Battery raw materials from Canada + Slov • Table.Briefings

Dear reader,

German Chancellor Olaf Scholz made grand statements in Toronto yesterday; Canada has “almost limitless potential to become a superpower in renewable energies and the sustainable extraction of raw materials,” he said during an appearance with Prime Minister Justin Trudeau. Shortly thereafter, Scholz and Economic Affairs Minister Robert Habeck signed an agreement with Canada on cooperation in the production and transport of hydrogen. The two countries also want to cooperate on raw materials for battery production because Germany’s automakers are massively dependent on imports of lithium, nickel, graphite, and cobalt, among other things, as Leonie Düngefeld and Markus Grabitz report.

Once before, the Czech Republic’s government fell apart while the country held the presidency of the EU Council. Will this horror story repeat itself? Czech head of government Petr Fiala may soon have to face a vote of no confidence in parliament. In Slovakia, which has close historical ties with the Czech Republic, there is also speculation that new elections will be held this year. Hans-Peter Siebenhaar analyzed the situation.

Russia’s war of aggression in Ukraine has accelerated necessary changes in Europe. Among other things, Jan Pie, Secretary General of the AeroSpace and Defence Industries Association of Europe, means that the fragmentation of defense production is being countered by stronger joint procurement in the EU – an overdue development. We present a profile of Jan Pie.

Your
Lisa-Martina Klein

VW and Mercedes: battery raw materials from Canada

Lithium, cobalt, nickel, graphite: All these raw materials are components of batteries for EVs – and Canada is a paradise from Germany’s point of view: “The country has similar rich mineral resources as Russia – with the difference that it is a reliable democracy,” said German Chancellor Olaf Scholz after he arrived in Montréal on Monday.

He was not just referring to LNG and hydrogen. Among his fellow travelers were Volkswagen CEO Herbert Diess and Mercedes Chief Development Officer Markus Schäfer. Both signed agreements in principle with the Canadian governments yesterday: They want to promote e-mobility and explore opportunities for cooperation with the Canadian automotive and battery supply chain.

In the presence of Chancellor Scholz and German Economic Affairs Minister Habeck, Diess and Schäfer each signed a “Memorandum of Understanding” with the Canadian Minister of Innovation, Science and Industry, François-Philippe Champagne. The companies and the Canadian government want to examine what contribution Canada can make to the global and regional battery supply chains of automakers. This involves the entire value chain: technical development, raw material extraction, production, service life, and recycling.

Both groups also emphasize their intention to invest in a clean and climate-friendly economy. “Mercedes-Benz is in the process of dramatically increasing EV production,” Markus Schäfer explained. “That’s why we are also looking at new ways to responsibly obtain the raw materials needed for this. Direct access to the producers of these materials is an important step on this path.” With Canada, Mercedes has a suitable partner “to usher in a new era of sustainable transformation in the automotive industry”.

Demand for batteries expected to increase 15-fold by 2030

“The supply of battery raw materials and the production of precursor and cathode materials with a low carbon footprint will enable a rapid and sustainable expansion of battery capacities,” VW CEO Diess said. “This is an important lever for our growth strategy in North America.”

With the market ramp-up of EVs, the demand for raw materials for batteries is increasing. A study by management consultants PWC on investment and raw material requirements states that global demand for the most important active battery materials will increase 15-fold from 0.4 million tons in 2021 to 6 million tons in 2030. This corresponds to an annual increase of 34 percent.

Europe is in a good position to build cell factories. In 2025, the cell factories located in Europe would even produce a surplus that could be exported to the USA. And the authors also assume that Europe will be able to cover its own demand for battery cells in 2030.

In terms of battery cell components, however, Europe is in a poor position, according to the PWC study. Less than one percent of active materials for e-batteries were produced in Europe in 2021, it said, while around one percent of active materials were processed here. The study concludes, “China’s footprint in the battery production value chain is strong.” China dominates 80 percent of it, it said.

Among the five active materials, Europe had no share at all in the processing of lithium, nickel, and graphite. For cobalt, the figure is 18 percent, and for manganese, four percent. The study points out how much the industry needs to catch up to reduce dependencies – after all, Europe will build around 30 percent of the EVs produced globally in 2030.

VW and Mercedes have entered cell production

The German manufacturers are pursuing different strategies to achieve this. BMW is – once again – taking a special path. The Bavarians are the only German manufacturer not to have invested in their own battery cell production. Instead, the group maintains a prototype factory in the Parsdorf district of Munich. Here, BMW engineers keep abreast of the latest developments in cell chemistry to stay technologically up to date.

The goal is to acquire the expertise to select the best supplier and give him specifications for production and configuration. This saves the company from investing billions in its own cell factories. But it also does not directly influence whether the raw materials for cell production are hedged against the numerous geopolitical risks.

VW and Mercedes are taking a different path. Later than Tesla, but still: Both groups have also entered the production of battery cells in recent years and entered into partnerships with pioneers and established battery manufacturers.

VW plans to build six gigafactories with partners in Europe by 2030, providing an annual capacity of 240 gigawatt hours. Mercedes is participating in the construction of eight factories worldwide, representing a capacity of 200 gigawatt hours.

VW has also established the battery company PowerCo, which is to bundle all of the group’s global activities along the battery supply chain. PowerCo is now to drive forward cooperation with Canada – as well as in the entire North America region. VW is also examining possible locations there for its own gigafactory for battery cells.

