector, storage technologies can facilitate up to 40 services for electricity systems, including generating, transmitting and distributing the electricity, as well as increasing the self-consumption of solar and other renewable electricity sources by households, commercial buildings and industrial facilities across the EU. Batteries’ contribution is especially significant for renewables, as solar and wind power remain fluctuating sources with varying levels of energy produced. Batteries can store electricity and compensate for the moments when the wind is not blowing, the sun is blocked by clouds, or has set for the night.
In the transport sector, the share of battery-driven vehicles is expected to rise dramatically. Already today, the overall cost for owning an electric car is comparable to petrol cars. While the purchase price of electric cars can be relatively high, they are cheaper to run, as electricity costs less and is taxed less than petrol. Electric vehicles are also cheaper to maintain. The difference in the purchase price of a new electric car and a new petrol car is expected to disappear within the current decade. This will be the ultimate game-changer on the car market. Besides being used for transport, electric vehicles will also provide an additional bonus for those that have invested in roof-top solar panels - whether public, corporate or private investors - and reduce electricity bills. Indeed, electricity from the batteries of parked cars can be used for domestic needs, when electricity prices are high, or even sold into the grid.
From a competition perspective, battery production is of increasingly strategic interest for the EU economy and society. This is why the EU supports and helps finance several initiatives that boost further innovation and uptake in batteries. Traditionally, most batteries on the market (in terms of electricity stored) were lead-acid batteries. These were mainly used to start petrol cars or to provide a backup for uninterrupted electricity supply in case of unforeseen outages. The EU has a strong position in this market, but as needs have changed and technology evolved, the e-mobility boom has now moved lithium-ion batteries to the forefront.
Until recently, only 2 European companies, Saft from France (now owned by Total) and VARTA from Germany, were strong in lithium-ion battery niche battery markets, such as space applications or hearing aids. No European companies were producing lithium-ion batteries for mass markets and this part of the EU market was dominated by Asian producers. But the situation is changing. More and more companies are creating factories for lithium-ion battery manufacturing in Europe, for example:
- EU-based Northvolt is constructing Europe’s largest giga-factory for lithium-ion battery cells in Sweden and will continue with a giga-factory in Germany
- a joint venture between Total and the car manufacturing group PSA (involving Peugeot, Citroen, DS, Opel and Vauxhall) will establish mass-production battery plants in France and Germany
- VARTA is targeting further expansion of its lithium-ion battery production in Germany and beyond.
At the same time, Asian companies, such as LG Chem, Samsung SDI, CATL and SK Innovation, as well as the US giant Tesla, are advancing with their giga-factory projects in different EU countries.
EU action on batteries
The EU is stepping up its effort on batteries through an industrial push, a robust policy framework and vigorous research and innovation.
Renewable Energy Directive
Directive on batteries and waste batteries
Revised Renewable Energy Directive
CO2 norms for cars and vans
Directive on the deployment of alternative fuels infrastructure
European Battery Alliance
New renewable energy targets and provisions on charging points in buildings
Interregional partnership on advanced battery materials
Batteries Europe technology platform and Business Investment Platform
Revision of electricity market rules
New CO2 norms in transport sector
Revised clean vehicles directive
First Important Project of Common European Interest on batteries
Proposal for EU Regulation on batteries and waste batteries
Second Important Project of Common European Interest on batteries
Public-private partnership on batteries under Horizon Europe
Legislative package to accommodate new 2030 target for emission reduction: Fit for 55
2017 marked the start of EU’s industrial policy on batteries when the European Commission outlined the concept of the European Battery Alliance with EU countries and industrial actors. A strategic action plan for batteries, covering the whole process from producer to end-user, was adopted in May 2018. Since autumn 2019, the Business Investment Platform of the European Battery Alliance gathers stakeholders along the entire battery value chain to accelerate transactions between investee and investor.
Many different projects at different parts of the chain, including fast charging points, are funded by the European Investment Bank, the European Commission’s Connecting Europe Facility and the European Regional Development Fund.
To align EU efforts on battery research and innovation, the European Technology and Innovation Platform Batteries Europe was launched in 2019. As a central hub for all battery-related research in Europe, Batteries Europe acts as the research and innovation coordination strand of the European Battery Alliance. It gathers battery experts from research and industry, as well as national and regional representatives, who together set short-term research priorities and a strategic research agenda.
