August 9, 2026

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August 9, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
New EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before AntalyaNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before Antalya

Foreign Subsidies Probe Lands on Chinese EV Battery Joint Venture

Ingvar Lemarquis
Policy Monitor, Competition and Antitrust

Brussels: The Commission has opened its first in-depth investigation under the Foreign Subsidies Regulation into a joint venture between a Chinese battery cell manufacturer and a Belgian automotive supplier, marking the second consecutive year in which the regulation has been applied to electric vehicle value chains. The investigation, opened under the merger notification arm of the instrument, will probe whether undisclosed financial support distorted the partners’ negotiating position.

Regulation (EU) 2022/2560 entered into force in 2023 with a notification regime that applies to concentrations and public procurement bids of significant size. In addition to mandatory notifications, the Commission retains the power to open ex officio investigations into any market behaviour that may have been distorted by foreign financial contributions exceeding fifty million euros over the three preceding years. The instrument was designed to close a gap in the Union’s state aid framework, which had until then applied only to support granted by Member States.

The Antwerp case concerns a planned cathode active material plant designed to supply European original equipment manufacturers from 2028. The Chinese partner has received various forms of public support in its domestic market, including land at preferential conditions, research and development grants and tax holidays. Whether these contributions distort the joint venture’s position in the European single market is the question the Commission’s case team will examine over the next twenty-five business days, with a possible extension if commitments are explored.

The investigation has implications beyond the specific transaction. The Commission has signalled in three successive State of the Single Market reports that the regulation is intended to function alongside, not replace, the Union’s traditional trade defence instruments. Where anti-subsidy duties under Regulation (EU) 2016/1037 capture imports, the Foreign Subsidies Regulation captures the structural effect of subsidised foreign capital establishing itself in the European market.

The administrative pressure on the Directorate-General for Competition has been considerable. The notification regime alone has generated more than fifteen hundred filings in the first two years of application, the bulk of which have been cleared without in-depth investigation. The threshold for a phase II investigation is high, and only a small fraction of notifications have triggered substantive review. The Antwerp case is the seventh phase II investigation overall.

A persistent concern in the industry response has been the asymmetry of the burden of proof. Notifying parties must declare all foreign financial contributions received in the relevant period, an exercise that has proved demanding for global groups with extensive subsidiary networks. Several practitioners have called for a refinement of the materiality threshold, arguing that the current framework captures support that has no realistic distortive effect on the European market.

Two parallel developments are worth following. The first is the Commission’s growing use of commitments to resolve cases. Behavioural and structural remedies have been negotiated in earlier phase II investigations, and the toolbox is expected to expand. The second is the interaction with the new Critical Raw Materials Act, which encourages strategic investment in upstream battery value chains. The tension between encouraging investment and screening it for distortive effects will require careful balancing.

For the Antwerp project, the outcome of the investigation will be the first major test of how the regulation operates in a sector where European industrial policy and supply chain resilience pull in different directions.

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