Corporations want to save and recycle raw materials

To secure the materials they need, both companies are pursuing a strategy of vertical supply chain integration. For example, VW has launched a cooperation with Umicore, a manufacturer of materials. The joint venture is to supply the Gigafactory in Salzgitter with materials. It is supposed “to jointly build production capacities for precursor and cathode materials in Europe and to sustainably secure raw material capacities from responsible sources at competitive prices”.

VW has also acquired a stake in the US start-up 24 M. New production methods are to help save materials. VW also has a contract with Vulcan Energy, a German company in the Upper Rhine Graben, which will supply VW with CO2-neutral lithium from 2026.

Mercedes says: “We want to diversify our raw material sourcing, strengthen the resilience of our supply chains and reduce dependencies.” It says it is working on resource-efficient production methods that reduce the use of critical materials. “For example, the cobalt content in the cathodes of the EQS battery cells is less than ten percent and has been significantly reduced compared to the previous generation of batteries,” the group says.

To recover raw materials, Mercedes is currently building a CO2-neutral recycling plant in Kuppenheim in southern Germany. Mercedes explains, “China has large refining capacities for rare raw materials”.

Mercedes also purchases rare earths from China. However, the company has reached agreements with its direct suppliers. They stipulate that there must be two suppliers for each of the rare earths (neodymium, terbium, dysprosium), located in different regions. Markus Grabitz and Leonie Düngefeld, with rtr

Pro-European governments in Prague and Bratislava under pressure

By

Hans-Peter Siebenhaar

The Czech Republic and Slovakia still see themselves as a political tandem. Their common history in the former Czechoslovakia unites them in foreign policy to this day. The heads of government of the two countries have therefore commemorated the 54th anniversary of the invasion of the then Soviet Union in a joint message.

They took the opportunity to express their unanimous position on today’s Russia in the light of the attack on Ukraine. “Our active support for Ukraine is particularly important as the horrors of war and the suffering of civilians are literally on our doorstep,” Slovak Prime Minister Eduard Heger said in a video message.

“We don’t want Russia to be our neighbor.” Almost three decades ago, the common state of Czechoslovakia was peacefully dissolved and the Czech Republic and the Slovak Republic were founded. At times, however, there is also involuntary common ground between Prague and Bratislava. This is because both governing coalitions are under political pressure.

In Slovakia, the government is threatening to break apart at the end of the month. The governing Freedom and Solidarity (SaS) party had already set a summer deadline for Finance Minister Igor Matovič (OĽaNO): Either he resigns by the end of the month or the government coalition bursts with the departure of the SaS.

Slovakia: threat of minority government

Former prime minister and leader of the OĽaNO (Ordinary People and Independent Personalities) party Matovič is controversial. Last spring, he was forced to cede the post of head of government to former Finance Minister Eduard Heger. Matovič has pushed through a number of laws, including his controversial fiscal package against high inflation, with the support of right-wing extremists in parliament.

If the SaS makes good on its threats at the end of August, Slovakia will face the threat of a minority government. How long such a coalition will last without a majority in parliament is anyone’s guess. There is already speculation in Bratislava about new elections this year. This could benefit the left-wing populist opposition SMER. In addition, former Prime Minister Robert Fico would be a politician with a proven track record. A comeback by Fico, however, would be a crucial test for the EU country.

This is because a number of SMER politicians are the subject of investigations and trials for corruption and other offenses. Slovakia has always made headlines in recent years because of its mafia-like economic structures. The country is ranked 56th in Transparency International’s global corruption index – behind Rwanda, Saudi Arabia, and Oman.

Government overthrow still in memory

In the Czech Republic, Czech head of government Petr Fiala may soon have to face a vote of no confidence in parliament. His opponent, former prime minister and multi-billionaire Andrej Babiš, is threatening to take such a step. Much criticized for misuse of EU funds, Babiš most recently demanded in an open letter that Interior Minister Vít Rakušan be expelled for incompetence and alleged proven ties to mafia structures. The 42-year-old politician, who speaks fluent German, is also deputy prime minister.

Given the clear majority, the vote of no confidence will not unhinge the government in Prague. But the process is crippling for the liberal-conservative Prime Minister Fiala. After all, the Czech Republic holds the EU presidency until the end of the year. Veteran European politicians recall with horror the Czech Republic’s last EU presidency. In 2009, the government under conservative Prime Minister Mirek Topolánek (ODS) fell and an interim government took over.

Fiala is still holding on to his interior minister. But the pressure will not let up. Babiš will make sure of that. After all, the former prime minister, who is critical of Europe, will want to make his mark on the political stage. He has two reasons for this. First, the founder of the populist ANO party wants to replace the incumbent Miloš Zeman as president of Prague Castle and is therefore in a permanent election campaign. In October, Babiš will decide on his candidacy for the highest office of state. Second, attack is still the best defense for Babiš in the face of corruption allegations.

Babiš under suspicion of fraud

New investigations are underway in France against the probable presidential candidate for money laundering and tax evasion. This involves 16 properties worth around €15 million. He has already been under indictment since March for fraud involving EU subsidies for his luxurious “Stork’s Nest” conference hotel near Prague.

Meanwhile, the head of government Fiala is showing determination. His government is considering introducing an excess profits tax at the beginning of next year for companies that profit more than average from the Ukraine war. “I am open to such a debate,” the prime minister told the CTK agency. In particular, the prime minister has his eye on the energy and petroleum sectors, as well as banks. Foreign banks such as Austria’s Erste Group or the partly state-owned energy group CEZ would be affected. Corporate tax in the Czech Republic is generally 19 percent. The coalition in Prague plans to make a decision in mid-September.

