Battery industry cautiously welcomes new EU legislation

European battery industry participants have welcomed the proposed EU Critical Raw Materials Act (CRMA) and Net Zero Industry Act (NZIA) as a step in the right direction for the European lithium-ion supply chain.

Both acts are aimed at delivering access to battery metals for European businesses and removing barriers to development of these resources and downstream products in the EU.

"Eurobat applauds the European Commission for the publication of the Net Zero Industry Act and Critical Raw Materials Act yesterday," a spokesperson for the Association of European Automotive and Industrial Battery Manufacturers (Eurobat) said. "They represent a positive step towards a European industrial plan for cleantech, critical for providing much needed clarity for investors and operators along the clean energy value chains."

The CRMA includes several battery metals on its list of critical raw materials, including lithium, cobalt, battery grade nickel, manganese and natural graphite.

"Eurobat has been consistently calling for the European Critical ‎Raw Materials Act to support the further development of clean technologies making use of raw materials. Batteries, in particular, represent a key growth vector of raw material demand."

Francis Wedin, chief executive of Vulcan Energy Resources, told Argus that without the new approach, the EU battery industry would not survive competition with China, which produces up to 80pc of the worlds lithium hydroxide.

"Lithium is the lifeblood of the European auto industry. There is no substitute. Without it, the industry will not be able to electrify, and will therefore not survive competition from China, which has gone 'all-in' on its electric auto industry," he said.

Wedin welcomed some of the new provisions in the act, such as those aimed at streamlining permitting and the creation of a 'one stop shop' authority for permits to strategic net zero projects, outlined in the NZIA.

"We also welcome the improved access to public financing," he added. "The NZIA applies to our geothermal renewable energy developments, and the CRMA applies to our lithium development, making us fully aligned with Europe's legislation to produce lithium and renewable energy sustainably."

Global lithium demand is set to grow to 2.58mn t LCE by 2030, according to Argus forecasts, and the EU says global demand could multiply 89-fold by 2050.

"The inclusion of lithium on the new list of strategic raw materials is positive for the lithium industry and underscores its key role in the energy transition," a spokesperson for the International Lithium Association (ILiA) told Argus.

The CRMA also highlights European dependence on single sources for much of its cobalt, pointing out that China produces 60pc of the world's cobalt and the Democratic Republic of the Congo produces 63pc of the world's mined cobalt. It is unclear how the EU plans to rectify that situation, with such a large concentration of the world's cobalt resource centred on the DRC.

"Europe needs a strong and simple regulatory framework that will foster investments and accelerate progress towards a clean and sustainable future. A key element of this is lifting regulatory barriers and inconsistencies between legislation that affect investments in green technologies, such as cobalt," said Caroline Braibant, interim director-general of the Cobalt Institute.

Other battery materials manufacturers urged speed in ratifying the new legislation when it goes to the European Council.

"Umicore is keen for the European Parliament and council to act fast, decisively and with unity to legislate and implement these acts, including the necessary funding, in the interest of countering the damaging effects of climate change and to keep the European Union's frontrunner position in sustainability and linked innovations," said a spokesperson from Umicore, a battery cathode producer and recycler.

By Thomas Kavanagh