EU’s road to independence coul have high costs

Among the various topics discussed at EVision, one of the most critical ones emerged: resources, and the elusive rare earths. There’s ongoing discussion regarding Europe’s dependence on China and other countries for the supply of materials like cobalt or nickel, necessary for batteries and electric motors, as well as the reliance of automobile manufacturers on non-European gigafactories.

Regarding batteries, Europe simply woke up late but, according to the European Commission, the resources are there. They just need to be exploited.

Where are the resources in Europe

Europe’s desire to emancipate itself from Chinese influence is generally evident in its efforts to bring mineral sourcing back home, efforts that are primarily legislative. Several “mining projects” are taking shape across Europe for the first time in decades. “Green mining” has become a mantra in Brussels, with new laws in the pipeline and increasing political fervor.

Just recently, the publication of the Battery Regulation has been released, a comprehensive regulation setting the path for “homemade” battery production, but also defining goals for zero or minimal impact both in extraction and end-of-life battery management.

But it’s not always easy, as European regions rich in rare earths have also given rise to resistance. For example, the discovery of a large rare earth deposit in Kiruna, Swedish Lapland, was celebrated as a breakthrough for the green transition.

However, the environmental and social costs of mining extraction are not to be underestimated, particularly due to resistance from the Sámi population, which has historically faced discrimination and marginalization in Sweden, Norway, Finland, and Russia. They see the new interest from the Swedish government and producers in the North as a threat to nature, an integral part of their culture.

Other significant deposits have been found in Portugal, Finland, Germany, and France, as well as in some Eastern European countries like the Czech Republic, and even in the North Sea, where Norway has approved underwater explorations in an area larger than the entire United Kingdom, also sparking internal and external controversies and entering into diplomatic conflict with the EU.

EU aims

The situation was well exemplified by Julia Poliscanova, Senior Director, Vehicles & Emobility Supply Chains at Transport & Environment:

When we look at batteries in Europe, we are totally unprepared in terms of costs and technology, which is why many electric vehicles are built in China. I believe we should create a policy to incentivize European localization of electric vehicle and battery production because the possibilities are there: last year, 50% of all lithium used in batteries for European cars was extracted and produced here. So Europe can be self-sufficient in battery production by 2026, but it requires more specific policies in that direction and targeted investments.

Julia Poliscanova, Senior Director, Vehicles & Emobility Supply Chains at Transport & Environment @EVision 2024

The adoption of the Critical Raw Materials Law, proposed by the European Commission, aims to reverse this dependence. The law aims to ensure that by 2030 at least 10% of annual extraction consumption, 40% of annual processing consumption, and 15% of annual recycling consumption come from Europe. However, pressures from the mining industry have influenced the legislative process, raising concerns about “corporate capture” of EU policies.

Mark Nicklas, Head of Unit Mobility at the European Commission, stated that

The EU is currently the second-largest market for electric vehicles, after China. There are investments, we are in a dominant position. There are other countries like Japan looking at what’s happening in Europe. Certainly, the largest electric car manufacturers are BYD and Tesla, but right behind them is Volkswagen, in third place. Therefore, there are opportunities for the European industry to become even more competitive because we are capable of making the necessary investments.

Mark Nicklas, Head of Unit Mobility at the European Commission @EVision 2024

Furthermore, Europe is seeking alliances with countries like Canada, Ukraine, and Kazakhstan to diversify its sources of supply. But there remains a fear that Europe is simply shifting its dependence on minerals.

Nicklas also confirms this: “At the moment, however, everything that is found must be sent to China for processing,” effectively nullifying Europe’s production capacity and even increasing times and costs.

The goal is to start with at least 40% of the extracted products being processed in Europe,” concludes Nicklas.

Leave a Comment

Your email address will not be published. Required fields are marked *