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EU to probe Poland's plan for supporting LG Chem's battery plant expansion

Xinhua News,BRUSSELS
2020-08-12 05:51

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BRUSSELS, Aug. 11 (Xinhua) -- The European Commission said on Tuesday it has opened an in-depth investigation into whether Poland's plan to grant 95 million euros (111 million U.S. dollars) of public support for chemical company LG Chem Group's expansion of its battery cell production facility breaches EU regulations.

In a statement, the Commission said it is investigating whether the aid given to the company in Biskupice Podgorne in southwestern Polish region of Dolnoslaskie, is in line with EU rules on regional state aid.

The matter dates back to 2017 when LG Chem decided to invest more than 1 billion euros in the expansion of its production capacity of lithium-ion cells and battery modules and packs for electric vehicles in its existing plant. In 2019, Poland notified the Commission of its plans to grant 95 million euros of public support for the expansion.

The Commission said that at this stage, it had doubts whether the decision by LG Chem to expand its battery production capacity was directly triggered by the Polish public support or whether the investment would have been carried out absent of the public support.

Commissioner Margrethe Vestager, in charge of competition policy, said it is necessary 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.

The investigation is also looking into whether the amount exceeded the permissible amount, according to the statement.
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