E-mobility: Resource needs for batteries and the challenges for Europe

The extraction of raw materials for use in electric vehicle batteries is a contentious issue at present among supporters and opponents of e-mobility alike, with public attention focused on the associated social and environment issues and possible supply shortages. Taking lithium and cobalt in the focus, Dr Doris Schüler summarises the challenges currently facing the producing countries and looks at market trends and political developments in Europe.
(Note: This is the English translation of an interview with Dr Doris Schüler. For the original German interview please click here).

What sparked the current debate about battery minerals?

Road transport produces more than 20 per cent of the European Union’s greenhouse gas emissions, so this is where leverage urgently needs to be applied in order to achieve reductions. The EU has set a target of a minimum 60 per cent cut in transport-related carbon emissions from 1990 levels by 2050. Among other things, this will require a switch from combustion engines to electric motors. But that’s not all: the forthcoming bans on diesel in the transport sector will also be a driver of change. The rising demand for batteries and other e-vehicle components and the possibility of shortages and supply risks are also issues of concern to the general public. Lithium, cobalt, nickel, graphite and copper are the minerals of particular relevance here.

You’ve mentioned several minerals – so why is there such an intensive debate about lithium and cobalt?

The global transition to a fossil-free future will push up demand for a wide range of metals and minerals, albeit to varying degrees. What stands out, however, is the soaring demand for battery minerals for electric vehicles. And here, we see serious problems and risks to human rights and the environment in the extraction of resources, particularly lithium and cobalt for the lithium-ion battery supply chain. It is not acceptable to “green” our transport sector as a way of protecting the climate by causing social and environmental impacts in the mining countries. That’s why we are seeing an increase in media coverage and more intensive debate about this issue.

Concerns about supply shortages also feature prominently in this debate. The greatest supply risk exists in relation to cobalt, which is mainly extracted in the politically unstable Democratic Republic of the Congo, where a small number of corporations dominate production.

Let’s look at key components and batteries. How many vehicles and what kind of market volume are we talking about?

The International Energy Agency (IEA) forecasts that sales of electric vehicles in Europe could reach seven million in 2030, with hybrid vehicles (PHEV) with smaller batteries slightly below that figure, at six million. The European Battery Alliance (EBA), which was launched in October 2017, assumes that the European Union could capture a battery market of up to €250 billion a year from 2025 onwards, and that covering the EU demand alone would require at least 10 to 20 “gigafactories” – large-scale battery cell production facilities.

These are fairly precise forecasts which show the direction developments will take. So how will Europe respond to this high level of demand for batteries?

Currently, mass production of lithium-ion batteries is still concentrated outside Europe, with the world market dominated by Japanese, South Korean and Chinese companies. Meeting Europe’s ambitious target of capturing a significant share of global battery manufacturing will require a massive effort by European industry. Given the lightning speed of global technological development, European industry has two main challenges to overcome: securing a reliable supply of raw materials, and losing no time in building high-tech fabrication facilities that can compete with Asian industry.

At present, just two European consortia – Northvolt and TerraE – are attempting to start production in the next few years, in Sweden and Germany respectively. The EU’s Strategic Action Plan on Batteries, published in May 2018, aims to put Europe on a firm path towards leadership in this key industry. However, the Asian companies are well ahead at present.

Let’s stay with Europe and the goal of capturing a significant share of global battery production. How’s it looking for European mining in this context?

There needs to be a firm commitment to, and emphatic support for, the development of mineral deposits – particularly lithium, cobalt, nickel and graphite – within the European Union. Even so, minerals would still need to be imported in substantial quantities in order to meet the EU’s primary demand and ensure an adequate supply for existing and future refining capacities. As well as reducing Europe’s reliance on imports, mining within the EU would offer one major benefit: it would be carried out in compliance with responsible mining rules and practices. This would also be a good framework for the further development of advanced technologies and green tech by European companies, which could then be deployed to improve global mining standards.

Moving from primary production to the secondary cycle, what’s happening with battery recycling in Europe?

From an environmental perspective, any scheme which reduces demand for primary battery minerals should take precedence over extraction. And from an economic perspective, these schemes reduce the risk of supply shortages at the same time. But it is not only about recycling: major improvements in resource efficiency, combined with substitution – which means replacing critical with other, less critical resources – also have a key role to play in protecting the environment. Europe has a wealth of know-how and expertise in technology development that it can draw on in these three areas. Investing in research is an important lever here and requires a financial commitment not only from the European Union but also from its member states.

