European Commission President Ursula von der Leyen, speaking at the Mercator Institute for Chinese Studies in ’ last March, announced the European bloc's intention to reduce economic dependence on China’e. Von der Leyen used the term ’riski reduction“, which states the need to reduce risks from Beijing”e overdependence.
China already supplies 98-100 percent of Europe ’'s heavy rare-earth element needs, Turkey 98 percent of its boron needs, and South Africa 71 percent of its platinum needs.
So how will the European Union implement its risk mitigation strategies while relying on imports from China’, which are necessary to create low-emission technologies for a greener future?
Creating a stable and resilient economic environment
John Seaman of the French Institute of International Relations, ’, explained that the transition to a net-zero society is making Europe’ increasingly dependent on China’e because it needs more batteries for electric cars, solar panels and other renewable energy components.
“The question now is: How do you reduce the risks associated with these dependencies? And how do you negotiate with China to ensure that China does not use ’'s resources in ways that harm European ’'s own interests?
EU put forward the European Critical Raw Materials ActMarch 2023The ’te Council of Europe adopted its position on the proposal in June.
As part of a broader strategy, the EU aims to diversify its supply chains in the digital, green and health sectors, make better use of existing trade rules, defend critical sectors and boost trade with other countries.
Do these ambitions resonate with industrial players?
by Emilie Jolivet the Road GroupA consulting firm headquartered in Lyon’, southeast of ’, thinks: “Most of our customers want to regain control over their packaging, especially predominantly from China and Taiwan’. For example, they want to move to Southeast Asia’.
The EU has also started the European Chips Actchip production capacity to meet the needs of the global market by 2030. %He's aiming for a 20’sine.
Jolivet, “We cannot solve supply chains where complex and component cost are also very important. The European Union’'s effort to invest 43 billion Euro’ is very important. Achieving full autonomy in semiconductors will not be enough, but this is the first step towards specializing or re-specializing in this sector, ” said.
France leads the charge
World Bank says demand for critical raw materials due to accelerating green transition by 2050 %He says it's expected to increase by 500 percent. France is trying to rebuild its supply chains, especially for semiconductors and batteries.
The CEA isIt is a French government-funded technological research organization that carries out innovation projects along the industrial value chain. Simon Perraud, deputy director of the Grenoble plant, explained that if France and Europe want to control ’'s future energy systems, they need to control and diversify their industrial value chains.
Perraud, “For example, it is important to invest and continue research and development to support this entire industrial ecosystem through the expansion of the autonomy of electric vehicles, the use of less critical materials in batteries, and the development of battery recycling processes to recover more metals. And all of this at a lower cost, ” said.
Making batteries with less critical materials is the goal of French startup Olenergies’in. It is developing cobalt- or manganese-free Lithium Iron Phosphate (LFP) batteries to power large renewable energy storage or data centers.
Olenergies’in CEO’ and founder Julien Le Guennec, “We choose to use materials that can be found almost anywhere on the planet and easily recycled; This will allow us to produce batteries that last at least four times longer than traditional lithium batteries and, above all, are very sensitive to digital optimization, ” said.
New supply chains are turning into rising costs
These batteries, which are less powerful but more environmentally friendly, can be adapted thanks to artificial intelligence. However, China is 20% more expensive than ’ imports. In order to stand out in the highly competitive LFP battery market, it is necessary to produce large quantities quickly.
Olenergies hopes to open its first giga factory in the race for technological breakthroughs by 2026.
Swedish state-owned mining company LKAB has announced that it has discovered one million metric tons of rare earth metals in Kiruna’ in the north of the country in January 2023’te.
Although it will take time to extract these very important minerals, Europe serves as ’'s largest deposit. EuropeIt is predicted that these metals will become more important than fossil fuels in ’'s transition to more renewable energy use.
This is positive news for Europe, but as John Seaman’ warned, rebuilding Europe’'s supply chains will lead to higher prices and therefore higher inflation.
Special thanks to “CEA Grenoble”a for providing us with some of the images used in this section.