Orbán promises more transparency

Hungary has offered to change laws criticized by the EU Commission to eliminate rule of law abuses in the country. The government has already submitted part of these legislative changes to Brussels and promised further legislative changes if an agreement is reached with the Commission in the ongoing conditionality procedure, said Prime Minister Viktor Orbán’s chief of staff, Gergely Gulyas. He said this would give Hungary a “stricter and more transparent system than ever before” for the use of EU funds and public contracts.

The Commission had initiated proceedings under the new conditionality mechanism for the first time in April. The Brussels-based authority could freeze the disbursement of billions from the EU budget if Budapest does not take more vigorous action against corruption and nepotism in the use of the funds. Budget Commissioner Johannes Hahn had asked the government on July 20 to propose further measures within a month. On Monday evening, the reply from Budapest arrived in Brussels shortly before the deadline.

The Commission said that the measures offered must first be thoroughly examined before they can be evaluated. For its part, the authority now has one month to do so. It could then recommend to the other member states that they withhold a certain portion of the EU funds actually earmarked for Hungary. A qualified majority in the Council would suffice for this. The hurdle is thus far lower than in the rule-of-law procedure under Article seven of the EU Treaty, which has so far proven to be less effective.

The procedure for releasing the billions from the EU reconstruction fund to which Hungary is actually entitled is formally separate. However, the shortcomings criticized by the Commission here are the same as in the conditionality procedure. In view of the economic turbulence, Orbán is therefore under considerable pressure to make concessions to receive the urgently needed billions in funds. The negotiations with Brussels are being led in particular by former EU Education Commissioner Tibor Navracsics, now Minister for Regional Development. tho

Drought causes crop failures across Europe

This year’s drought in Europe is the worst in at least 500 years, according to a report by the EU Commission’s Joint Research Centre (JRC). Nearly two-thirds of Europe’s land area is still in a critical condition, it said. Forty-seven percent of the land has less precipitation than usual, resulting in deficient soil moisture. According to the researchers, 17 percent of Europe’s surface area is even in a state of “alarm”. The drought threatens vegetation and crops.

Water shortages and heat would also cause crop yields to be lower, according to a supplementary report on agricultural resources in the EU. Yield forecasts for grain corn, soybeans, and sunflowers are 16 percent, 15 percent, and 12 percent below the 5-year average, respectively.

According to the German Farmers’ Association, German farmers had harvested a slightly larger grain crop. However, they continue to see a tight situation and high prices in the supermarkets. According to preliminary estimates, 43 million tons of grain were harvested, two percent more than in the previous year. However, the harvest volume was again below the average of recent years. The middle of Germany, in particular, was hit by drought damage due to long dry spells, and in some cases, grass as animal feed is in short supply. For many farms, high costs are putting pressure on business.

According to the EU Commission, the precipitation deficit has also affected hydropower generation and power plant cooling systems, as well as river traffic. Final data on the actual impact of the drought is expected after the end of the drought season. However, experts expect the preliminary estimates to be confirmed. luk/dpa

Study: 64 percent renewables by 2030 to meet Paris targets

The potential of renewable energies in the G20 countries exceeds the current energy demand. It is therefore possible to completely replace fossil energy sources with renewables in the 20 largest industrialized countries by 2050. This is the result of a study published today by the F20 Foundation Platform and the University of Technology Sydney.

To stay on track for the Paris climate targets, the G20 would need to get 64 percent of their primary energy from renewable sources, the study says. The study takes the countries’ theoretical potential for wind and solar power generation as the basis for setting expansion targets. According to the study, two percent of the G20’s area that can be used for renewable energy generation would be enough to cover global energy consumption. In the 27 EU countries alone, 34,403 GW of solar energy and 6,708 GW of wind energy are possible.

Based on this theoretical assumption of generation capacity, the authors call on Brazil (74.9 percent), Saudi Arabia (67.2 percent), and China (66.5 percent), in particular, to increase the share of their energy generation from renewables by 2030. Accordingly, the 27 EU countries would have to achieve 54.6 percent renewable primary energy. In 2040, more than 90 percent would be needed to finally reach 100 percent in 2050.

G20 countries’ special responsibility

The G20 would have to achieve a 71 percent share of renewables in electricity generation and 57 percent in heating by 2030 to keep the 1.5 degree target within reach. According to the study, the greatest need to catch up is in energy supply for the transport sector. In 2019, only 5 percent of energy consumption was covered by renewables, it said. By 2030, the share in the 20 largest industrialized nations would have to rise to 62 percent.

The focus on the G20 countries stems from the group’s special responsibility in climate protection, according to the foundation platform. The G20 is responsible for around 80 percent of global energy-related CO2 emissions and has committed itself to decarbonizing the economy and combating climate change by ratifying the Paris Climate Agreement. However, the national strategies for expanding renewables and reducing emissions have so far been inadequate. luk

Norway wants to maintain high natural gas production until 2030

Norway has held out the prospect of natural gas production at the current, record-high level until the end of the decade. The current production level should be able to be maintained until 2030, Energy Minister Terje Aasland told Reuters news agency on Tuesday. He said there were “projects and plans for development and operation that can help maintain the high gas levels in the future”. In light of an agreement signed with the EU in June, he said he was also confident about the long-term demand for Norwegian natural gas in Europe.

