Battery Groups Urge Broader European Supply Criteria in Industrial Accelerator Act

Europe’s battery ambitions depend on more than cell factories. A joint letter from Transport & Environment (T&E), European Metals and RECHARGE argues that the Industrial Accelerator Act (IAA) should recognize the materials and intermediate components needed along the full battery supply chain. Its central proposal: add minimum content thresholds for refined battery-grade critical raw materials, precursor cathode active materials (pCAM), anode active materials (AAMs) and recycled materials.

The request comes as negotiations on the IAA continue. The signatories describe the legislation as a first step toward strengthening European industry, while arguing that its incentives will have limited reach if they focus too narrowly on finished products. Battery cells rely on several upstream stages, and investment in one part of that chain does not guarantee that the materials and components it needs will be available from European or trusted sources.

Why the middle of the battery chain matters

Battery supply chains run from raw materials through refining and processing to active materials and cells. pCAM is an intermediate used to make cathode active material, while AAMs are materials used on the anode side of a battery. These inputs sit between mined or recycled resources and the components that go into finished cells.

That middle stage can be easy to overlook when industrial targets focus on visible end products such as batteries and electric vehicles. But a local cell plant still depends on reliable access to processed materials that meet battery requirements. If those inputs are concentrated in a small number of markets, building capacity in Europe may not remove the supply exposure that the factories were intended to address.

The letter points to increasing global concentration in critical components and says European projects in the pipeline remain at risk of cancellation. It does not identify individual projects or quantify the scale of the risk. Its broader warning is that announced capacity alone cannot secure a supply chain: projects need customers and a credible route to market before investment can proceed with confidence.

Demand certainty is the proposed lever

The groups want the IAA’s Union content incentives in Annex III to include additional criteria covering refined battery-grade raw materials, pCAM, AAMs and recycled inputs. In practical terms, those thresholds would make the origin and composition of a battery’s supply chain count when incentives apply.

The letter frames the IAA as a demand-side tool. That matters because suppliers deciding whether to build or expand processing capacity need more than an expectation that European battery production will grow. They need a clearer signal that buyers and supported projects will have a reason to source qualifying materials. A defined threshold can help turn broad industrial goals into demand that suppliers can assess when planning investment.

Recycled materials are part of the proposal alongside primary refined materials. Including both would make the criteria apply across more than one route to battery inputs. The source does not specify proposed percentages, implementation details or how recycled content would be measured, so the letter’s request is about adding categories and minimum thresholds rather than setting out a complete system.

What the proposal could mean for projects

If the IAA links incentives to a wider set of battery inputs, it could support investment across more stages of the chain, rather than concentrating the demand signal at the cell or vehicle end. That is the strategic case made by the signatories: predictable demand, combined with procurement and support schemes, could help make European projects more investable and supply routes more diversified.

There is a practical question for manufacturers, too. A broader set of sourcing criteria could give battery makers clearer incentives to build relationships with suppliers of refined materials and active components. For vehicle buyers, the proposal is several steps upstream: it does not change a model’s range, charging speed, price or availability directly. Its potential effect is on the industrial base that supplies batteries over time.

How much difference the proposal makes will depend on the final criteria and how they are applied. Thresholds need to be clear enough for suppliers and manufacturers to plan around, while covering the inputs the groups say are essential. The letter offers no figures for those thresholds, and the available account does not describe the response from other parties involved in the negotiations.

The groups’ argument is that Europe’s battery strategy will be more resilient if incentives reach the materials and components between resource extraction and cell production. The next point to watch is whether the IAA’s Annex III criteria extend to those upstream stages and include recycled inputs. Read the joint letter.