EU battles €19 bln battery deficit with 14-nation critical minerals pact

The Critical Raw Materials Act (CRMA) and Net Zero Industry Act will spearhead the fight against growing clean tech trade deficits, including a €19 billion ($21.17 billion) deficit in the lithium-ion battery sector, according to the European Commission's State of the Energy Union 2024 report, released on September 11

The report details the EU’s efforts to secure critical raw materials through 14 strategic partnerships with non-member countries.

These partnerships aim to diversify the EU’s supply chain for materials essential to its clean energy transition and industrial competitiveness. Norway, Australia and Serbia were highlighted as new partnerships established in 2024.

According to the report, strategic partnerships have also been signed with Canada, Ukraine, Namibia, Kazakhstan, Argentina, Chile, the Democratic Republic of Congo, Zambia, Greenland, Rwanda and Uzbekistan, to date.

The report emphasizes the CRMA and the Net Zero Industry Act — which aims to scale up the manufacturing of clean technologies in the EU — as key pillars in the EU’s strategy to bolster supply chain resilience and foster domestic manufacturing of net-zero technologies.

These acts, which entered into force this year, stem from the Green Deal Industrial Plan. Presented in 2023 by the Commission, the plan creates a predictable and simplified regulatory environment to support scaling up the EU’s manufacturing capacity for net-zero technologies.

The State of the Energy Union report announcement comes as EU manufacturers face increasing challenges both internationally and domestically in the clean tech sector.

“Emissions are falling, and renewables play a prominent role in our energy system today,” Maroš Šefčovič, the European Commission’s executive vice president, said in an official statement. “We should swiftly implement the new policy and regulatory framework to address the elevated energy prices, and accelerate development of infrastructure.”

EU launches skills academies

According to the State of the Energy Union report, the EU faces significant trade deficits in crucial clean technologies. In 2023, despite having the highest production value at €21 billion, the lithium-ion battery sector recorded a €19 billion trade deficit, a 21% increase from the previous year. The solar photo-voltaic (PV) sector also faces a deficit, although it decreased by 13% compared with 2022.

To address these challenges, the EU has launched several initiatives:

  • The Strategic Technologies for Europe Platform (STEP) is contributing to the development and manufacturing of advanced clean technologies in the EU.
  • The Innovation Fund has been supporting clean-tech manufacturing rollouts since 2022, with dedicated budget envelopes in its annual calls.
  • European net-zero industry academies are being established to address skills gaps in sectors such as solar power, hydrogen and batteries; further academies in raw materials and wind power are planned.
  • Under the Net Zero Industry Act, the academies have either already been launched or are in the process of being established, in order todevelop learning content in the Member States.

Additionally, a UN-convened panel on critical energy transition minerals, launched in April 2024 and co-chaired by the Commission, aims to address issues related to human rights, equity, transparency, investment and sustainability in critical minerals supply chains.

These partnerships and initiatives form part of the EU’s strategy looking ahead to 2030. That said, the report does not provide specific projections on how these measures might affect global markets or prices for critical materials.

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