Our VP Arnaud Castaignet participated in the panel titled 'From Vision to Reality: Building the Greenest European Battery' at Latitude59 in Tallinn. During the discussion, panellists expressed concerns about Europe's heavy dependence on critical raw materials and batteries, called for using or developing alternatives to scarce materials, and addressed the EU's policy efforts falling short of the extensive measures taken by the US and China.
Arnaud Castaignet, our VP of Government Affairs & Strategic Partnerships, participated in the panel alongside Gary Urb, CEO and founder of UP Catalyst, and Jaanus Uiga, Deputy Secretary General in the Estonian Ministry of Climate, with Cate Lawrence from Tech.eu as the moderator.
Insights from Skeleton's VP Arnaud Castaignet
- Dependence on Asia
Right now, the European battery market is strongly dependent on Asian batteries and critical materials that are mostly mined or processed in China. Most of the batteries sold in Europe are bought from Asian suppliers, particularly from China.
Most of the batteries produced in Europe use nickel or cobalt, which Europe is highly dependent on, and is expected to face a supply shortage by 2030. The EU is currently over 80 percent import-dependent when it comes to cobalt, mostly from the Democratic Republic of Congo. There are not many European battery players in the market currently and the few that are, manufacture primarily Li-ion batteries that require these critical materials.
Asian companies are setting up more battery factories in Europe. Hungary, for instance, has become the second-largest battery producer in Europe due to the construction of massive gigafactories by CATL and other Chinese battery companies.
- US and China's Strategic Moves
The current state of European industry and its dependency on raw materials for clean tech and clean technologies is quite grim. In industries like solar and wind power, many European companies are being outcompeted by Chinese players.
EU funding schemes are often ineffective, and there is a lack of prioritization and resources on the European side. It’s important to note that both China and the US are currently reversing decades of free trade policies.
China heavily subsidizes production capacity and protects its economy and market. Similarly, the US is becoming increasingly protectionist. The Inflation Reduction Act (IRA) provides more than $600 billion in direct subsidies to boost clean technology manufacturing in the US. The IRA not only focuses on battery manufacturing and sales but also on sourcing critical materials domestically, leading to more processing being reshored to the US.
- Critical Oversights in EU Policies
At the same time, in Europe, the EU Critical Raw Materials Act focuses on setting up trade agreements with regions where these raw materials are found. While this open approach is necessary, a piece is missing in this strategy, as it does not aim to develop or use alternatives to these critical materials, and no new funding is dedicated to supporting alternatives that would reduce the need for these materials.
Europe also faces an important industrial gap. Investment is possible for early-stage startups or large corporations, but there is no support to bridge the scale-up gap, which currently prevents many European scale-ups from growing to an impactful size. When we look at the call for large-scale projects last year supported by the European Innovation Fund, 100% of the supported projects were from big corporations, not scale-ups or SMEs. For medium-sized projects, 80% of the support went to large corporations.
Catch the recording of the panel to learn more:
