Here’s what the EU and Chile will (maybe) do on lithium and green hydrogen
Von der Leyen went to Chile to make deals on hydrogen and lithium, but the country has announced the nationalization of reserves. Uphill road for the European Union?
The European Union and Chile will sign a memorandum of understanding on lithium, a metal used in batteries, and will collaborate in the development of projects on green hydrogen, a zero-emission fuel derived from renewable energy sources. This was announced yesterday by the president of the European Commission, Ursula von der Leyen, on a visit to Santiago de Chile, where she met the president Gabriel Boric.
THE OBJECTIVES OF THE EUROPEAN UNION
“We are working to sign a memorandum of understanding soon,” von der Leyen said during the press conference with Boric. The two sides have reached an agreement in principle to form a strategic partnership aimed at developing lithium projects and strengthening value chains.
The European Union is trying to secure non-Chinese supplies of lithium – Beijing is responsible for 28 percent of the lithium's extraction and 58 percent of the global refining – to increase the security of supply of a crucial raw material for the ecological transition: lithium is needed for the batteries that power electric vehicles and that allow the storage of electricity produced by renewable plants. The Commission wants that, by 2030, no more than 65 per cent of the annually consumed amount of a strategic material should come from a single third country.
Our continents are course to decarbonisation, so demand for critical raw materials is rising.
We're working on a strategic partnership on sustainable raw materials value chains.
Both of us have so much to gain. I hope we can sign it soon. https://t.co/VWQn3S2TOk
— Ursula von der Leyen (@vonderleyen) June 14, 2023
CHILE'S PLAN FOR LITHIUM
Chile is part, together with Argentina and Bolivia, of the so-called South American " Lithium Triangle ", which concentrates 56 percent of the global deposits of this metal. In addition to possessing very important lithium resources, around 10 million tons, it is the second largest exporter in the world, after Australia. With the aim of further improving this position, last April the Chilean government announced a plan to nationalize reserves and expand mining activity through public-private partnerships (but still under state control).
However, the decision could have the opposite effect to that sought by President Boric, inducing foreign companies to redirect investments towards other nations – such as Australia – which have more stable and more favorable legislation for private companies.
Chile's move is part of a wider global trend towards " resource nationalism ", ie the assumption of control of mining or energy production by states.
THE GREEN HYDROGEN
Beyond lithium, von der Leyen and Boric announced two initiatives for financing green hydrogen projects in Chile: one is the “Team Europe Project for the Development of Renewable Hydrogen in Chile”, while the other is “ Team Europe Fund for Renewable Hydrogen in Chile”.
The first is a technical assistance programme, oriented towards the development of technologies and the transfer of knowledge, with a budget of 4 million euro. The second is a fund of over 200 million euros, financed by the European Investment Bank (EIB) and the German public institute KfW but managed by the Chilean development agency (CORFO).
WHAT VON DER LEYEN ACHIEVED IN ARGENTINA
The president of the European Commission was in Argentina on Tuesday, where she and President Alberto Fernández signed a memorandum for the creation of a raw materials supply chain for the ecological and digital transitions. Argentina is the fourth largest producer of lithium, and according to von der Leyen it also has what it takes to be a major producer of electricity and hydrogen from renewable sources.
After Argentina and Chile, Ursula von der Leyen will be in Mexico, another country potentially rich in lithium and which has decided to nationalize it .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/unione-europea-cile-litio-idrogeno/ on Thu, 15 Jun 2023 14:37:21 +0000.