Self-Sufficiency Plans of the EU and the USA

Christine Nikander · 2023-04-07T12:45:41.978Z

Both the EU and USA have plans for becoming self-sufficient in critical raw materials and batteries. 🌱 Why are there currently concerns around tech imports from China? China has recently been considering whether to put into place an export ban to strengthen its own solar technology manufacturing. More specifically, the Ministry of Commerce and the Ministry of Science and Technology in China have started a public consultation phase on whether to place “some manufacturing methods key to producing advanced solar wafers on to its list of technologies it prohibits exporting”. (Solar wafers are the ultra-thin silicon squares that form the smaller units of solar panels.) Notably, China produces 97% of solar wafers globally. 🌱 What tech materials does China supply to the EU and USA? China currently provides 80% of the metal supply needed for high-end tech, including green energy solutions. The Xinjiang region in the north-west of China alone is the source of 40-45% of global solar-grade polysilicon. Moreover, “[t]he majority of the world’s supply [of rare earths] is mined in China”. Apart from being such a large producer of critical raw materials and batteries, China has also heavily invested in the mining of critical raw materials in foreign states. All in all, China “controls roughly 60% of the world’s mining production and 85% of the processing of the metals”. China also “produced about 70% of global electric vehicle (EV) batteries in 2021”. 🌱 Can the EU and USA become self-sufficient? According to Goldman Sachs, Europe and the USA may “achieve localization of downstream cell manufacturing between 2025 and 2027”. The EU’s Green Deal Industrial Plan and the U.S. Inflation Reduction Act both demonstrate the commitment to critical raw material and battery self-sufficiency, and they provide companies with incentives and subsidies to increase local production rates. Research on batteries that “require smaller amounts of critical minerals – such as lithium, cobalt and graphite” and increased recycling of battery materials will also play a role in reaching self-sufficiency. 🌱 What role do the recent discoveries in Sweden and Norway play? The recent discoveries in Sweden and Norway create the possibility of mining rare earths in Europe. As Norway’s deposits entail several minerals found on the European Commission’s list of critical minerals, Europe also has a potential to reduce its dependency on China for several other critical minerals. Thereby, the recent discoveries in Sweden and Norway could contribute to “self-sufficiency and independence from Russia and China”. Read more about energy security here: - https://www.bloomberg.com/news/articles/2023-01-26/china-mulls-protecting-solar-tech-dominance-with-export-ban - https://www.goldmansachs.com/insights/pages/the-us-and-europe-are-moving-toward-battery-self-sufficiency.html - https://theglobalherald.com/news/why-the-us-could-delay-the-end-of-europes-dependence-on-lithium-ion-batteries-from-china-dw-news/ - https://www.ft.com/content/d34dfd79-113c-4ac7-814b-a41086c922fa?shareType=nongift - https://www.bloomberg.com/news/articles/2022-11-11/china-has-links-to-dozens-of-canadian-miners-tied-to-critical-minerals Read more about the EU’s Green Deal Industrial Plan here: - https://ec.europa.eu/commission/presscorner/detail/en/IP_23_510 - https://www.reuters.com/business/sustainable-business/whats-eu-green-deal-industrial-plan-2023-02-01/ Read more about the U.S. Inflation Reduction Act here: - https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/19/fact-sheet-the-inflation-reduction-act-supports-workers-and-families/ - https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/ - https://www.irs.gov/inflation-reduction-act-of-2022