The proposal for the EU Battery Alliance was launched by the Vice-President of the European Commission Maroš Šefčovič last October. More details will be included in the third mobility package, published in May. The alliance is an important step in recognizing the key role of the European Battery industry in the transition towards decarbonized energy and transport sectors. It is important, however, to take into account the full picture of the European Battery markets, and to align legislation concerning batteries.
Since October 2017, several newspapers reported about the launch of the “Airbus for batteries”, as the Vice-President of the European Commission Maroš Šefčovič nicknamed its initiative for a European Battery Alliance (EBA). Several stakeholders participated to the different meetings and working groups organized under the EBA, covering the entire value chain of batteries: providers of raw materials; cells and battery manufacturers; battery system integrators; carmakers; utilities and so on.
The target was quite ambitious: to develop a European Battery Industry capable of competing with Asian manufacturers at a global level, to make sure that battery cells are manufactured in Europe and that the value and the know-how related to batteries stays within Europe. Maroš Šefčovič reported that by 2025, the European battery market could be worth around €250 billion per year, and it is imperative for Europe to not leave it to our global competitors.
To address this challenge, all stakeholders contributed to the development of a list of actions and priorities, covering the entire battery value chain.
From a legislative point of view, a key problem in past years was the lack of an overall strategy, or blueprint guiding EU initiatives on batteries. Already in 2017, EUROBAT launched a call to develop a battery strategy to address this issue: batteries are at the very heart of the shift towards a decarbonized society, encompassing several industrial sectors, from energy storage and grid stability to warehouse and port logistics, telecommunication and all modes of transport. As such, there is a real risk of developing legislation lacking in coherence. Clear examples are the overlap between Battery Directive, End-of-Life Vehicles Directive and REACH, and the possibility of banning substances or entire technologies. Overall, it would be important to move away from a regulatory system based on prohibitions and towards a system that highlights the benefits of batteries in terms of sustainability, availability of resources, socio-economic aspects such as EU manufacturing footprint, recycling efficiency etc.
The main objective of the EBA should then be, first and foremost, the development of an appropriate legislative framework for batteries, encompassing all relevant sectors and covering all battery technologies and applications.
The availability and accessibility of raw materials (cobalt, lithium, nickel, copper, etc.) is often a concern when it comes to batteries. Indeed, different studies point out the risk of bottlenecks in supply of materials. Addressing this point is a clear priority for the EBA, and this must be done through the EU Raw Materials initiative, with responsible use of resources available in Europe and EU diplomacy towards resource rich countries outside of Europe.
Maroš Šefčovič clearly addressed the issue of sustainability, referring to a value chain centered on “green” high performance batteries. This means “sustainable and responsible supply of raw materials, clean energy based production process, recyclability and second use¹”. Recycling is surely a key requirement for the development of green batteries. Lead based batteries are a success story in this sense, with almost 100% of batteries collected and recycled in Europe. Industrial processes for the recycling of lithium-ion batteries are already available, even if they can be improved with the scaling up of supply of used batteries. What is currently missing are the volumes of used batteries to create a real business case for recyclers.
Second life of used EV batteries is also an interesting new development, but it is important to remark that these batteries will enter the already existing stationary battery market, and they will have to do it on an equal footing with other technologies. Research in improved battery management system, analysis of state of health, appropriate remanufacturing processes and standards can support second life, but it should not redirect resources from the recycling process, which should be the priority.
Another important challenge is market development and support. Three sectors are relevant in this debate: stationary, automotive and motive.
For stationary, the approval of the Clean Energy Package will be paramount. Rules for energy storage included in the package are a step in the right direction, and we are looking forward to the final green light on this package. Network codes and implementation will also be important to ensure the development of business models on battery energy storage at every level of the grid, but also vehicle to grid and smart charging of electric vehicles. The motive power market (yellow machines, forklift trucks, etc.) also has a lot of potential for electrification: ICE lift trucks still represent almost 50% of total orders in Europe.
On the automotive side, the Commission is also proposing new CO2 emissions targets for the post-2020 for cars, vans and heavy duty vehicles. One of the aims of this proposal is to boost the market for low emissions vehicles. We must not forget, however, about the decarbonisation of the entire fleet: the Commission is proposing a benchmark of 30% low emissions vehicles by 2030, leaving 70% of new cars and vans still running on conventional ICE. Batteries can offer the possibility to reduce the emissions of this cars as well, for instance through mild-hybridisation (48v batteries), decreasing fuel consumption and emissions by 10-15% at a fraction of the price.
Overall, we must recognize that the initiative is missing part of the picture when it comes to battery markets. It is clear that the focus of this initiative is the development of advanced batteries for electric vehicles, with some limited attention on motive and stationary. The proposal is not, however, taking into account the existing battery markets, for instance the SLI (starting, lightning, ignition) market, which currently represent the most relevant market for battery makers and where Europe is a global leader. This has a consequence in terms of battery technologies: the proposal is focused only on present and next-generation lithium-ion batteries, including solid state, with little to no attention given to other technologies like lead, sodium and nickel. To really address the challenges of the battery market, the EBA should look at the entire picture, and not just part of it. Similar attention will have to be devoted to all battery technologies when it comes to defining research priorities for investments under Horizon Europe and other similar financing mechanisms.
EBA: a good step in the right direction, but there is work to do!
Overall, we can be glad that the European Commission reacted so promptly and decisively to an existing challenge with the launch EBA, even if more could be done, on market coverage above all. The initiative is ambitious, and indeed the challenges are quite remarkable. Other points not covered here, but which must also be address, include for instance the need of investments in research and development, work on standards and patents, develop skills and know-how. Despite the magnitude of the challenge, we believe that the European Battery Industry has the possibility to develop green batteries and compete with global competitors. It will not be an easy task, but it will have a key role in keeping value, jobs and growth in Europe and ensuring a smooth transition towards a decarbonized society.
EU Affairs Manager,
The ees International Magazine is specialized on the future-oriented market of electrical energy storage systems, not only from a technological-, but also a financial and application-oriented point-of-view. In cooperation with ees Global, the ees International Magazine informs the energy industry about current progress and the latest market innovations.
Contact: Xenia Zoller - zoller(at)ees-magazine.com