Following an earlier announcement, Canadian federal and provincial government officials have “welcomed” Asahi Kasei Corporation’s investment of approximately C$1.6bn to build an EV battery separator plant in Port Colborne, Ontario.

As medium- to long-term growth is forecast for the North American EV market, the company expects to make additional multi billion dollar investments through multiple phases. Details regarding direct jobs created by this investment were currently being finalised and would be announced later.

The project was expected to benefit from federal support through the Clean Technology Manufacturing investment tax credit. Ontario expected to support this project with both direct and indirect incentives.

“Asahi Kasei’s investment is another vote of confidence in our auto industry and auto workers,” said Canadian prime minister Justin Trudeau.

“[The] investment will bring economic growth and good-paying jobs to workers in Port Colborne and across the Niagara Region and also yet another show of confidence in our government’s ongoing work to build a domestic EV supply chain in Ontario that benefits workers across the province,” added Ontarior premier Doug Ford.

Asahi Kasei’s new plant will produce Hipore battery separators, an essential component of the lithium ion batteries used in EVs which makes batteries more sustainable and durable.

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Factory construction would be complete by the end of 2024 and the plant commercially operational in 2027.

The separator is a microporous polyolefin sheet that prevents the anode and cathode from contacting one another and causing a short circuit, while enabling lithium ions to pass back and forth during battery charging and discharging.

The proposed Clean Technology Manufacturing investment tax credit, which would be available retroactively as of 1 January, 2024, would be equal to 30% of investments in machinery and equipment, for eligible activities related to the manufacturing or processing of clean technologies, or the extraction and processing of key critical minerals.

The 2024 federal budget announced a new 10% EV Supply Chain investment tax credit to attract private investment and create jobs across the EV supply chain.

This complements the 30% Clean Technology Manufacturing investment tax credit.