Lithium (crucial component of electric batteries) and rare earths (strategic metals needed to manufacture chips, LCD screens, military equipment or wind turbines) “will soon be even more important than oil and gas” , said the President of the European Commission, Ursula von der Leyen.
While “the EU’s rare earth needs will be multiplied by five by 2030” and those of lithium soar with the electrification of the economy, “we must avoid finding ourselves again in a situation of dependence, as for oil and gas”, she warned, during her “speech on the state of the EU”.
“The problem is that currently a single country controls almost the entire market […] nearly 90% of rare earths and 60% of lithium are processed in China”, she warned, calling on the Twenty-Seven to “secure their supplies”. “We will build up strategic reserves where supply is threatened “, she assured. Industry Commissioner Thierry Breton, responsible for this dossier, warned of a risk of shortages due to the increase in demand.
Law Project
The European Commission will propose a law for critical raw materials with objectives. “At least 30% of the EU’s refined lithium demand is expected to come from the EU by 2030 and waste treatment should recover at least 20% of the rare earth elements it contains,” he specified.
The EU must also act to “guarantee a level playing field through certification systems for environmental and social performance”, he added. Thierry Breton mentioned the creation of a financial instrument in order to “mobilize investments”.
Ursula von der Leyen recalled that “after the launch of a European battery alliance five years ago, two thirds of the batteries we need will soon be produced in Europe”. And after a semiconductor regulation introduced last year, “the construction of the world’s first mega-chip factory [dans l’UE] will begin in the next few months,” she noted.
Brussels set itself the target in February of doubling the EU’s market share in semiconductors to 20% of global production by the end of the decade, to reduce dependence on Asia . To achieve this, the European Commission unveiled a project in February authorizing 42 billion euros in public investment for the sector.
“The EU will equip itself with the means to guarantee its security of supply, as the United States does for example”, including with possible limitations on exports in the event of a crisis, Thierry Breton then specified.