2024-09-09 15:21:25
Accounting for more than 20% of global greenhouse gas emissions, the transport sector plays a key role in the fight against global warming. The decarbonization of mobility is a major lever for government strategies, making the electrification of transport, and in particular the battery manufacturing sector, one of the most strategic sectors. The stakes are all the more critical given that, while the lithium-ion (Li-ion) battery sector has experienced explosive growth over the past decade, this has mainly benefited China, which dominates the entire value chain, from the extraction of raw materials to the production of said batteries.
This hegemony reflects a voluntary policy implemented by the Middle Kingdom for more than two decades, combining the internationalization of its companies (the “Go Global” policy) with the securing of raw materials – in particular critical minerals and metals – and incentives for foreign firms to set up on its soil to develop comparative advantages across the entire value chain. Given this observation, what options are available to Europe to free itself from Chinese dependence?
Insufficient European production capacities
Table of Contents
- 1 Insufficient European production capacities
- 2 The institutional component of the European action plan
- 3 (Very) ambitious European objectives
- 4 The path to sobriety
- 5 Here are PAA (People Also Ask) related questions for the title: **Europe’s Push for Self-Sufficient Lithium Battery Production: A Comprehensive Overview**:
- 6 Here are some “People Also Ask” (PAA) questions related to the title “Europe’s Push for Self-Sufficient Lithium Battery Production: A Comprehensive Overview”:
Table of Contents
- 1 Insufficient European production capacities
- 2 The institutional component of the European action plan
- 3 (Very) ambitious European objectives
- 4 The path to sobriety
- 5 Here are PAA (People Also Ask) related questions for the title: **Europe’s Push for Self-Sufficient Lithium Battery Production: A Comprehensive Overview**:
Europe’s importance in the Li-ion battery value chain has weakened significantly. By 2023, only 14% of these batteries are produced on European soilwith a significant concentration in a few countries such as Germany, Hungary, Poland and Sweden.
With a production capacity of 281,9 gigawattheures (GWh) in 2023, Europe is closely following North American capacities (295.3 GWh) but appears modest compared to China which had a production capacity of 1290.2 GWh (i.e. more than 4.5 times European capacities). However, like the production of minerals, the location of production units biases the real measurement of European capacities.
Although established on European soil, most of the production units are branches of non-European companies. More than half of European production is thus linked to South Korean or Chinese companies such as Samsung SSI, LGES or CATL. American companies (eg, Tesla, Microvast) are also present on European soil, bringing to more than 60% the share of production attributable to non-European companies.
The institutional component of the European action plan
Aware of its delay, the European Union (EU) has implemented multiple actions and regulations covering the entire value chain, the aim being to free itself from its dependencies – particularly on China – while regaining significant importance on the global level. It is in this logic that the list of critical materials– initially established in 2011 by the European Commission – has grown from 14 raw materials to 34 today.
Following on from this list, the EU adopted the CRMA (European regulation on critical raw materials, Critical Raw Materials Act), published in March 2023 and voted in April 2024, which aims to develop mineral and metal production on European soil to reduce dependence on foreign suppliers, avoid potential shortages and minimize the environmental and social impacts of the production of critical metals.
To this end, it sets out the following non-binding objectives for 2030:
“extraction in the EU must produce at least 10% of its annual consumption; processing in the EU must produce at least 40% of its annual consumption; recycling in the EU must produce at least 25% of its annual consumption; no more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing must come from a single third country.”
(Very) ambitious European objectives
In many ways, These goals are ambitious. Thus, despite the underexploited potential of the European subsoil, the objective of 10% production on European territory seems out of reach for three main reasons. First, Europe’s metal reserves are insufficient or even non-existent for 13 critical metals listed by the European Commission in 2023. Second, the process between initial exploration and the start of commercial production of a mine is long, ranging from 7 years for lithium to 17 years for copper, and requires considerable financial investments. Finally, mines have a negative image – particularly on an environmental level – and backward-looking, often giving rise to strong opposition locale.
The objectives relating to refining and transformation also raise questions. Indeed, these activities are very energy-intensive and pollutantsand require accepting their relocation to Europe in order to achieve the EU’s stated objective of producing at least 40% of its annual consumption through these processes. Highly competitive energy prices will also be essential to compete with the United States – in addition to China – which benefits from abundant unconventional gas reserves and relatively low electricity prices. Recycling, although less polluting locally and a priori more acceptable, however, requires heavy investments. It could reduce dependence on mining resources, but requires expensive infrastructure for collecting, sorting, pre-processing and transforming minerals, as well as constant technological adaptation – particularly to the chemistries of electric vehicle batteries.
