EBA250 calls for upgrading the ambitions of the European battery value chain and outlines a plan to achieve them. Thore Sekkenes, EBA250 Program Director at EIT InnoEnergy, explains more.

IN European Battery Alliance (EBA) is recognized as a model of European industrial strategy. EBA250, EBA’s industrial development program, is now calling for progress in the European battery value chain and has proposed an action plan in this regard.

The European battery market is booming. In the case of electric vehicles alone (EVs), 2.3 million were sold in Europe last year, a record high market share of 21%. This growth rate is indicative of the whole battery value chain in the EU and is largely due to the role of the EBA.

Launched in 2017 under the auspices of Vice President of the European Commission Maroš Šefčovič and led by EIT InnoEnergy, EBA’s mission is to create a competitive and sustainable value chain for battery production in Europe. Our achievements so far speak for themselves. However, due to supply chain disruptions experienced during the COVID-19 pandemic and the recent war in Ukraine, the need for sustainable industrial value chains for EU economic growth, decarbonisation and strategic autonomy is becoming increasingly urgent.

Although we have made significant progress, there are still gaps in the full implementation of a sustainable end-to-end battery industry. Dealing with them will further support the decarbonisation of the EU and provide even more opportunities for industry.

© iStock / deepblue4you

Five years of the European Battery Alliance

The success of EBA since 2017 is significant, especially in batteries and application segments. In total, more than 180 industrial battery projects are being developed in the EU, with 47 in the battery cell segment. Thanks in large part to the work of the EBA, the EU must meet 69% and 89% of its growing demand for batteries by 2025 and 2030, respectively, and will be able to produce batteries for up to 11 million cars a year.

The battery market has also attracted significant funding. To support its development, two multi-billion euro important projects of common European interest (IPCEI) have been initiated. Under Horizon Europe, € 160 million has been allocated to battery research in 2021, and € 925 million has been earmarked in the EU budget by 2027.

Although a good problem, the EBA is now ahead of its 2025 plan, which we set in 2017. We then forecast € 250 billion in new annual GDP and 400 GWh of cell production capacity committed by 2025. By 2021, the total level of investment in the battery value chain is € 127 billion. An additional investment of € 382 billion is expected to create a self-sufficient battery industry by 2030. The goal is for Europe to be able to sustain 1,000 GWh of demand in mobility, energy storage systems (ESS), last mile and other sectors during this time. .

It is through these achievements that EBA has established itself as a model of industrial strategy in Europe, which is being replicated in other countries and sectors. The work also led to a change in thinking in Europe and encouraged further public-private cooperation.

European battery value chain
© iStock / cicerocastro

Overcoming the gaps for a sustainable end-to-end battery industry

Identifying and addressing gaps is now needed to support the autonomy and continued growth of the battery value chain in the EU and, in turn, decarbonisation. As part of its call to increase the ambitions of the European battery industry, EBA250 recommends a set of priority actions to address the gaps found in both the upstream and downstream segments of the battery industry and the much-needed workforce training.

The extraction of local raw materials, the processing and refining and the production of active materials for batteries remain a problem. Downstream, attention should also be paid to the recycling of end-of-life (EOL) or scrap from production facilities to be introduced as high-quality recycled metals back into the EU supply chain.

From a regulatory point of view, the rapid adoption and implementation of the EU Battery Regulation, including the forthcoming Battery Passport, will set the standard for sustainable, traceable and circular batteries in Europe, competitively positioning European battery companies. Strict and ambitious regulations need to be made here, with a special focus on the carbon footprint of batteries, including the procurement of raw materials, recycling and the thresholds for recycled material in batteries sold in the EU.

Similarly, the rapid adoption of the relevant legislation in the European Commission’s Fit for 55 package will increase the demand for batteries in order to continue to decarbonise the transport system and speed up the 100% renewable energy system. This includes measures to support battery-based light and last mile mobility, the introduction of charging infrastructure, emission efficiency standards for cars and vans, facilitating system integration and stationary storage at the network level and below the meter.

Investment needs support to reduce the risk of investing in raw and recycled batteries. This can be achieved through the implementation of an improved set of tools, including a set of measures such as adapted authorization processes to reduce time and risk, the introduction of parallel rather than consistent processes and harmonized rules for public consultation and environmental impact assessment. .

Increased support for private investment is also needed. Clarifying the state of extraction and processing in the EU taxonomy for sustainable financing and qualifying all non-significant battery (DNSH) activities would be a big step. In addition, the strong involvement of European and national public investors, combined with improved access to public grants to reduce the cost of capital in the early stages, will encourage private investment.

Finally, the accelerated growth of the battery value chain brings with it a growing need for a skilled workforce in all functions and at all levels. In order to meet the needs of industrial projects that are already in preparation, approximately 800,000 workers will need to be trained or promoted by 2025. To overcome this skills gap, we propose to allocate 2% of the budget to The European Social Fund to fund battery-related training programs over the next three years and accelerate the implementation of the EBA Academy, our coordinated, pan-European effort to improve the skills and retraining of key workers across the continent.

Update of the European Strategic Action Plan for Batteries 2030

Given the accelerated progress so far, we consider it necessary to update the European Strategic Action Plan for Batteries 2018 in cooperation with the European Commission to achieve equally ambitious targets for 2030.

In addition to the EU maintaining 1000 GWh of annual demand, the update should also reflect the expected annual added value created in Europe of around € 625 billion by 2030. For 2030, we are proposing targets for 100% coverage of EU internal recycling, 90% of local cell production covers EU needs, 60% of local raw materials are processed in the EU and 40% of active materials used in EU production are supplied.

The recommended actions under the updated plan also serve many strategic objectives, the main of which is to ensure the sustainability and strategic autonomy of the EU throughout the battery value chain. In addition, we will continue to accelerate the demand for sustainable batteries made in Europe, while speeding up regulation and authorization and maintaining Europe’s technological sovereignty through constant access to finance. Finally, building strategic alliances with non-EU stakeholders and strengthening external partnerships will increase the sustainability and competitiveness of the EU battery industry.

Batteries are at the heart of EU decarbonisation

In order for the EU to achieve its energy and climate goals, batteries and the further development of a viable European ecosystem are crucial. The EBA aims to create a competitive and sustainable battery cell chain in Europe by ensuring that all Europeans benefit from safer traffic, cleaner vehicles and more sustainable technological solutions. By adopting the updated EBA Strategic Action Plan and making progress on more immediate action points, we can accelerate the transition to clean energy in Europe while continuing to build a strong, competitive battery value chain.

Thor Sekenes
EBA250 Program Director
EIT InnoEnergy

Please note that this article will also appear in the tenth edition of ours quarterly publication.

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