A new permanent magnet production line will be built in Estonia after the European Commission agreed to fund a project from Canadian-registered Neo Performance Materials. The company owns the Silmet plant in Sillamäe and a permanent magnet factory in Narva, both in Ida-Viru County in eastern Estonia.
On Monday, the Commission selected 77 European net-zero technology projects to receive a total of €3.4 billion from the Innovation Fund call launched in December 2025. Neo Performance Materials is among the recipients.
The Silmet plant, owned by Neo Materials, depends on raw materials from Russia but has pledged to phase them out. The plant has come under scrutiny after Estonia asked for its supplier to be exempted from European sanctions.
The project description states: "The project will establish a rare-earth permanent magnet production line in Estonia, covering separation, metallization and magnet manufacturing. The line will be capable of producing up to 3,000 tons of permanent magnets annually, one-third of which will be supplied to EU offshore wind farms."
Plans say the project will prevent the emission of more than 3.4 million tons of CO2 equivalent during its first 10 years of operation. The money will come from the Innovation Fund, which uses revenue from the EU Emissions Trading System. Final grant terms are due to be made public in the first quarter of 2027.
The fund aims to channel an estimated €40 billion in ETS revenue between 2020 and 2030 into cutting-edge low-carbon and net-zero technologies. A methanol plant planned for Pärnu has previously received funding from the same programme in Estonia.
Source: Err
Estonia permanent magnets · Neo Performance Materials · Silmet Sillamäe · Narva magnet factory · EU Innovation Fund · rare-earth production