LG Chem’s Polish battery plant expansion faces EU probe

EU state aid regulators have opened an investigation into Poland’s plan to grant 95 million euros ($112 million) in aid to LG Chem to expand its electric vehicles battery plant in the country, Automotive News reports.

EU officials have doubts whether the support complies with the bloc’s rules.

LG Chem in 2017 said it would invest more than 1 billion euros to ramp up production capacity at its Polish plant. Poland subsequently sought European Commission approval to grant 95 million euros to the company.

The EU competition enforcer cited several concerns about the Polish support, in particular whether it provides an incentive for the plant expansion and the possibility that it may exceed the level of aid allowed.

The investment will enable LG Chem to ramp up its battery capacity output to about 65 gigawatt hours, making the Polish facility one of the world’s largest lithium-ion cell factories, according to the European Investment Bank, which is supporting the project.

More than 1 800 jobs will be created at the site in Wroclaw, taking the total workforce up to more than 6 000 full-time employees by end-2022.

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