The war between China, the US and the EU over electric car batteries
Giuseppe Gagliano's analysis on the race to invest in the production of batteries at the base of electric cars
Since the Kyoto Protocol of 1995 and the Paris Climate Agreement of 2015, both aimed at maintaining global warming at a level "well below 2 ° C" in the long term, the energy and ecological transition is in motion and upsets strategies and power relations.
Today, more and more vehicles run on rechargeable electric batteries. But what are the real economic and environmental issues underlying this real technological paradigm shift?
The race to invest in worldwide battery manufacturing is in full swing and China is several steps forward.
China entered the battle for car batteries with the ambition of world domination. Upstream control over the minerals necessary for their manufacture, and more particularly the procurement of cobalt and lithium, essential raw materials for the manufacture of accumulators, constitutes a competitive advantage and is part of its strategy. The economic war for these batteries is raging behind the boom in electric cars.
According to the US Geological Survey , China dominates this market for rare materials and metals, the main components for the production of rechargeable batteries, a profitable market. Control almost all of this market. Of the 170,000 tons produced last year, 71% (120,000 tons) were produced by the latter. The other producers: Australia (20,000 tons) and the United States (15,000 tons) are far behind.
This situation of China's near-monopoly on rare earths appears to be taking a dangerous turn in the merciless trade and economic war between the two major world powers: the United States and China. It is no coincidence that China has proposed a project to regulate the production and export of 17 rare earth minerals in China.
But alongside the US, another competitor is the EU.
It is no coincidence that Thierry Breton, European Commissioner for the Internal Market, urged EU governments to be more active in defining global standards for ultralight lithium metal batteries, key for many strategic industries and electric cars, not to give a technological advantage to China. The influence on international rules and standards, that is, on the rules of the economic game, is an essential, albeit not very visible, component of the competitiveness of companies and states.
While China has benefited from the generosity or naivety of Westerners to join the WTO, now Beijing wants to influence the drafting of international lithium standards to favor its companies in international markets.
Let's not forget that while the European Union currently produces only 1% of the world's lithium-ion batteries, its Asian competitors capture three-quarters of the world's supply. The podium of the manufacturers is composed of: the Chinese Contemporary Amperex Technology (CATL), the Japanese Panasonic and the South Korean LG-Chem, followed by the American Tesla.
Faced with this Asian and, to a lesser extent, American hegemony, Europe wants to break this American-Asian stranglehold on battery production.
Led by Germany and France, the EU launched the “Airbus Batteries” in autumn 2017, accompanied by a € 3.2 billion state aid authorization. Then, on January 26, 2021, the European Commission authorized the payment of 2.9 billion euros of public aid for a project common to twelve Member States with the aim of achieving a market share of 25% of battery production. global level by 2030.
Germany, head of the rotating presidency of the European Union from July to the end of December 2020, managed to tear up the investment treaty between China and the EU a few days before the end of its mission. As China's largest trading partner in Europe, it had a valuable economic advantage in securing the deal. In doing so, he demonstrated great economic intelligence. Its power of influence in Europe and the world will allow it to attract the largest battery manufacturers in the world to its soil: the Chinese Contemporary Amperex Technology Co. Limited (CATL) is currently building its first factory in Europe at ERFURT, the SVOLT Energy Technology, a Chinese company will start construction of a battery manufacturing plant in Überherrn (Saar province). PSA, through its German subsidiary Opel, has joined forces with the Saft group, a subsidiary of the oil company Total, to start a battery cell factory in Kaiserslautern, eastern Germany.
The energy transition implies a very strong growth in the need for batteries. Their production is an important step in achieving climate goals by 2030, a path littered with pitfalls, as information warfare plays an important role in their impact on the environment.
In the 1990s, General Motors (GM), in order to meet California's new zero-emission vehicle laws, began producing the EV1 , the first production electric car of the modern era. It was a great commercial success, but a disinformation campaign orchestrated by the oil lobbies, backed by the then Bush administration, forced GM to abandon its EV1 production program in 2001.
What happened with the EV1 could happen again with electric cars plying our roads more and more.
While several scientific studies highlight the ecological advantage of lithium-ion batteries, voices rise and speak of the "big scam" around electric cars.
In the media and on social networks, defenders and detractors clash with fake news.
The debate over rare earths and metals for battery production is reaching its peak.
Lithium, at the base of batteries, is a difficult resource to extract and its production has very strong impacts on the environment. Journalist Guillaume Pitron, author of “The War of Rare Metals” points out the enormous quantities of water and chemicals required for the extraction and refining of these metals. On the other hand, several journalistic inquiries have denounced the exploitation of children employed in the cobalt mines in the Democratic Republic of Congo.
Finally, in Finland , the great development of electric car batteries worries environmentalists.
In short, the energy transition does not have a linear path but is characterized by continuous conflicts in the legal, political and economic spheres.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/la-guerra-tra-cina-usa-e-ue-per-le-batterie-delle-auto-elettriche/ on Sun, 04 Apr 2021 06:17:09 +0000.