Europe is in danger of becoming as reliant on China for batteries and fuel cells as it was on Russia for energy before Moscow’s invasion of Ukraine, according to a European Union report obtained by the Reuters news agency.

The paper will form the basis of a summit October 5 in Granada, Spain, on Europe’s economic and energy security.

The paper, prepared by the Spanish presidency of the European Union, said that because of the intermittent nature of renewable energy sources like solar or wind, Europe will need ways to store energy to reach its goal of net-zero carbon dioxide emissions by 2050.

“This will skyrocket our demand for lithium-ion batteries, fuel cells and electrolyzers, which is expected to multiply between 10 and 30 times in the coming years,” the report said.

“Without implementing strong measures, the European energy ecosystem could have a dependency on China by 2030 of a different nature but with a similar severity from the one it had on Russia before the invasion of Ukraine,” the report said.

China dependency

Europe already relies on China for battery technology, said Guido Cozzi, an economist at the University of St. Gallen in Switzerland.

“It is not too late, but I think they should act pretty fast, because China is moving very fast in this sector,” Cozzi told VOA. “They are the world champions, and they are also trying to consolidate their take on raw materials elsewhere – for example, in Africa.”

Cozzi added that the West should collaborate on battery technologies to prevent China’s domination of the market.

“The United States has a leading edge in technology anyway because it is the most innovative of all. And it is important that, I think, transatlantic cooperation is reinforced. Innovation has a scale effect, so the more the brains at work, the faster the flow of innovations,” Cozzi said.

Gigafactories

Europe is taking steps to develop its own battery ecosystem, such as the European Battery Alliance, which tries to stimulate investment, research and development.

In May, France opened its first electric car battery factory, a joint venture between European industrial giants Stellantis, TotalEnergies and Mercedes. French Finance Minister Bruno Le Maire underscored the challenge ahead.

“The aim is not for there to be only battery factories,” Le Maire said at a press conference following the opening of the factory. “We need to control the whole value chain. We’re first working on the critical materials that we need to produce more of, that we need to find more of. We cannot be totally dependent on Asia for the supply of critical materials. Then we need to recycle the batteries.”

African minerals

China is investing heavily in sourcing raw materials such as cobalt, lithium and manganese. Beijing opened a $300 million lithium processing plant in Zimbabwe in July.

The Democratic Republic of the Congo is renegotiating a deal that would see Beijing invest tens of billions of dollars in infrastructure in return for access to Kinshasa’s vast cobalt and copper reserves.

“Beijing is able to operate fully coordinated with state-owned enterprises, funders, so they provide funding, as well. They provide infrastructure and the whole package. So, this way they can move much faster than Europe,” Cozzi said, adding that the race for minerals in Africa, Asia and Latin America is also an opportunity for the West to counter Beijing’s influence.

“China operates in a very coordinated manner, but also in a way that doesn’t respect the environment, human rights and the future of these countries,” he said. “Providing good examples and facilitating their development in broad senses, including education, is super important for the future. We cannot leave this to China.”

EU investigation

Meanwhile, European Commission President Ursula von der Leyen announced a probe into Chinese subsidies for electric vehicle manufacturers, which are trying to make headway in the European market with significantly lower prices than those set by their EU competitors.

“The commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open to competition, but not for a race to the bottom. We must defend ourselves against unfair practices,” von der Leyen said September 13 in her state of the union address.

Beijing criticized the EU investigation.

“The measures taken by the EU violate the principles of market economy and the rules of international trade. The [move] is not conducive to the stability of the global supply chain in the automotive industry and is not in the interest of anyone, including the EU,” Mao Ning, a spokesperson for the Chinese foreign ministry, told reporters Wednesday.
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