The European Union (EU) has approved Skr120m ($16.5m) in aid granted by the Swedish Government to Volvo Aero Corporation for the development of an engine component.

The grant will be used for the development of the intermediate compressor case (ICC) to equip the new Airbus A350 XWB aircraft.

Commission vice-president in charge of competition policy Joaquin Almunia said the new aero engine component would reduce the engine’s weight and improve fuel consumption of the aircraft, which will reduce the impact on the environment.

The engine will be developed by Rolls-Royce, according to Xinhua.