Investments in the EU battery sector reached €60 billion last year, while China invested only €17 billion, EU commissioner Maroš Šefčovič told EURACTIV in a recent interview. This year, Europe has so far invested €25 billion – again twice as much as China, he noted. Since the launch of the “European battery alliance” in 2017, the EU has made a leap forward in its quest to develop a full battery manufacturing value chain.
“In terms of investment levels in Europe, we probably have caught up,” says Andrew McDowell, the European Investment Bank’s vice-president responsible for economics and energy. According to him, there has been “a transformation in the level of ambition” in Europe since the battery alliance was launched in 2017.
“It’s not just about catching up anymore, it’s about Europe taking a leadership position in this industry,” McDowell told reporters during an online briefing in late August.
But the catch up is not over yet. Europe’s Achilles Heel is at the start of the value chain, where raw materials are mined and processed, according to Peter Carlsson, the CEO of Swedish battery maker Northvolt.
“We’re building plants but they need to be supported by raw materials, components and suppliers of equipment,” Carlsson told journalists at the August online briefing.
Northvolt is currently constructing Europe’s first battery gigafactory in northern Sweden, and a second site is planned in Germany following a deal signed with carmaker Volkswagen in July.
“Today, as we’re starting up the factory, we will still be dependent on a lot of suppliers from outside Europe,” Carlsson said, citing raw materials and components as part of a wider battery “ecosystem” that he says should be promoted in Europe.
“This is where we really need to continue strengthening the European ecosystem,” Carlsson said. “It’s going to require focus and investments.”
Developing home production
Raw materials like lithium and cobalt, which are currently imported into Europe, have come under close scrutiny as part of the EU’s push to secure raw materials for battery manufacturing. Demand for lithium is expected to increase 16-fold by the end of the decade and be 60 times larger by 2050, according to European Commission forecasts. Cobalt, another key ingredient for batteries, will also see a spike in demand, growing 500% by 2030 and 15 times by 2050. To address this weakness, the Commission launched an action plan on critical raw materials as well as an industry alliance last September, with the aim of strengthening the EU’s “strategic autonomy” on key raw materials. And the focus is not only on car batteries – sectors such as aerospace, construction, and low-carbon industries are also concerned because they are considered key for the green and digital transitions.
“Today we are acutely aware that this dependency is something we have to take extremely seriously, which is why we created this European Raw Materials Alliance,” Šefčovič said.
The good news is that Europe can quickly become independent on some of them. “For lithium needed for batteries and storage, we’re confident that we can be 80% self-sufficient by 2025,” Šefčovič said, citing mining projects currently under development across Europe and neighbouring countries. In April this year, a lithium mining project in the Czech Republic secured €29.1 million in funding and is expected to become the first EU producer of battery-grade lithium compounds. In July, global mining giant Rio Tinto announced a decision to invest nearly $200 million in a lithium-borate project in Serbia. For rare earths, which are used in magnets founds in wind turbines and electric motors, it will be a longer shot. The EU is currently 100% dependent on imports but the Commission hopes the first European mines could open as soon as 2030.
“We also have rare earth reserves in Europe, which until now, have not been fully explored,” Šefčovič said. “This is why countries like France, Germany, Portugal, Spain, Sweden, Greenland and Norway, are looking into it.”
To diversify supplies, Europe is also looking to the Western Balkans – notably, Serbia and Albania – as well as Ukraine, which “have very solid reserves of most of these critical raw materials,” Šefčovič added.
But developing mining at home and diversifying supplies is only part of the answer. The European Commission’s strategy also relies on recycling and green standards for batteries, which could help extract huge amounts of untapped raw materials contained in electric waste. Every year, the EU generates some 9.9 million tonnes of waste electrical and electronic equipment but only 30% of it is collected and recycled, the Commission says. Worse, some valuable raw materials are not recovered because they are too difficult or costly to extract.
“The recovery of critical raw materials from this e-waste stands below 1% because we do not have the necessary technology and industrial processes in place,” Šefčovič said. “If you just collect all the old cell phones we have in our drawers, we can immediately build four million car batteries just from the cobalt,” the commissioner remarked, highlighting the vast untapped potential of so-called “urban mining”.
“This is why we’re funding research and innovation in order to develop these processes,” Šefčovič added, saying the EU is already spending “almost €1 billion” on raw material projects as part of the Horizon 2020 research and innovation programme.
Finally, the European Commission is planning stricter green standards for batteries as part of a new battery regulation, expected to be tabled on 9 December, spelling out new standards for batteries, with the aim of reducing the overall carbon and material footprint of batteries manufactured or imported into Europe. This will include “something like battery passports that will ensure easy access to information about key parameters of batteries and their origin,” including the raw materials that went into the manufacturing process, Šefčovič said.
“We also want to make sure that we will be working with raw materials that are traceable and respect ecological, labour and other standards. This is important for European consumers.”
In total, fourteen new measures are expected to form the basis of the new EU batteries regulation, according to Recharge, a trade association representing manufacturers of advanced rechargeable and lithium batteries.
“To put it simply, we want to put the regulation in a form that would provide for mandatory requirements for the greenest, safest and most sustainable batteries on this planet,” Šefčovič told EURACTIV.
The recycling of key raw materials used in the manufacturing of batteries is one of the flagship measures expected in the EU’s updated battery regulation, Recharge said in a briefing paper outlining the main elements of the future EU law. As part of the new rules, the Commission is looking at introducing specific recovery rates for selected materials used in batteries, such as lithium, cobalt and nickel. It also plans to improve the collection rate of used batteries and pave the way for the introduction of mandatory levels of recycled content in new batteries as from 2030.
“Recycling is one of the most effective ways towards an efficient use of our resources in the battery industry. Especially the recovery of high-impact materials brings a true improvement to the environmental and social profile of batteries,” Recharge says. Another flagship measure envisaged by the Commission is the introduction of a due diligence obligation on battery manufacturers, forcing them to trace the materials based on the model of the EU’s Conflict Minerals Regulation, which enters into force in January.
Further measures include the promotion of an aftermarket for used EV batteries and an extended producer responsibility scheme obliging producers of batteries to finance collection, take-back and recycling activities. ECOS, a green NGO, says green standards for batteries are essential to ensure the transition to electro-mobility is done in a truly eco-friendly way.
“We need performant and durable EV batteries, which are easy to repair, reuse and recycle,” said Rita Tedesco from ECOS. “Parameters such as the state of health of the batteries and tests to evaluate them need to be comparable throughout different brands. A minimum set of design standards – such as lifting parts – would make the disassembly process for recycling cheaper, simpler and less time-consuming”.