Europe could end its dependency on China for electric car batteries by 2030, but only if it keeps up with Joe Biden’s $369bn (£298bn) green subsidy spree. The guard said.
The British newspaper said a report by renewable energy campaign group Transport & Environment said the EU was on track to produce enough lithium-ion battery cells by 2027 to meet demand and cut China off supply chains.
The study predicts that Europe’s reliance on China for refining and processing battery metals could also fall dramatically, and predicts that by 2030 more than half of Europe’s refined lithium demand could come from European projects.
There are now no lithium refineries in Europe, and about 90% of the metal’s global processing takes place in East Asia, the report said. However, refinery projects in Germany and France are expected to improve Europe’s prospects, and planned EU legislation on critical raw materials is designed to ensure they meet high environmental standards.
The guard noted that MEPs had raised concerns that the UK’s electric vehicle supply chain was overly dependent on China, one of the main vulnerabilities amid political tensions between Beijing and the West.
The UK has banned the sale of new petrol and diesel cars from 2030, while the EU has committed to phasing out internal combustion engines from 2035.
However, Biden’s flagship Inflation Reduction Act (IRA) has lured green investment into the US and put pressure on the UK and EU to respond at a time when policymakers are imposing windfall taxes on renewable energy companies.
After The guardThe T&E report showed that two thirds of Europe’s demand for cathodes could be produced on the continent by 2027, with projects such as Umicore in Poland and Northvolt in Sweden contributing to this.
However, the study’s authors reportedly warned companies not to move projects planned for Europe to the US, as they would be tempted by the IRA’s tax breaks and other subsidies for locating battery supply chains in the US.
Julia Poliscanova, Senior Director for Vehicles and Electromobility at T&E, said: “Today, half of the lithium-ion battery cells used in the EU are already manufactured there. But the Anti-Inflation Act has changed the rules of the game and Europe must put more money on the table or risk losing planned battery factories and jobs to America.”
T&E called for a special EU fund with cash raised through joint issuance of debt to support investments in electric vehicles, batteries and renewable energy.
Last week Britishvolt, the battery startup that had hoped to build a “gigafactory” near Blyth, Northumberland, collapsed in administration. The company struggled to find funding and was denied access to promised government funding after failing to meet government targets.
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Its collapse has sparked calls for a comprehensive industrial strategy to outline Britain’s approach to the green economy, including the automotive industry’s shift to electric vehicles.
On Monday, Tony Danker, the director-general of the Confederation of British Industry, said the government had failed to invest in the green economy and was falling behind the US and EU.
He said the US and Europe were “outdoing and tricking” us in their approaches to promoting low-carbon investment.
“While our competitors across Europe, Asia and the US are making their move and banging the hell out of leather, we seem to be questioning ourselves and hoping for the best,” he said in a speech at University College London.