EU funds Neo’s Estonian permanent magnet production line

The European Commission has selected Neo Performance Materials for funding to build a permanent magnet production line in Estonia, ERR reported. The grant amount has not yet been disclosed.

The Canadian-registered company owns the Silmet plant in Sillamäe and a permanent magnet factory in Narva. The project will cover the separation and metallisation of rare earths, as well as magnet production, with capacity of up to 3,000 tonnes a year. One-third of the output is intended for offshore wind farms in the European Union.

The project is expected to prevent the release of more than 3.4 million tonnes of carbon dioxide equivalent during its first 10 years of operation.

The Commission on Monday selected 77 net-zero technology projects to receive a total of 3.4 billion euros from a call launched in December 2025. The funding comes from the Innovation Fund, which uses revenue from the EU emissions trading system.

A further 84 projects passed evaluation but did not receive funding because of budget limits. They, along with the 77 selected projects, will receive the STEP quality label, which can help them seek funding from other public and private sources. Another 160 applications were unsuccessful but qualify for project development assistance.

Project developers selected for funding have been invited to prepare grant agreements with the European Climate, Infrastructure and Environment Executive Agency. The agreements will set out budgets, schedules, technical and financial targets, and legal obligations. Final terms are due to be published in the first quarter of 2027.

Silmet has said it will stop relying on Russian raw materials. The plant drew attention after Estonia asked for its supplier to be exempted from European Union sanctions.