Aasland rejected considerations of an excess profits tax for energy companies. Such discussions were not taking place, he told Reuters. “The additional revenue companies are potentially making now is forming the basis for future investments and the basis for the entire transformation of the energy sector.”

According to estimates from May, Norway is expected to produce about 122 billion cubic meters (bcm) of natural gas this year. This would be eight percent more than in 2021 and possibly a new record. The non-EU country has now overtaken Russia as Europe’s largest supplier of natural gas, according to data from Refinitiv Eikon. The country’s largest oil and natural gas producer, Equinor, is majority state-owned. The group has announced plans to increase investments in renewable energy. However, given the demand in Europe for fossil fuels from Norway, its development is also to be pushed forward. rtr

Poland’s president calls for removal of Nord Stream 2

Polish President Andrzej Duda has called for the elimination of the fallow Nord Stream 2 Baltic Sea gas pipeline between Russia and Germany in Kyiv. Because of Russia’s war of aggression against Ukraine, there can be no return to normality in relations with Moscow, Duda said Tuesday at the online consultations of the so-called Crimea Platform. Therefore, a different policy of the West is needed, “which will lead not only to stopping Nord Stream 2, but to eliminating Nord Stream 2,” Duda said, according to Polish agency PAP.

For years, Poland and other eastern EU countries have criticized the Russian-German project for undermining gas transit through Ukraine. Because of the looming Russian attack at the time, the German government refused to put the pipeline into operation in February. But there are voices in Germany calling for Nord Stream 2 to be opened.

At the Crimea Platform, Ukraine is mobilizing international assistance to bring home the Crimean peninsula annexed by Russia in 2014. “Crimea was and is as much a part of Ukraine as Gdansk or Lublin is a part of Poland, as Nice is a part of France, Cologne is a part of Germany and Rotterdam is a part of the Netherlands,” Duda said. Turkish President Recep Tayyip Erdoğan, whose country has good relations with Russia, also said, according to reports in Kyiv, that Crimea clearly belonged to Ukraine under international law. dpa

Director General of DG CLIMA Mauro Petriccione deceased

Mauro Petriccione, Director General of Directorate General CLIMA since 2018, died unexpectedly on Tuesday, European Commission President Ursula von der Leyen announced. He died of a heart attack.

Over the past four years, he had headed a Directorate General that is becoming increasingly important – especially within an institution that had previously tended to favor the Directorate General for Energy (DG ENER) regarding climate and energy issues. A heavy workload for the 59-year-old Italian.

The launch of the EU Green Deal in 2019 contributed to the boost of this DG, as DG CLIMA takes the lead in developing cost-effective policies and legislation in line with the European Green Deal and facilitates their implementation. At the international level, the Commission’s DG CLIMA is responsible for EU climate policy and leads international climate negotiations for the EU.

Petriccione graduated in law from the University of Bari in 1982 and later earned a master’s degree from the London School of Economics. He joined the Commission in 1987 and was in charge of the trade sector from 2004 to 2014.

“It is with deep sorrow that I learnt of the passing of Mauro Petriccione, our Director General for Climate Action. Mauro was a dear, respected colleague. His work earned him respect and friendships in Europe and beyond My thoughts are with his family & friends in these sad times,” wrote EU Commission President Ursula von der Leyen on Twitter. cst

Jan Pie – defense expert in Brussels

Jan Pie is Secretary General of the AeroSpace and Defence Industries Association of Europe.

When Jan Pie looks out of his Brussels office window, he sees a Swedish submarine. It is Saab’s A-26, which specializes in stealth missions in the particularly shallow Baltic Sea, explains the secretary general of the AeroSpace and Defence Industries Association of Europe (ASD). Fortunately, it is only a model on the windowsill. He occasionally receives such gifts from ASD members and likes to keep them, he says.

Pie, a Helsinki-born Swede, heads an organization that has 20 major European companies and 21 national associations with headquarters in 17 countries. The last three years have been tough, he says. The pandemic has caused chaos in aviation. Now, huge orders are coming in to defense companies as European governments are suddenly massively increasing their defense spending. “They say they want 200 vehicles, and the next day they want 400 vehicles. Where is this additional production capacity going to come from?”

Still, and despite all the human suffering, he is convinced that Russia’s invasion of Ukraine has accelerated needed changes in Europe. “Europe has had a significant investment gap for a long time,” he says. “What is happening now is just a catalyst for something that needs to be done anyway.”

Good relations between EU and defense industry

In the almost ten years he has been with ASD, the European defense landscape has changed significantly. That the fragmentation of defense production must be overcome through greater joint procurement in the EU has now become an accepted view. The European Defense Fund was a turning point. Moreover, relations between the EU institutions and industry are now closer, which he welcomes. Now the Commission is approaching industry representatives to get their views.

Pie came to ASD from the Swedish Security and Defense Industry Association. Before that, he worked for 15 years at SOS Alarm, a company specializing in emergency call centers. By training, however, he is a life insurance specialist. So, in a roundabout way, he ended up in the military industry. “Personally, I’ve never had a problem working for the defense industry. Overall, it’s an important prerequisite for us to be able to defend open and democratic societies.”

His goal: better communication

However, there are also cases of weapons falling into the wrong hands. “When I read about it, of course, I am personally affected. I think it’s a disaster and we should all have mechanisms in place to make sure that doesn’t happen.” However, ASD as an organization is not doing anything concrete about it, he concedes. Export licenses, after all, are subject to government control.