The EU is also trying to diversify its partnerships to reduce dependence on third countries and the risks of ruptures. Although recent bilateral agreements have been signed with Kazakhstan, Egypt, Namibia, Australia and Canada, these will not be enough, making a European budget dedicated to investments in third countries and a diversification of supplies imposed on companies. The often-mentioned strategy of “friendshoring” (partnerships with allied countries) also presents difficulties. Western countries, with similar objectives of carbon neutrality and decarbonization of transport and energy, are in competition for low-carbon technologies and the materials needed to deploy them. This competition could reveal conflicts of interest and slow down the signing of agreements.
The EU is also seeking to move up the value chain, as illustrated by the creation of theEuropean Battery Alliance in 2017 aimed at building an ecosystem comprising all players in the automotive sector in order to produce batteries while reducing their environmental footprint. The minerals present in the batteries could be reused to meet Europe’s needs without having to own mines on its soil. If all the projects are successful, the EU would have a capacity of nearly 25% of global Li-ion battery production thanks to around fifty factories.
The path to sobriety
Beyond the CRMA, sobriety, which is largely absent from the “institutional package”, is making its way into European society. Highlighted as a central lever in the fight against global warming by the report of the Intergovernmental Panel on Climate Change In 2022, sobriety appears essential to reduce dependence on critical materials and, by extension, on China. The EU could set an example by promoting lighter electric vehiclesthereby reducing electricity consumption and environmental impacts related to production.
Achieving the CRMA targets will require significant efforts in terms of social acceptance, financing and diversification of supplies. While metal sobriety is an integral part of a sustainable and autonomous EU strategy for critical materials, it will need to be accompanied by significant support for citizens, who generally do not perceive the notion of “low carbon” as implying a reduction in their metal consumption.
This article was written in collaboration with Romain Capliez, a student at Paris Nanterre University.
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Europe’s Push for Self-Sufficient Lithium Battery Production: A Comprehensive Overview
The transport sector, accounting for over 20% of global greenhouse gas emissions, is a crucial player in the fight against global warming. The electrification of transport, particularly the battery manufacturing sector, has become a strategic priority for governments worldwide. However, the lithium-ion (Li-ion) battery sector’s explosive growth over the past decade has mainly benefited China, which dominates the entire value chain from raw material extraction to battery production. This hegemony is a result of China’s deliberate policy implemented over two decades, combining internationalization of its companies with securing raw materials and incentivizing foreign firms to set up operations on its soil.
Insufficient European Production Capacities
Europe’s importance in the Li-ion battery value chain has significantly weakened. By 2023, only 14% of these batteries are produced on European soil, with a concentration in countries like Germany, Hungary, Poland, and Sweden [[3]]. Europe’s production capacity stands at 281.9 GWh in 2023, closely following North American capacities (295.3 GWh) but lagging behind China’s production capacity of 1290.2 GWh (more than 4.5 times European capacities) [[3]].
However, the location of production units biases the real measurement of European capacities. Most production units on European soil are branches of non-European companies, with over 60% of European production linked to South Korean or Chinese companies like Samsung SSI, LGES, or CATL, and American companies like Tesla and Microvast.
The Institutional Component of the European Action Plan
Aware of its delay, the European Union (EU) has implemented multiple actions and regulations covering the entire value chain, aiming to free itself from dependencies, particularly on China, while regaining significance on the global level. The EU’s list of critical materials, initially established in 2011, has grown from 14 raw materials to 34 today [[3]]. The EU adopted the Critical Raw Materials Act (CRMA) in April 2024, which aims to develop mineral and metal production on European soil, reduce dependence on foreign suppliers, avoid potential shortages, and minimize the environmental and social impacts of critical metal production.
Ramping Up European Battery Production
Europe is expected to host manufacturing facilities capable of producing more than 300 GWh of battery capacity by 2029 [[2]]. According to recent research, European battery production is forecast to reach 238 GWh in 2025, 413 GWh in 2027, and 773 GWh in 2030, up from 69 GWh in 2022 [[1]]. These projections indicate a significant increase in European battery production capacities, which will help reduce the region’s dependence on Chinese imports and strengthen the local industry.
Conclusion
Europe’s push for self-sufficient lithium battery production is gaining momentum. The EU’s institutional efforts, combined with investments in local production capacities, are expected to significantly increase European battery production in the coming years. By 2030, Europe aims to produce at least 10% of its annual consumption, process at least 40% of its annual consumption, and recycle at least 25% of its annual consumption. As the electrification of transport continues to accelerate, Europe’s efforts to become self-sufficient in lithium battery production will play a crucial role in reducing greenhouse gas emissions and meeting global warming mitigation targets.
Europe’s Push for Self-Sufficient Lithium Battery Production: A Comprehensive Overview
The transport sector, accounting for over 20% of global greenhouse gas emissions, plays a
