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European Union Pushes Ahead With Attempt to Create Battery Manufacturing Value Chain in Europe

While the United States is finally taking steps to approach mineral resource policy in a comprehensive and strategic fashion, the European Union got a head start several years ago, and has since begun enacting mineral resource policy initiatives within the context of its raw materials strategy.  With its ambitious 2050 low-carbon vision, and the rise of battery tech (most recently visualized by Visual Capitalist with new data provided by our friends at Benchmark Mineral Intelligence) it comes as no surprise that the European Union places a strong emphasis on the circular economy model and battery technology as core tenets of its mineral resource policy.

Against this backdrop, the European Commission in October of last year launched the European Battery Alliance (EBA), with the objective to “create a competitive manufacturing value chain in Europe with sustainable battery cells at its core.” 

The rationale behind the EBA is that the battery “will represent a high proportion of the value added in the car of the future.”  With the car industry a major player in the European economy, the aim is to retain as much of the value creation in Europe as possible” in order to minimize disruptions in the supply chain. Meanwhile, the EU considers itself “a leader in many sectors of the battery value chain with great potential in recycling and the circular economy.”  The Strategic Action Plan for Batteries adopted in May of this year represents a comprehensive set of concrete measures with the goal to “develop an innovative, sustainable and competitive battery ‘ecosystem’ in Europe,” and the Commission earlier this month announced that “the first pilot production facilities are being built and further projects are announced to establish the EU as the lead player in the strategic area of battery innovation and manufacturing.” 

While praising the European Union’s initiative as an effort to “foster communication and co-operation, encourage consortiums and use existing funding better,” the Financial Times editorial board this week argues that Europe’s push may end up being too little too late as “Asian rivals with scale and expertise are building capacity in Europe, including South Korea’s LG Chem in Poland, Samsung SDI in Hungary and China’s CATL in Germany. The likes of BMW and VW have signed big contracts with them.”

The conclusion the editorial board draws for the European Union applies equally for the United States:

“Battery technology is (…) the kind of area where co-ordinated EU-level action, if done well, could make a difference. Brussels and commission vice-president Maros Sefcovic, who has made the plan something of a personal project, are right to try. Falling even further behind now could leave Europe struggling for decades to catch up — and put countless jobs at risk.” 

The U.S., too, could benefit from a more coordinated policy approach to battery technology – and more broadly to the mineral resource sector.  With global race to corner the market heating up, isn’t it time we put a comprehensive resource strategy in place?