According to Pie, most EU governments supported arms exports because they allowed local defense companies to maintain their production capacity after the end of the Cold War. That could change in the next few years. Still, Pie doesn’t see an EU army looming on the horizon. “But I would like to see a lot more consolidation on the demand side of the EU defense industry.”

In the coming years, Pie wants to make sure ASD communicates better. “Both the aerospace and defense sectors struggle with public perception,” he says. “One is the polluter, the other sells weapons that end up in the wrong hands.” The ASD needs to “be out there, discussing and being transparent about what we’re doing”. Ella Joyner

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

German Chancellor Olaf Scholz made grand statements in Toronto yesterday; Canada has “almost limitless potential to become a superpower in renewable energies and the sustainable extraction of raw materials,” he said during an appearance with Prime Minister Justin Trudeau. Shortly thereafter, Scholz and Economic Affairs Minister Robert Habeck signed an agreement with Canada on cooperation in the production and transport of hydrogen. The two countries also want to cooperate on raw materials for battery production because Germany’s automakers are massively dependent on imports of lithium, nickel, graphite, and cobalt, among other things, as Leonie Düngefeld and Markus Grabitz report.

Once before, the Czech Republic’s government fell apart while the country held the presidency of the EU Council. Will this horror story repeat itself? Czech head of government Petr Fiala may soon have to face a vote of no confidence in parliament. In Slovakia, which has close historical ties with the Czech Republic, there is also speculation that new elections will be held this year. Hans-Peter Siebenhaar analyzed the situation.

Russia’s war of aggression in Ukraine has accelerated necessary changes in Europe. Among other things, Jan Pie, Secretary General of the AeroSpace and Defence Industries Association of Europe, means that the fragmentation of defense production is being countered by stronger joint procurement in the EU – an overdue development. We present a profile of Jan Pie.

Your
Lisa-Martina Klein

VW and Mercedes: battery raw materials from Canada

Lithium, cobalt, nickel, graphite: All these raw materials are components of batteries for EVs – and Canada is a paradise from Germany’s point of view: “The country has similar rich mineral resources as Russia – with the difference that it is a reliable democracy,” said German Chancellor Olaf Scholz after he arrived in Montréal on Monday.

He was not just referring to LNG and hydrogen. Among his fellow travelers were Volkswagen CEO Herbert Diess and Mercedes Chief Development Officer Markus Schäfer. Both signed agreements in principle with the Canadian governments yesterday: They want to promote e-mobility and explore opportunities for cooperation with the Canadian automotive and battery supply chain.

In the presence of Chancellor Scholz and German Economic Affairs Minister Habeck, Diess and Schäfer each signed a “Memorandum of Understanding” with the Canadian Minister of Innovation, Science and Industry, François-Philippe Champagne. The companies and the Canadian government want to examine what contribution Canada can make to the global and regional battery supply chains of automakers. This involves the entire value chain: technical development, raw material extraction, production, service life, and recycling.

Both groups also emphasize their intention to invest in a clean and climate-friendly economy. “Mercedes-Benz is in the process of dramatically increasing EV production,” Markus Schäfer explained. “That’s why we are also looking at new ways to responsibly obtain the raw materials needed for this. Direct access to the producers of these materials is an important step on this path.” With Canada, Mercedes has a suitable partner “to usher in a new era of sustainable transformation in the automotive industry”.

Demand for batteries expected to increase 15-fold by 2030

“The supply of battery raw materials and the production of precursor and cathode materials with a low carbon footprint will enable a rapid and sustainable expansion of battery capacities,” VW CEO Diess said. “This is an important lever for our growth strategy in North America.”

With the market ramp-up of EVs, the demand for raw materials for batteries is increasing. A study by management consultants PWC on investment and raw material requirements states that global demand for the most important active battery materials will increase 15-fold from 0.4 million tons in 2021 to 6 million tons in 2030. This corresponds to an annual increase of 34 percent.

Europe is in a good position to build cell factories. In 2025, the cell factories located in Europe would even produce a surplus that could be exported to the USA. And the authors also assume that Europe will be able to cover its own demand for battery cells in 2030.

In terms of battery cell components, however, Europe is in a poor position, according to the PWC study. Less than one percent of active materials for e-batteries were produced in Europe in 2021, it said, while around one percent of active materials were processed here. The study concludes, “China’s footprint in the battery production value chain is strong.” China dominates 80 percent of it, it said.

Among the five active materials, Europe had no share at all in the processing of lithium, nickel, and graphite. For cobalt, the figure is 18 percent, and for manganese, four percent. The study points out how much the industry needs to catch up to reduce dependencies – after all, Europe will build around 30 percent of the EVs produced globally in 2030.

VW and Mercedes have entered cell production

The German manufacturers are pursuing different strategies to achieve this. BMW is – once again – taking a special path. The Bavarians are the only German manufacturer not to have invested in their own battery cell production. Instead, the group maintains a prototype factory in the Parsdorf district of Munich. Here, BMW engineers keep abreast of the latest developments in cell chemistry to stay technologically up to date.

The goal is to acquire the expertise to select the best supplier and give him specifications for production and configuration. This saves the company from investing billions in its own cell factories. But it also does not directly influence whether the raw materials for cell production are hedged against the numerous geopolitical risks.

VW and Mercedes are taking a different path. Later than Tesla, but still: Both groups have also entered the production of battery cells in recent years and entered into partnerships with pioneers and established battery manufacturers.

