EU opens probe into Poland’s state aid to expand LG Chem’s car battery plant

EPA-EFE/STEPHANIE LECOCQ / POOL The European Commission launched on the day an antitrust competition inquiry into the sector of Internet of Things (IoT) for consumer-related products and services in the EU. style=”font-size:40px; line-height: 1.3em; font-weight: 800; padding:7px;”>EU opens probe into Poland’s state aid to expand LG Chem’s car battery plant

By New Europe Online/KG

epa08549416 EU Commissioner for Competition Margrethe Vestager gives a press conference on a sector inquiry on Competition at the European Commission in Brussels, Belgium 16 July 2020.
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The Commission said it will now investigate further to determine whether the initial concerns are confirmed. Poland’s €95 million state aid to chemical company LG Chem Group for investing in the expansion of its battery cell production facility for electric vehicles (EV) in Biskupice Podgórne in Poland’s Dolnośląskie region has prompted the European Commission to open an in-depth investigation to assess whether it complies with EU rules. It does not prejudge in any way the outcome of the investigation. We will carefully investigate whether Poland’s support was necessary to trigger LG Chem’s decision to expand its existing cell production facility in Poland, is kept to the minimum necessary and does not distort competition or harm cohesion in the EU,” she added. The opening of an in-depth investigation provides Poland and interested third parties with an opportunity to comment on the measure. “At the same time, we need to ensure that the aid is really needed to attract private investments to the region concerned, and avoid that the recipient of the aid gains an unfair advantage over its competitors at the expense of taxpayers. At this stage, the Commission has doubts that the planned public support complies with all relevant criteria of the Regional Aid Guidelines. In 2017, LG Chem decided to invest more than €1 billion in the expansion of its production capacity of lithium-ion cells and battery modules and packs for electric vehicles in its existing plant in the Dolnośląskie region of Poland. In particular it has doubts about whether the measure has an “incentive effect”; it has doubts about the public support’s contribution to regional development and its appropriateness and proportionality; and it cannot exclude at this stage that the public support exceeds the maximum permissible aid intensity for the project, the Commission said in a press release. “EU State aid rules enable Member States to foster economic growth in disadvantaged regions in Europe,” Competition Policy Commissioner  said. In 2019, Poland notified the Commission of its plans to grant €95 million of public support for the expansion.

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