Europe steps up its battery push amid the energy race

The European Union has intensified its strategy to build a domestic battery industry, recognising that this component is now a strategic pillar in the energy transition. In a context of increasing global competition and urgent climate challenges, Brussels has stepped up its support for technological innovation and industrial battery production, aiming to reduce its reliance on third countries and to ensure the stability of the European energy system.

The battery sector is a key driver of innovation and sustainability. By reducing dependence on critical raw materials through local and circular supply chains, and by expanding processing capacity, Europe is moving towards more autonomous and resilient production. This transformation is fostering an integrated ecosystem spanning from design and manufacturing to end-of-life management. Moreover, the deployment of energy storage solutions strengthens the integration of renewable energy sources and ensures a more stable supply.

The Net-Zero Industry Act identifies batteries as one of the 19 strategic technologies for the EU. As such, battery projects granted strategic status benefit from fast-tracked procedures and administrative priority. Additionally, the Critical Raw Materials Act introduces measures to reinforce raw material supply chains within the EU, enhancing the competitiveness of the European battery sector.

The EU has also supported the sector through funding for R&D and innovation projects. One such example is Horizon Europe. Between 2021 and 2024, this programme allocated €518 million through 34 calls for proposals, financing 79 battery-related projects covering the entire value chain—from raw materials and advanced materials to cells, modules, integration into applications, and end-of-life management.

In December last year, the European Commission launched a €1 billion call for projects focused on battery cell manufacturing for electric vehicles. In addition, together with the European Investment Bank (EIB), it announced a €200 million extension in loan guarantees under the InvestEU programme. As part of this partnership, the EIB plans to invest €1.8 billion in the battery value chain.

Despite the momentum the battery sector is gaining in Europe, there remains a certain dependency on third countries for raw materials, as well as challenges such as regulatory fragmentation, high energy and labour costs, a shortage of skilled battery manufacturing workers, and considerable business uncertainty. These factors hinder the market entry of new technologies.

Overcoming these challenges is key to seizing the opportunities offered by the sector. “Europe has made great strides in recent years, but it still lacks control over key links in the value chain,” says Carolina Simón, a European project consultant at Zabala Innovation and energy expert.

Batteries without borders

Against this backdrop, Horizon Europe’s Cluster 5 has launched several calls for proposals in 2025 focusing on the development of advanced energy storage technologies. Under the Batt4EU partnership, funding will be provided for projects addressing everything from the sustainable processing of raw materials to the design of long-life batteries for stationary storage.

Projects should focus on developing next-generation low-cost batteries to boost the competitiveness of the European value chain and reduce the use of critical raw materials. Initiatives aimed at improving the adaptability and flexibility of production processes in battery manufacturing will also be supported. In addition, projects demonstrating cost-effective, safe, and sustainable production of battery metals, precursors and active electrode materials will be eligible.

Efforts will also focus on optimising critical processes within existing production lines and adapting cell design to maximise the benefits of improved processes. Initiatives based on solutions for assessing battery ageing, reliability and safety will likewise be promoted.

The deadline for submitting proposals to three of these calls is 2 September, while three others will close on 20 January. “All of them allow us to address challenges from a systemic perspective, integrating technological innovation, sustainability, and industrial competitiveness,” explains Simón.

Separately, the HORIZON-CL5-2025-04-D5-11 call, under the Zero Emission Waterborne Transport partnership, aims to advance towards zero-emission maritime transport through the integration of innovative and safe energy storage systems on vessels. In this case, the submission deadline is 4 September.

In addition, the Circular Economy and Quality of Life sub-programme of the LIFE 2025 programme aims to drive innovation, ensure the effective implementation of EU environmental legislation, and support the large-scale uptake of successful technical and policy solutions for putting relevant Union environmental laws and policies into practice.

Within this framework, projects may be submitted that address improvements in the separate collection and recycling of batteries, provided they contribute to the sub-programme’s overall objectives. The deadline for submitting proposals under this call is 23 September.

The industrial dimension also lies at the heart of Europe’s strategy. The Battery call of the Innovation Fund, launched in December 2024 with a budget of €1 billion, sought to strengthen the manufacturing capacity for battery cells for electric vehicles in Europe. Although this call closed in April 2025, a new edition is expected in December.

Projects selected under this call must demonstrate a high degree of innovation, economic viability, and a significant reduction in greenhouse gas emissions. “These kinds of instruments are crucial to reinforcing the European battery industry and advancing the energy transition,” stresses Simón.

A strategic challenge

The new European battery regulation, adopted in June 2023, sets a collection target of 73% for portable batteries by 2030, and all recycling processes must achieve minimum recovery targets of 80% for lithium by 2031. It also imposes design requirements to facilitate disassembly and reuse, as well as a digital passport for industrial and electric vehicle batteries.

Despite this progress, the European battery sector still lags competitors such as China, which dominates the battery supply chain. “Europe needs to speed up the implementation of its policies if it wants to avoid a new technological dependency,” warns Simón. This expert highlights the importance of combining public funding, industrial cooperation and smart regulation to consolidate a robust value chain.

In this scenario, R&D and innovation become decisive. “Innovation is not just a technological issue—it’s also about business models, system integration and social acceptance,” concludes Simón.