VW plans to build six gigafactories with partners in Europe by 2030, providing an annual capacity of 240 gigawatt hours. Mercedes is participating in the construction of eight factories worldwide, representing a capacity of 200 gigawatt hours.

VW has also established the battery company PowerCo, which is to bundle all of the group’s global activities along the battery supply chain. PowerCo is now to drive forward cooperation with Canada – as well as in the entire North America region. VW is also examining possible locations there for its own gigafactory for battery cells.

Corporations want to save and recycle raw materials

To secure the materials they need, both companies are pursuing a strategy of vertical supply chain integration. For example, VW has launched a cooperation with Umicore, a manufacturer of materials. The joint venture is to supply the Gigafactory in Salzgitter with materials. It is supposed “to jointly build production capacities for precursor and cathode materials in Europe and to sustainably secure raw material capacities from responsible sources at competitive prices”.

VW has also acquired a stake in the US start-up 24 M. New production methods are to help save materials. VW also has a contract with Vulcan Energy, a German company in the Upper Rhine Graben, which will supply VW with CO2-neutral lithium from 2026.

Mercedes says: “We want to diversify our raw material sourcing, strengthen the resilience of our supply chains and reduce dependencies.” It says it is working on resource-efficient production methods that reduce the use of critical materials. “For example, the cobalt content in the cathodes of the EQS battery cells is less than ten percent and has been significantly reduced compared to the previous generation of batteries,” the group says.

To recover raw materials, Mercedes is currently building a CO2-neutral recycling plant in Kuppenheim in southern Germany. Mercedes explains, “China has large refining capacities for rare raw materials”.

Mercedes also purchases rare earths from China. However, the company has reached agreements with its direct suppliers. They stipulate that there must be two suppliers for each of the rare earths (neodymium, terbium, dysprosium), located in different regions. Markus Grabitz and Leonie Düngefeld, with rtr

Pro-European governments in Prague and Bratislava under pressure

By

Hans-Peter Siebenhaar

The Czech Republic and Slovakia still see themselves as a political tandem. Their common history in the former Czechoslovakia unites them in foreign policy to this day. The heads of government of the two countries have therefore commemorated the 54th anniversary of the invasion of the then Soviet Union in a joint message.

They took the opportunity to express their unanimous position on today’s Russia in the light of the attack on Ukraine. “Our active support for Ukraine is particularly important as the horrors of war and the suffering of civilians are literally on our doorstep,” Slovak Prime Minister Eduard Heger said in a video message.

“We don’t want Russia to be our neighbor.” Almost three decades ago, the common state of Czechoslovakia was peacefully dissolved and the Czech Republic and the Slovak Republic were founded. At times, however, there is also involuntary common ground between Prague and Bratislava. This is because both governing coalitions are under political pressure.

In Slovakia, the government is threatening to break apart at the end of the month. The governing Freedom and Solidarity (SaS) party had already set a summer deadline for Finance Minister Igor Matovič (OĽaNO): Either he resigns by the end of the month or the government coalition bursts with the departure of the SaS.

Slovakia: threat of minority government

Former prime minister and leader of the OĽaNO (Ordinary People and Independent Personalities) party Matovič is controversial. Last spring, he was forced to cede the post of head of government to former Finance Minister Eduard Heger. Matovič has pushed through a number of laws, including his controversial fiscal package against high inflation, with the support of right-wing extremists in parliament.

If the SaS makes good on its threats at the end of August, Slovakia will face the threat of a minority government. How long such a coalition will last without a majority in parliament is anyone’s guess. There is already speculation in Bratislava about new elections this year. This could benefit the left-wing populist opposition SMER. In addition, former Prime Minister Robert Fico would be a politician with a proven track record. A comeback by Fico, however, would be a crucial test for the EU country.

This is because a number of SMER politicians are the subject of investigations and trials for corruption and other offenses. Slovakia has always made headlines in recent years because of its mafia-like economic structures. The country is ranked 56th in Transparency International’s global corruption index – behind Rwanda, Saudi Arabia, and Oman.

Government overthrow still in memory

In the Czech Republic, Czech head of government Petr Fiala may soon have to face a vote of no confidence in parliament. His opponent, former prime minister and multi-billionaire Andrej Babiš, is threatening to take such a step. Much criticized for misuse of EU funds, Babiš most recently demanded in an open letter that Interior Minister Vít Rakušan be expelled for incompetence and alleged proven ties to mafia structures. The 42-year-old politician, who speaks fluent German, is also deputy prime minister.

Given the clear majority, the vote of no confidence will not unhinge the government in Prague. But the process is crippling for the liberal-conservative Prime Minister Fiala. After all, the Czech Republic holds the EU presidency until the end of the year. Veteran European politicians recall with horror the Czech Republic’s last EU presidency. In 2009, the government under conservative Prime Minister Mirek Topolánek (ODS) fell and an interim government took over.

Fiala is still holding on to his interior minister. But the pressure will not let up. Babiš will make sure of that. After all, the former prime minister, who is critical of Europe, will want to make his mark on the political stage. He has two reasons for this. First, the founder of the populist ANO party wants to replace the incumbent Miloš Zeman as president of Prague Castle and is therefore in a permanent election campaign. In October, Babiš will decide on his candidacy for the highest office of state. Second, attack is still the best defense for Babiš in the face of corruption allegations.

