Brussels seeks to boost the production of critical materials to ensure supply and avoid dependency #on third countries
European industry knows its weaknesses and perhaps one of the biggest is its dependence on third countries to obtain certain raw materials. The European Union (EU) wants to turn the tables and use the lessons learned during the covid-19 pandemic to achieve autonomy. The Ministers of Industry and the Internal Market of the Twenty-seven met on Monday and Tuesday in Lens (France) to draw up a roadmap.
Semiconductors are a key element. “We have made the mistake of relocating our production,” explained the Commissioner for the Internal Market, Thierry Breton. Currently, most European companies would have to close within three weeks if the supply of semiconductors from China or Taiwan were cut off.
The automobile industry, the manufacture of mobile phones, computers, etc. depend on these chips. In 2021, the European automobile sector stopped producing 11 million cars due to the high price of semiconductors. Given the seriousness of this problem, Brussels already has its sights set on a possible solution and has set itself the objective of relaunching the production of chips in the EU. Moreover, it wants to produce 20% of the semiconductors manufactured in the world by 2050. This would mean quadrupling Europe’s power in the manufacture of these elements. The Commission already gave the green light in November to massive public aid to boost its manufacture and circumvent the restrictions imposed by China.
In the words of the French Secretary of State for the Economy and Finance, Agnès Pannier-Runacher, “it is not about protectionism, but about guaranteeing the supply of critical materials for our economy.” The ministers drew up a list of essential raw materials for European industry, including lithium, cobalt, magnesium and rare earths.
The representatives of the Twenty-seven agreed that it is necessary to take “immediate” action, since if not, Europe “will be left behind in the energy and green transition”. Lithium and cobalt, for example, are essential materials for the manufacture of electric batteries, a technology in which the EU is the largest investor in the world.
To tackle these supply problems, the European business ecosystem must be ‘solidarity’ and there must be ‘fair competition’. In short, the example of what happened during the pandemic will be followed, said the French Secretary of State: “We went from having no vaccines in Europe to being the largest exporters; and we achieved it by working together» .
Only 1% is recycled
Another key lies in the recycling of critical raw materials. Today, only 1% of the materials used in electric batteries and 10% of rare earths are recycled. “We have a wide margin for improvement,” admitted the vice president of the European Commission, Maros Sefcovic.
In parallel, the EU works to produce these raw materials and to forge alliances with countries such as Canada. “By 2030 we hope to cover 20% of the domestic demand for rare earths and 15% of the world’s magnesium production,” Sefcovic said.
Recent tensions with Russia have highlighted the importance of European autonomy. “We depend on countries that use that relationship to add geopolitical pressure. We need to fix that,” she urged.