By Tim Hepher

PARIS (Reuters) -French aerospace group Safran said on Thursday it had picked France for a new carbon brakes factory, marking a major investment in its home nation following a closely watched competition with alternative sites in the U.S. and Canada.

The partially state-owned company, which builds jet engines and competes with RTX unit Collins Aerospace to sell other equipment like brakes and landing gear, said the 30,000 square meter (323,000 sq.ft) facility near Lyon would cost over 450 million euros ($514.4 million) once fully completed.

The announcement, alongside higher mid-year earnings, confirms a Reuters report on Wednesday that the Paris-based firm was poised to select France for its fourth such plant following a politically sensitive contest overshadowed by concerns over energy supplies.

The outcome of the long-delayed contest is being closely scrutinised in France, where President Emmanuel Macron has made re-industrialisation a key political priority, while U.S. President Donald Trump is pressing Europe to invest more in the United States.

Such investments have to be planned years ahead because of the size of the factories, but the long-delayed decision had become increasingly swept up in energy and trade politics.

Earlier plans to base the site in Lyon, France’s third-largest city, had been scrapped first due to the COVID-19 pandemic in 2020, and then a sharp rise in energy prices following Russia’s invasion of Ukraine in 2022.

In a statement, Safran CEO Olivier Andries acknowledged the support of state electricity utility EDF in the decision over where to locate the plant, which will rely on biomethane and low-carbon electricity.

Energy can account for a third of the cost of making carbon brakes, and industry sources said Safran had clashed in the past with EDF over the availability of affordable supplies, though tensions had eased following a recent change of EDF management.

Safran, which pioneered the use of carbon brakes for both jetliners and Formula 1 racing cars, said they were lighter and more durable than traditional steel, allowing airlines to reduce fuel consumption.

The new site at the Plaine de l’Ain industrial park will begin operations in 2030 and allow Safran to increase production by 25% between now and 2037 by joining a network of three existing sites in France, the US and Malaysia, the company said.

($1 = 0.8747 euros)

(Reporting by Tim Hepher;Editing by Sudip Kar-Gupta)