Insight from Brussels: EU aims to become powerhouse of battery production and recycling

The EU plans to invest billions of euros developing a “green label”, sustainable electric vehicle battery industry in a bid to challenge Asia’s market dominance.

The EU battery market could be worth up to €250 billion ($282 billion) in 2025, with global demand for electric vehicles forecast to reach up to 900 million by 2040, the European Commission said in an update to its 2018 strategic action plan on batteries in April.

This means EU demand for lithium, nickel, cobalt, manganese and graphite as battery raw materials will grow significantly in the next decade, creating potential security-of-supply issues as production is concentrated in just a few countries outside Europe.

The EC wants to see the EU fully exploiting its own battery raw material resources to mitigate this supply risk, and requiring responsible mining practices for materials sourced outside Europe.

“It is projected that in 2025, provided a favorable regulatory and enabling framework is in place, and assuming that all ongoing EU projects are in place, EU lithium production could cover up to 30% of the world total,” the EC said.

It is also working with the European Investment Bank, “key industrial actors” and national governments to develop facilities to ensure lithium and graphite sourced in the EU can be processed in the EU.

China currently dominates the lithium-ion battery supply chain, including battery-grade refining and processing. The EC also wants industry to re-use and recycle electric vehicle batteries, as part of its efforts to create a circular economy and optimize raw material resources.

The EC's scientific research arm, the JRC, has estimated that recycling materials from electric vehicle batteries could provide about 10% of EU cobalt demand in 2030, if supportive regulation is put in place. This would be higher than the share from EU mining.

Better, cleaner EU batteries The EU has just 3% of the global 147 GWh/year of lithium-ion battery production capacity, trailing behind both Asia, with 85%, and the US, with 12%, despite spending millions on research.

EC vice-president for energy union, Maros Sefcovic, remains optimistic that the EU sector can grow, however. “I am convinced that EU car-makers will go for EU batteries, because they will be better, cleaner and made in Europe,” he said on April 9.

EU electric vehicle batteries would be made from responsibly-extracted raw materials, and use modern technology and software, for example to enable vehicles to supply electricity back into the EU grid for balancing, he said.

The batteries could be reused for electricity storage in homes and in industry, and then recycled, maximizing their value. There would also be an advantage to just-in-time carmakers having the battery supply chain close to the car plants, he said.

The EC set up the European Battery Alliance with industry in October 2017 to promote investment and growth in this sector. The companies and organizations involved have since announced up to €100 billion ($113 billion) of total private investment in battery ventures, including producing primary and secondary materials in the EU, and building battery cell giga-factories.

Up to 30 such giga-factories will have to be built in Europe over the next 10 years to meet the growing demand from electric vehicles, according to the EC. Focus on research The EU risks remaining at a competitive disadvantage in this sector unless it can develop and exploit breakthrough technologies, according to an April report by the EU Court of Auditors.

That could mean the EU needs to shift its focus from lithium-ion research to other options. The EU gave €315 million to battery research from 2014 to 2018 under its Horizon 2020 program, including €164 million – over half – to lithium-ion research.

Its latest Horizon 2020 call, open until April 25, offers a further €114 million for battery research this year, including around €30 million for advanced lithium-ion cells, €13 million for lithium-ion cell materials and transport modelling, and €2 million for a network of lithium-ion cell pilot lines.

It also earmarks some €25 million for solid state batteries for electric vehicles, plus €24 million for materials technologies for non-automotive battery storage, and €15 million for advanced redox flow batteries for stationary energy storage. The EU will decide which projects will receive funding by the end of September.