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Brussels is planning to force Chinese companies to transfer intellectual property to European businesses in exchange for EU subsidies as part of a tough trade regime for clean technology.
New standards requiring Chinese businesses to set up factories in Europe and share technical know-how will be introduced when Brussels awards €1bn in grants to develop batteries in December, according to two senior EU officials. will call for bids for He said that the pilot can be included in other subsidy schemes of the European Union.
The requirements, while much smaller, echo China’s own government, which pressures foreign companies to share their intellectual property in exchange for access to the Chinese market. Officials said the criteria could be changed before the tender.
The plans are part of Europe’s tough stance towards China as it seeks to protect companies in the bloc – subject to tougher environmental regulations – from being undercut by cheaper and more polluting imports.
Last month, the European Commission confirmed tariffs of up to 35 percent on Chinese electric vehicles, on top of the current 10 percent levy. It has also introduced stricter requirements for companies applying for hydrogen subsidies, stipulating that only 25 percent of the electrolyzers used to make hydrogen can be sourced from China.
People close to US President-elect Donald Trump have said he will pressure the European Union to follow his lead and put up more barriers to Chinese goods and investment.
If Trump goes ahead with his threat of 60 percent tariffs on Chinese exports, Beijing will likely try to divert them to other regions such as the European Union — which in turn will take measures to stem the flood.
“If we want to play along with Trump on any of his agendas, we have to decide what to do about China,” a senior EU diplomat said.
But the move also comes amid deep concern about the weakness of the EU economy and the ability of companies to meet climate targets without relying on cheap imports.
Brussels has also introduced domestic production targets into legislation aimed at boosting clean technologies adopted in May.
Elisabetta Carnago, senior research fellow at the Center for European Reform think tank, said the commission was “trying to explore a range of ideas” to strengthen its trade defenses “against a possible flood or redirection of Chinese trade flows to Europe”. has been.”
Increased scrutiny of Chinese technology imports has already encouraged companies such as China’s CATL, the world’s largest manufacturer, to set up so-called gigafactories in Europe. It has invested billions of euros in plants in Hungary and Germany.
Shanghai-based Envision Energy is also investing hundreds of millions of euros in facilities in Spain and France.
But in a closed-door meeting earlier this year, China’s Ministry of Commerce warned domestic automakers against investing heavily in Europe, citing political uncertainty in Brussels, saying they would only be allowed to enter the final assembly. Advised to set up production lines in the continent for the phase. A person familiar with the matter.
Meanwhile, the EU’s own battery champion North Volt, based in Sweden, is teetering on the brink of bankruptcy as it struggles to ramp up production.
Batteries form an important part of electric vehicles, accounting for more than a third of the cost, making battery supply chains critical for the European car manufacturing industry as it seeks to transition to less polluting models. .
Cornago warned that a tough stance against Chinese ingredients could affect the EU’s decarbonisation efforts.
“You’re temporarily providing a trade protection that looks like innovation support … to support your industry but it’s not lowering prices for consumers,” he said. said the move could “add a level of confusion over what the EU’s automotive sector should do to grow and compete with China.”
The commission declined to comment.
Additional reporting by Gloria Lee in Hong Kong
