VIENNA, May 25 (Xinhua) -- Europe should avoid introducing battery-sector restrictions too quickly as the move could increase costs and slow energy storage deployment, a United Nations Industrial Development Organization (UNIDO) official has said.
Ahead of the May 28 policy debate by the European Union (EU) Competitiveness Council on the Industrial Accelerator Act, Rana Ghoneim, director of the Division of Energy and Climate Action under UNIDO's Directorate of Technical Cooperation and Sustainable Industrial Development, warned that restrictions or origin requirements could lead to "unintended effects."
"Europe's storage build-out is now large and increasingly battery-led. If restrictions or origin requirements are introduced too quickly, before alternative supply chains are sufficiently developed, there could be unintended effects," Ghoneim told Xinhua in a recent written interview.
These could include higher costs, tighter supply conditions and slower deployment of storage projects in the short term, she added.
With conflicts in the Middle East pushing up energy prices, energy storage has become increasingly critical. China currently holds a strategic position in lithium processing and battery exports, while Chinese producers face restrictions under the Industrial Accelerator Act.
The Industrial Accelerator Act is framed as a tool to revive European manufacturing, but several of its provisions -- including local-content requirements and restrictions affecting investment from globally competitive producers -- risk excluding Chinese companies in sectors such as batteries, electric vehicles and photovoltaics.
While Europe has an interest in reducing dependence and building a more resilient industrial base, Ghoneim said Chinese investment in Europe can bring benefits if aligned with European industrial objectives.
"The European Union is the largest single destination for overseas investments by Chinese battery producers. These investments can support technology transfer, help scale up production in Europe and bring down costs," Ghoneim said.
Therefore, a useful framing can be to combine resilience with openness in a way that strengthens Europe's own industrial base without slowing deployment, she added.
