Europe without China will not go far – Auto – Kommersant

The EU authorities have set themselves two ambitious goals: to switch to 100% electric vehicles by 2035 and at the same time get rid of energy dependence on China. However, analysts say, so far these goals do not fit well with each other, since Europe has nothing to replace Chinese supplies of lithium, a key element for batteries.

A couple of weeks ago the European Commission introduced two documents at once, which should largely determine the energy future of the European Union. At the same time, both initiatives are aimed at overcoming dependence on China. And earlier, the EU authorities decided that cars with gasoline and diesel engines will no longer be sold on the territory of the economic alliance from 2035. However, as noted Financial Timesthe reality is still very far from the plans of the EU leadership.

The transition of the EU to electric vehicles requires a significant increase in the production of lithium in Europe, which is used in the production of batteries.

Meanwhile, 60% of the global volume of lithium processing now falls on China, which is the main supplier of this metal to Europe. The massive transition of the EU to electric vehicles will provoke an increase in demand for lithium by 5 times by 2030 – up to 550 thousand tons per year. This is about 2.5 times more than the region is capable of producing, Benchmark Mineral Intelligence analysts calculated.

Lithium producers are not yet ready to eliminate the shortage. So, for example, Albemarle, the world’s largest mining company for this metal, abandoned plans to launch production in Europe, as it could not find a single commercially profitable project. “The resources that we know about in Europe are low quality and relatively small,” Scott Tozier, group chief financial officer, told the Financial Times (FT).

One of the few who decided to mine lithium in Europe was the Australian Vulcan Energy Resources and the French Imerys. Vulcan intends to establish production in Germany, and Imerys – at home. At the same time, Vulcan hopes to produce 24 thousand tons per year two years after the start of production in 2025, and Imerys – 34 thousand tons per year from 2028. In total, this should be enough to create about 1.2 million batteries for small electric vehicles per year – a negligible number compared to the demands of the industry. Already in 2022, 11.3 million electric vehicles were sold in Europe.

At the same time, Vulcan CEO Francis Wedin believes that in the future it will only be more difficult for automotive manufacturers in Europe to obtain the necessary volumes of lithium, as China “will give priority to supplies for its own industry.”

The heads of mining companies, writes the FT, have already turned to the EU authorities with a request to provide financial support for lithium mining projects at the state level.

They are also asking for the elimination of bureaucratic barriers that have slowed down the process of starting production for years. Analysts believe that Europe is seriously lagging behind not only China, but also the United States, which managed to spend billions of dollars to provide its automotive industry with the necessary resources.

“Europe’s extractive sector is suffering severely from a lack of early exploration cash and far more difficult permitting conditions than Africa, Australia and Canada,” Kevin Murphy, an analyst at S&P Global Commodities, told the FT. from external resources to supply their industry.

Kirill Sarkhanyants