State aid: Commission approves €90 million Hungarian investment aid to SKBM’s electric vehicle battery plant

The European Commission has found Hungary’s €90 million investment aid to SKBM for a new battery cell plant in the Közép-Dunántúl (Central Transdanubia) region to be in line with EU State aid rules. The aid will contribute to the region’s development, whilst preserving competition. SKBM is a subsidiary of SK Innovation, owned by the South Korean energy and chemicals SK Group. The €90 million investment aid will support SKBM’s €630 million investment in a new production plant for lithium-ion battery cells. Battery cells store the energy and are thus the main components of lithium-ion batteries, which are used in consumer electronics, energy storage systems and electric vehicles. SKBM’s new plant will manufacture cells for electric vehicles batteries. The project, which started in March 2019 and is planned to be completed in 2022, is expected to create significant direct and indirect jobs. The production plant is located in Komárom, in the Közép-Dunántúl (Central Transdanubia) region – an area eligible for regional aid under Art. 107(3)(a) of the Treaty on the functioning of the European Union. It is located next to a battery plant established in 2017 by SKBH, another subsidiary of SK Innovation. The Commission assessed the aid measure under the Guidelines on Regional State Aid for 2014-2020, prolonged until 31 December 2021, which enable Member States to support economic development and employment in the EU’s less developed regions and to foster regional cohesion in the Single Market. The Commission found that: (i) the investment aid will contribute to job creation as well as to the economic development and to the competitiveness of a disadvantaged region; and (ii) the aid is limited to the minimum necessary to trigger the investment in Hungary and complies with all aid intensity requirements, also taking into account the aid already received for the existing SKBH plant, which Hungary granted under the General Block Exemption Regulation. The Commission concluded that the positive effects of the project on regional development clearly outweigh any distortion of competition brought about by the State aid. The non-confidential version of the decision will be made available under the case number SA.58633 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.