Babiš under suspicion of fraud

New investigations are underway in France against the probable presidential candidate for money laundering and tax evasion. This involves 16 properties worth around €15 million. He has already been under indictment since March for fraud involving EU subsidies for his luxurious “Stork’s Nest” conference hotel near Prague.

Meanwhile, the head of government Fiala is showing determination. His government is considering introducing an excess profits tax at the beginning of next year for companies that profit more than average from the Ukraine war. “I am open to such a debate,” the prime minister told the CTK agency. In particular, the prime minister has his eye on the energy and petroleum sectors, as well as banks. Foreign banks such as Austria’s Erste Group or the partly state-owned energy group CEZ would be affected. Corporate tax in the Czech Republic is generally 19 percent. The coalition in Prague plans to make a decision in mid-September.

Orbán promises more transparency

Hungary has offered to change laws criticized by the EU Commission to eliminate rule of law abuses in the country. The government has already submitted part of these legislative changes to Brussels and promised further legislative changes if an agreement is reached with the Commission in the ongoing conditionality procedure, said Prime Minister Viktor Orbán’s chief of staff, Gergely Gulyas. He said this would give Hungary a “stricter and more transparent system than ever before” for the use of EU funds and public contracts.

The Commission had initiated proceedings under the new conditionality mechanism for the first time in April. The Brussels-based authority could freeze the disbursement of billions from the EU budget if Budapest does not take more vigorous action against corruption and nepotism in the use of the funds. Budget Commissioner Johannes Hahn had asked the government on July 20 to propose further measures within a month. On Monday evening, the reply from Budapest arrived in Brussels shortly before the deadline.

The Commission said that the measures offered must first be thoroughly examined before they can be evaluated. For its part, the authority now has one month to do so. It could then recommend to the other member states that they withhold a certain portion of the EU funds actually earmarked for Hungary. A qualified majority in the Council would suffice for this. The hurdle is thus far lower than in the rule-of-law procedure under Article seven of the EU Treaty, which has so far proven to be less effective.

The procedure for releasing the billions from the EU reconstruction fund to which Hungary is actually entitled is formally separate. However, the shortcomings criticized by the Commission here are the same as in the conditionality procedure. In view of the economic turbulence, Orbán is therefore under considerable pressure to make concessions to receive the urgently needed billions in funds. The negotiations with Brussels are being led in particular by former EU Education Commissioner Tibor Navracsics, now Minister for Regional Development. tho

Drought causes crop failures across Europe

This year’s drought in Europe is the worst in at least 500 years, according to a report by the EU Commission’s Joint Research Centre (JRC). Nearly two-thirds of Europe’s land area is still in a critical condition, it said. Forty-seven percent of the land has less precipitation than usual, resulting in deficient soil moisture. According to the researchers, 17 percent of Europe’s surface area is even in a state of “alarm”. The drought threatens vegetation and crops.

Water shortages and heat would also cause crop yields to be lower, according to a supplementary report on agricultural resources in the EU. Yield forecasts for grain corn, soybeans, and sunflowers are 16 percent, 15 percent, and 12 percent below the 5-year average, respectively.

According to the German Farmers’ Association, German farmers had harvested a slightly larger grain crop. However, they continue to see a tight situation and high prices in the supermarkets. According to preliminary estimates, 43 million tons of grain were harvested, two percent more than in the previous year. However, the harvest volume was again below the average of recent years. The middle of Germany, in particular, was hit by drought damage due to long dry spells, and in some cases, grass as animal feed is in short supply. For many farms, high costs are putting pressure on business.

According to the EU Commission, the precipitation deficit has also affected hydropower generation and power plant cooling systems, as well as river traffic. Final data on the actual impact of the drought is expected after the end of the drought season. However, experts expect the preliminary estimates to be confirmed. luk/dpa

Study: 64 percent renewables by 2030 to meet Paris targets

The potential of renewable energies in the G20 countries exceeds the current energy demand. It is therefore possible to completely replace fossil energy sources with renewables in the 20 largest industrialized countries by 2050. This is the result of a study published today by the F20 Foundation Platform and the University of Technology Sydney.

To stay on track for the Paris climate targets, the G20 would need to get 64 percent of their primary energy from renewable sources, the study says. The study takes the countries’ theoretical potential for wind and solar power generation as the basis for setting expansion targets. According to the study, two percent of the G20’s area that can be used for renewable energy generation would be enough to cover global energy consumption. In the 27 EU countries alone, 34,403 GW of solar energy and 6,708 GW of wind energy are possible.

Based on this theoretical assumption of generation capacity, the authors call on Brazil (74.9 percent), Saudi Arabia (67.2 percent), and China (66.5 percent), in particular, to increase the share of their energy generation from renewables by 2030. Accordingly, the 27 EU countries would have to achieve 54.6 percent renewable primary energy. In 2040, more than 90 percent would be needed to finally reach 100 percent in 2050.

G20 countries’ special responsibility

The G20 would have to achieve a 71 percent share of renewables in electricity generation and 57 percent in heating by 2030 to keep the 1.5 degree target within reach. According to the study, the greatest need to catch up is in energy supply for the transport sector. In 2019, only 5 percent of energy consumption was covered by renewables, it said. By 2030, the share in the 20 largest industrialized nations would have to rise to 62 percent.

