Electric batteries: the Court of Auditors of the EU is alarmed by the risks on production

Efforts by the European Union (EU) to produce more batteries for electric cars may not be enough to meet demand, while the end of new thermal engine vehicles is scheduled for 2035, alarms the Court of EU accounts.

In a report published on Monday, the institution points to the problems of availability of the raw materials necessary for the manufacture of batteries, the increase in the price of these raw materials and energy, as well as the global competition likely to undermine European competitiveness. .

“Almost every week, a new battery giga-factory is announced in Europe,” acknowledged the head of the audit, Annemie Turtelboom during a press briefing. However, “the chances of the EU becoming a world leader in battery production do not seem good”, she warns.

Bags of lithium carbonate at an extraction site in Bolivia, July 10, 2019 (AFP/Archives/Pablo COZZAGLIO, Pablo COZZAGLIO)

“We face the risk of seeing the EU miss its target of ‘selling only new zero-emission cars by 2035, or of only being able to ‘achieve this target by importing batteries or electric vehicles, which would harm European industry,” she said.

“The EU must not find itself with batteries in the same position of dependence as it had with gas towards Russia,” warned the official.

The EU Court of Auditors predicts that “in the short term, European battery production will face a global shortage of essential raw materials”.

She cites projections by the European Commission’s Research Services (JRC) that “the global shortage will really be felt by 2030, when most of the EU’s battery production capacity will become operational”.

However, for five key raw materials (cobalt, nickel, lithium, manganese, natural graphite), the EU is 78% dependent on imports from a small number of countries.

A backhoe fills a dump truck with stone blocks containing lithium on May 25, 2023 near Araçuai, in the state of Minas Gerais, Brazil (AFP/Douglas Magno)

Some 87% of raw lithium is imported from Australia, 68% of cobalt from the Democratic Republic of Congo and 40% of natural graphite comes from China.

– “Unaffordable” vehicles –

However, the EU does not have free trade agreements with these three main suppliers that could guarantee sustainable access to these raw materials.

And some countries are associated with geopolitical risks that could jeopardize supply, underlines the Court of Auditors, which also emphasizes the increase in global demand.

As for the extraction of these minerals in the EU, Ms Turtelboom noted that while lithium was present in Portugal and France, there were “on average 12 to 16 years between discovery and the start of production”. .

Too fair for the 2035 target, she said, adding that since not all the necessary raw materials are present in Europe, “it won’t solve all the problems” anyway.

Miners bring up sacks of ore from the Shabara cobalt mine in southeastern DR Congo on October 12, 2022 (AFP/Junior KANNAH)

China currently represents 76% of the world production of electric batteries and the EU 7%.

The EU also faces strong competition from the United States in particular, which with its Inflation Reduction Act (IRA) offers incentives to companies that decide to locate their battery production plants there. .

To respond to this, in mid-March the Commission proposed regulatory relief aimed at promoting green industries, including batteries, a text currently under negotiation.

Another legislative project, presented together, aims to reduce the EU’s dependence on critical raw materials by promoting extraction in Europe and commercial cooperation with more suppliers.

Aerial view of the brine ponds and processing areas of the lithium mine of the Chilean company SQM, on September 12, 2022 in Calama, in the Atacama desert, Chile (AFP/Martin BERNETTI)

However, the Court points to other dangers: “with the increase in the cost of factors of production such as energy and raw materials, batteries and consequently electric vehicles could become unaffordable for a large number of owners” , leading to “lower demand for electric vehicles and less economic interest in investing in production facilities”.

In particular, the institution is asking the European Commission to update its strategic action plan on batteries published in 2018, paying particular attention to securing access to raw materials.

© 2023 AFP

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