• Saturday, March 30, 2024
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Europe needs its own battery supply chain, Umicore CEO says

Europe needs its own battery supply chain, Umicore CEO says

Europe needs its own battery supply chain to meet the needs of carmakers as they shift towards electric cars, according to Umicore, the Belgium-based producer of battery materials.

Giant battery factories planned for Hungary, Poland and Germany need to be supplied with materials processed in Europe rather than Asia, Umicore’s chief executive Marc Grynberg said.

“Given the sheer size of the requirements to the European industry similar to what’s happening in Asia it makes most sense in my opinion to have a regional supply chain,” Mr Grynberg told the Financial Times.

Last year the European Commission said it will offer billions of euros of co-funding to companies willing to build giant battery factories on the continent. Over 80 per cent of the world’s existing and planned battery production is in Asia.

The world’s largest battery producers including Korea’s LG Chem, Samsung SDI and SK Innovation have all invested in battery factories in Poland and Hungary. Last month Mercedes-Benz owned Daimler also said it would build a factory in Poland.

China’s CATL, the world’s largest battery producer, said last year that it will build a factory in Germany.

Still, Europe is set to have far fewer battery factories than China by 2028, according to Benchmark Mineral Intelligence. Europe is expected to have nine plants producing 248 gigawatt hours of batteries, compared to 46 in China producing over 1,000 GWh worth of batteries, it forecasts.

In addition many of the raw materials needed for battery cells are processed in China. Last year China accounted for 66 per cent of global refined cobalt output, according to Darton Commodities.

To redress the balance Umicore is planning to build a plant in Nysa, Poland, to produce battery raw materials, Mr Grynberg said.

“There is a real battery hub emerging there,” he said.

In October Umicore signed an agreement with BMW and emerging Swedish battery producer Northvolt to develop a “complete and sustainable value chain” for electric car battery cells in Europe.

The European car industry needs to rely on recycled supplies of battery raw materials in the future, according to Mr Grynberg. Umicore is currently recycling battery materials from consumer electronics and “a few car batteries” but will be “investing for massive growth there” in the first part of the next decade, he said.

“Without recycling mass electrification will not work,” Mr Grynberg said.