T&E: ‘EU made batteries up to 60% less carbon intensive than Chinese’

According to a new analysis by Transport & Environment (T&E), onshoring the EV supply chain to Europe would cut the emissions of producing a battery by 37% compared to a China-controlled supply chain. This carbon saving rises to over 60% when renewable electricity is used.

“Producing Europe’s demand for battery cells and components locally would save an estimated 133 Megaton of CO2 between 2024 and 2030, equivalent to Czechia’s total annual emissions. But T&E also warns that over half of Europe’s battery production plans are still at risk without stronger government actions.

More than half are still insecure

“However, the report also finds that less than half (47%) of the lithium-ion battery production planned for Europe up to 2030 is secure. This is up from one-third a year ago following a raft of measures put in place to respond to the US Inflation Reduction Act,” says the T&E press release.

“The remaining 53% of announced cell manufacturing capacity is still at medium or high risk of being delayed, scaled down, or canceled without stronger government action,” it continues.

Julia Poliscanova, senior director for vehicles and emobility supply chains at T&E, said: “Batteries, and metals that go into them, are the new oil. European leaders need laser-sharp focus and joined-up thinking to reap their climate and industrial benefits.”

“Strong sustainability requirements, such as the upcoming battery carbon footprint rules, can reward local clean manufacturing. Europe needs better instruments under the European Investment Bank and EU Battery Fund to support gigafactory investments.”

Slow progress

France, Germany, and Hungary have made the most progress in securing gigafactory capacity since T&E’s previous risk assessment last year. ACC started production in Pas-de-Calais last year in France, while Verkor plants in Dunkirk and Northvolt in Schleswig-Holstein, Germany, are going ahead thanks to generous government subsidies.

Finland, the UK, Norway, and Spain have the most medium or high-risk production capacity due to question marks over projects by the Finnish Minerals Group, West Midlands Gigafactory, Freyr, and InoBat.

T&E called on lawmakers to help lock in investments by doubling down on EU electric car policies, enforcing strong battery sustainability requirements that reward local manufacturing, and beefing up EU-level funding.

Securing the whole chain

“Securing other parts of the battery value chain will be even more challenging, given China’s dominance and the EU’s nascent expertise,” T&E adds. The report finds Europe has the potential to manufacture 56% of its demand for cathodes – the battery’s most valuable components – by 2030, but only two plants have started commercial operations so far.

By the end of this decade, the region could also fulfill all of its processed lithium needs and secure between 8% and 27% of battery minerals from recycling in Europe. However, T&E also insists processing and recycling plants need EU and state support to scale quickly.

Julia Poliscanova once more: “The battery race between China, Europe, and the US is intensifying. While some battery investments at risk of being lured away by US subsidies have been saved since last year, nearly half of planned production is still up for grabs. The EU needs to end any uncertainty over its engine phase-out and set corporate EV targets to assure gigafactory investors that they will have a guaranteed market for their product.”

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