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Electric car, public funds are needed for batteries or the EU will succumb to the US and China. Reports

Electric car, public funds are needed for batteries or the EU will succumb to the US and China. Reports

According to the European Federation for Transport and the Environment, the Old Continent must adopt an industrial policy capable of counterbalancing US incentives: without public funds for the automotive battery market, we risk ending up crushed by the protectionist policies of the States and Asian boldness

Pause liberal theories (already shelved, more or less all over the world, including Europe, with the pandemic and with the war), further postpone the day when the ban on state aid will come back into force and bankroll the market for 'automotive and, in particular, the strategic asset of batteries with flows of public money. This is requested by the European Federation for Transport and the Environment, more commonly known as Transport & Environment (T&E), which welcomes under its banner non-governmental organizations operating in the field of transport promoting sustainable mobility.

public funds batteries

TWO TYPES OF UNFAIR COMPETITION: ASIAN AND AMERICAN

In its latest report focused on possible counter-offensives to Joe Biden 's anger, i.e. the Inflation Reduction Act, the package of protectionist laws that favor industries that have a supply chain in the 50 states, while disadvantaging importers, Transport & Environment highlights the risk that companies engaged in projects on EU soil may be incentivized to transfer their activities to the United States on the back of tax breaks and other subsidies provided by the IRA.

PUBLIC FUNDS FOR BATTERIES, ALL AGREED? NO

For this reason, the organization suggests that Brussels set up a European sovereign wealth fund to support green technologies to be financed through common debt issuance. Moreover, in the recent past the EU has already issued green bonds guaranteed by the triple A which the EU enjoys on the markets (also thanks to the contribution of the Nordic countries, not surprisingly opposed to new common debt) used to finance targeted interventions on the ecological transition.

And a similar plan, a sort of European IRA, is already being studied by the Commission, but in this case, in addition to the Frugals, it is also necessary to overcome the resistance of Germany, which does a lot of business with China, especially in the automotive field and is not too inclined to raise walls of a protectionist nature, given that Chinese brands are about to make their debut on Community soil and could take revenge on the industries of the Old Continent to which they have opened their own, endless, internal market.

WHAT SHOULD WE DO IF…

Yet financing the electric car and battery market with public funds for T&E would be the only way to ensure "a level playing field for all Member States", preventing those with greater resources from offering national "generous public aid to companies" . The fund, as reported in Quattroruote , should offer "exclusively support to the production sectors affected by the IRA" (electric vehicles, batteries and renewable energy) and disburse resources "directly to companies" as opposed to the European Recovery and Resilience Facility (RRF), therefore, if necessary, provide funds to be used as bank guarantees.

According to the report, two-thirds of European demand for cathodes – which contain critical raw materials – could be produced at EU level as early as 2027. Existing and planned cathode production projects include Umicore in Poland, Northvolt in Sweden and BASF in Germany.

Dependence on China for battery refining and metalworking could also drop dramatically: more than 50% of Europe's refined lithium demand could come from European projects by 2030, according to T&E forecasts. Among them, RockTech Lithium and Vulcan Energy Resources in Germany and Imerys in France. Naturally, as regards the new extractive activities in the 27 States, the condition that they are in accordance with the law must be respected, and the Community one includes the highest environmental standards.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/auto-elettrica-sulle-batterie-servono-fondi-pubblici-o-lue-soccombera-a-usa-e-cina-report/ on Mon, 30 Jan 2023 10:32:54 +0000.