Used battery collection and recycling are essential in avoiding environmental pollution and other large-scale environmental problems and in establishing a circular economy. However, batteries have a fairly long useful life and will not be available for recycling in large numbers for around 10 years. Due to this delay, the commercial sector may well find it difficult to mobilise sufficient financial resources for research and development (R&D) of recycling over the short term. This gap should be closed by the European Union and national governments, which should support R&D by universities and other organisations in the interim.

The revision of the EU Battery Directive also offers an opportunity to set material-specific recycling targets. A binding target for lithium recycling would do much to support broad-scale recovery of this particular mineral. The EU should also establish an efficient takeback scheme in order to minimise wastage of recyclable batteries outside the European Union; the Waste Electrical and Electronic Equipment Directive is a useful model here. The scheme should be developed in cooperation with battery and vehicle manufacturers.

Technology development, environmental awareness and standards are comparatively well-advanced in Europe, it would seem. What are the greatest challenges currently facing the lithium producing countries?

Lithium extraction from salt lakes, mainly in Latin America, currently accounts for around 50 per cent of global production. The greatest challenge is achieving water and resource efficiency in the extraction process in order to minimise the negative impacts on nearby arid ecosystems in the Andes. Replacing conventional evaporation technology with advanced closed cycles drastically reduces water losses and substantially increases the lithium recovery rate. These technologies have already reached the pilot phase.

We recommend that the European Union support the development and application of technologies through partnerships with local companies and universities. This must include support for extensive environmental impact assessments and for local stakeholder and community engagement. Although the surge in demand is creating a degree of urgency, it is essential to allow enough time for these environmental impact assessments and consultations with stakeholder communities to be conducted. From our perspective, it would be helpful to set up an EU-Latin America working group, tasked with developing international guidelines on lithium extraction from salt lakes. The EU already has partnerships with Argentina and Chile that focus on raw materials, and they offer scope for cooperation on sustainable lithium extraction.

The debate about cobalt extraction mainly focuses on the social risks, specifically child labour. More than half of the world’s primary cobalt is sourced from the Democratic Republic of the Congo. Could you tell us about the situation in that country?

The political situation and weak governance make it difficult to implement social and environmental standards in the DRC’s extractive sector. Some of the cobalt sourced from the DRC (around 20 per cent) is produced by artisanal miners using simple non-industrial methods. Due to its informal nature, this segment of the extractive industry is often associated with child labour and poor working conditions.

Companies in industrialised countries are coming under public pressure to ensure that the cobalt they use is extracted without child labour or any other critical issues. That’s why a number of major producers are developing responsible procurement strategies, and various European and international initiatives have been set up with the same goal. There is a broad consensus that small-scale artisanal mining is a vital source of income for local communities, so sourcing cobalt solely from industrial mines is not a sustainable option. Instead, the aim is to improve local conditions for artisanal miners and their families and communities so that families no longer rely on child labour.

Many Western processing companies along the battery value chain are likely to take part in development projects in the Democratic Republic of the Congo over the next few years. This engagement is a key part of responsible procurement. However, it is important to avoid a situation in which a multitude of development projects exist in parallel with no overall coordination.

Coordinating the various international donors has always been a challenge in the context of development cooperation. This has now become an even more difficult task as a result of corporate engagement in the DRC, as many of the companies concerned are newcomers to this field. So it is incumbent on the European Union to coordinate this corporate engagement via the European Battery Alliance, the EU member states with a local presence, and their embassies. Drive Sustainability – a European automotive industry initiative – should take on a coordinating role for its members. And all the European stakeholders should involve the local authorities, the DRC’s central government and local civil society as well – that’s really important.

The interview was conducted by blog editor Alexa Hännicke.

 Dr Doris Schüler is an Oeko-Institut researcher specialising in sustainable resource management and is a project coordinator
for the Strategic Dialogue on Sustainable Raw Materials for Europe (STRADE).

Further information

The Oeko-Institut’s electromobility fact check – Frequently asked questions

Ensuring a Sustainable Supply of Raw Materials for Electric Vehicles“ by Agora Verkehrswende and the Oeko-Institut

Strategic Dialogue on Sustainable Raw Materials for Europe (STRADE)

STRADE Policy Brief 6/2018: “Social, economic and environmental challenges in primary lithium and cobalt sourcing for the rapidly increasing electric mobility sector”

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