Germany: Europe should extend industrial cooperation to hydrogen

BERLIN (Reuters) - European Union member states are intensifying cooperation on the production of battery cells for electric cars and they should extend this approach into new industrial areas such as hydrogen technology, the German economy minister said on Tuesday.

"We want to support the creation of a complete value chain for battery cells in Europe: from the processing of raw materials to battery cell production to recycling," Peter Altmaier told an economic conference in Berlin.

The German government is supporting the local production of battery cells with 3 billion euros ($3.6 billion) to become less dependent on suppliers from Asia.

German carmakers already face tough competition from Chinese and U.S. rivals in electric mobility. The European Union has greenlighted state support for battery cells as part of its Important Project of Common European Interest (IPCEI) scheme.

Among the companies benefiting from the support are German battery maker Varta, luxury car maker BMW, chemical group BASF as well as French automaker Peugeot with its German Opel subsidiary.

The economy ministry expects the battery cell initiative to create more than 20,000 new jobs over the next 10 years. This is likely to cushion the impact of job losses caused by weaker demand for combustion engines.

Altmaier said that, in future, the most innovative and environmentally friendly battery cells should come from Europe.

The increased cooperation on battery cells, enabled by the European Commission's IPCEI scheme, should become a blueprint for other European industrial projects, for example for hydrogen technologies, Altmaier added.

The German government has passed a 9-billion-euro hydrogen investment plan as part of a stimulus package to help Europe's largest economy recover from the coronavirus shock and accelerate a shift towards green technology.

Hydrogen fuel is produced via electrolysis in a process that passes electricity from sources such as wind and sunshine through water, to extract carbon-free hydrogen.

(Reporting by Michael Nienaber, Editing by Douglas Busvine and Giles Elgood)

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