Batteries Europe ensures constant communication and coordination between different battery-related research networks, projects and initiatives within the EU and is currently preparing detailed research and innovation roadmaps for different segments of the battery value chain.
A number of most urgent research and innovation needs are addressed by 2 multi-billion EURO Important Projects of Common European Interest (IPCEIs) and involve 12 EU countries and tens of companies and research organisations across the EU.
EU funding through Horizon 2020 and Horizon Europe
While most of research and innovation funding traditionally comes from corporate and national budgets, EU funding has often played an important catalyst role and created links between different actors across the EU.
Under the Horizon 2020 research framework programme, roughly 0.5 billion EURO were allocated to batteries research. Since 2018, all Horizon 2020 battery calls are concentrated in a single work programme. The programming of Horizon 2020 calls takes into account different needs of various transport sectors, different needs of the energy sector and different time horizons. Unlike battery IPCEIs, Horizon 2020 also tackles the longer-term perspective, notably through the Battery 2030+ initiative.
In addition to Horizon 2020 projects specifically focussed on batteries, there are a range of projects supporting innovative methods of battery integration in the energy and transport sector. For example, projects dedicated to smart energy systems involve batteries at generation, transmission, distribution and end-users’ level and are clustered under the BRIDGE initiative.
Although we are now in 2021, the benefits from Horizon 2020 will continue for a number of years, as many projects are still ongoing and numerous projects are yet to start. Moreover, Horizon Europe, the new 7-year EU research and innovation framework programme (2021-2027) starts this year. Under the Climate, Energy and Mobility work-programme, it will provide even greater support to the EU’s technological leadership in the field of batteries and battery applications.
In addition to open calls for proposals, EU contributes directly to battery-related research and innovation through its modern research laboratories in Petten (the Netherlands) and Ispra (Italy), both operated by the Commission’s Joint Research Centre.
A sustainable battery chain
It is not possible to reap the full benefits of electrification unless the batteries value chain becomes more sustainable. In December 2020, the European Commission proposed to modernise EU legislation on batteries, making the link with the circular economy. One important aim of these changes is to set new rules, ensuring that batteries are produced with the lowest possible environmental impact, using materials obtained in full respect of social and ecological standards. Batteries have to be long-lasting and safe, and at the end of their life should be repurposed, remanufactured or recycled, feeding valuable materials back into the economy.
As a next step, the Commission is now preparing measures for reaching an updated greenhouse gas emissions reduction target for 2030 of net 55 % compared to 1990 levels. These measures are detailed in the 2030 EU Climate target plan and will involve
- a more ambitious renewable energy target for 2030
- tighter CO2 norms for cars
- revision of legislation on alternative fuels infrastructure
- new rules on energy taxation
This will further push demand for storage, in particular batteries. The Commission has also launched numerous initiatives related to raw materials, skills and education.
Other solutions to energy storage
In addition to batteries, hydrogen is considered a key enabling technology for achieving carbon-neutrality by mid-century and has also become a focus of attention for the EU and European industry.
Hydrogen can power sectors that are not suitable for electrification, such as shipping or long-distance heavy good vehicles, and provide long-term storage to balance variable renewable energy flows. In an integrated energy system, hydrogen can support the decarbonisation of industry, transport, power generation and buildings across Europe. The EU Hydrogen Strategy, adopted in July 2020, offers perspective for how to transform this potential into reality, through investment, regulation, market creation and research and innovation.
Under the Horizon 2020 and Horizon Europe programmes, the EU is also providing support to other storage technologies, including pumped hydro storage and thermal storage.
When it comes to EU rules on renewable energy and electricity market design, they are technology-neutral and embrace all forms of storage (existing, emerging or not yet invented). This will hopefully encourage further research and deployment of other storage types, as super-capacitors, flywheels, liquid air energy storage, and compressed air energy storage.
The successful development of batteries and storage capacities in the EU brings together 2 important priorities for the EU: the European Green Deal (supporting the clean energy transition) and the digital transformation. The aim is to develop the best quality of storage design and the top quality user applications thanks to ongoing digitalisation.
Energy storage (DG Energy)
Hydrogen (DG Energy)
Energy storage (DG Research)
Industrial Alliances (DG Internal market, industry, entrepreneurship and SMEs)
15 March 2021