The focus on the G20 countries stems from the group’s special responsibility in climate protection, according to the foundation platform. The G20 is responsible for around 80 percent of global energy-related CO2 emissions and has committed itself to decarbonizing the economy and combating climate change by ratifying the Paris Climate Agreement. However, the national strategies for expanding renewables and reducing emissions have so far been inadequate. luk

Norway wants to maintain high natural gas production until 2030

Norway has held out the prospect of natural gas production at the current, record-high level until the end of the decade. The current production level should be able to be maintained until 2030, Energy Minister Terje Aasland told Reuters news agency on Tuesday. He said there were “projects and plans for development and operation that can help maintain the high gas levels in the future”. In light of an agreement signed with the EU in June, he said he was also confident about the long-term demand for Norwegian natural gas in Europe.

Aasland rejected considerations of an excess profits tax for energy companies. Such discussions were not taking place, he told Reuters. “The additional revenue companies are potentially making now is forming the basis for future investments and the basis for the entire transformation of the energy sector.”

According to estimates from May, Norway is expected to produce about 122 billion cubic meters (bcm) of natural gas this year. This would be eight percent more than in 2021 and possibly a new record. The non-EU country has now overtaken Russia as Europe’s largest supplier of natural gas, according to data from Refinitiv Eikon. The country’s largest oil and natural gas producer, Equinor, is majority state-owned. The group has announced plans to increase investments in renewable energy. However, given the demand in Europe for fossil fuels from Norway, its development is also to be pushed forward. rtr

Poland’s president calls for removal of Nord Stream 2

Polish President Andrzej Duda has called for the elimination of the fallow Nord Stream 2 Baltic Sea gas pipeline between Russia and Germany in Kyiv. Because of Russia’s war of aggression against Ukraine, there can be no return to normality in relations with Moscow, Duda said Tuesday at the online consultations of the so-called Crimea Platform. Therefore, a different policy of the West is needed, “which will lead not only to stopping Nord Stream 2, but to eliminating Nord Stream 2,” Duda said, according to Polish agency PAP.

For years, Poland and other eastern EU countries have criticized the Russian-German project for undermining gas transit through Ukraine. Because of the looming Russian attack at the time, the German government refused to put the pipeline into operation in February. But there are voices in Germany calling for Nord Stream 2 to be opened.

At the Crimea Platform, Ukraine is mobilizing international assistance to bring home the Crimean peninsula annexed by Russia in 2014. “Crimea was and is as much a part of Ukraine as Gdansk or Lublin is a part of Poland, as Nice is a part of France, Cologne is a part of Germany and Rotterdam is a part of the Netherlands,” Duda said. Turkish President Recep Tayyip Erdoğan, whose country has good relations with Russia, also said, according to reports in Kyiv, that Crimea clearly belonged to Ukraine under international law. dpa

Director General of DG CLIMA Mauro Petriccione deceased

Mauro Petriccione, Director General of Directorate General CLIMA since 2018, died unexpectedly on Tuesday, European Commission President Ursula von der Leyen announced. He died of a heart attack.

Over the past four years, he had headed a Directorate General that is becoming increasingly important – especially within an institution that had previously tended to favor the Directorate General for Energy (DG ENER) regarding climate and energy issues. A heavy workload for the 59-year-old Italian.

The launch of the EU Green Deal in 2019 contributed to the boost of this DG, as DG CLIMA takes the lead in developing cost-effective policies and legislation in line with the European Green Deal and facilitates their implementation. At the international level, the Commission’s DG CLIMA is responsible for EU climate policy and leads international climate negotiations for the EU.

Petriccione graduated in law from the University of Bari in 1982 and later earned a master’s degree from the London School of Economics. He joined the Commission in 1987 and was in charge of the trade sector from 2004 to 2014.

“It is with deep sorrow that I learnt of the passing of Mauro Petriccione, our Director General for Climate Action. Mauro was a dear, respected colleague. His work earned him respect and friendships in Europe and beyond My thoughts are with his family & friends in these sad times,” wrote EU Commission President Ursula von der Leyen on Twitter. cst

Jan Pie – defense expert in Brussels

When Jan Pie looks out of his Brussels office window, he sees a Swedish submarine. It is Saab’s A-26, which specializes in stealth missions in the particularly shallow Baltic Sea, explains the secretary general of the AeroSpace and Defence Industries Association of Europe (ASD). Fortunately, it is only a model on the windowsill. He occasionally receives such gifts from ASD members and likes to keep them, he says.

Pie, a Helsinki-born Swede, heads an organization that has 20 major European companies and 21 national associations with headquarters in 17 countries. The last three years have been tough, he says. The pandemic has caused chaos in aviation. Now, huge orders are coming in to defense companies as European governments are suddenly massively increasing their defense spending. “They say they want 200 vehicles, and the next day they want 400 vehicles. Where is this additional production capacity going to come from?”

Still, and despite all the human suffering, he is convinced that Russia’s invasion of Ukraine has accelerated needed changes in Europe. “Europe has had a significant investment gap for a long time,” he says. “What is happening now is just a catalyst for something that needs to be done anyway.”

Good relations between EU and defense industry

In the almost ten years he has been with ASD, the European defense landscape has changed significantly. That the fragmentation of defense production must be overcome through greater joint procurement in the EU has now become an accepted view. The European Defense Fund was a turning point. Moreover, relations between the EU institutions and industry are now closer, which he welcomes. Now the Commission is approaching industry representatives to get their views.

Pie came to ASD from the Swedish Security and Defense Industry Association. Before that, he worked for 15 years at SOS Alarm, a company specializing in emergency call centers. By training, however, he is a life insurance specialist. So, in a roundabout way, he ended up in the military industry. “Personally, I’ve never had a problem working for the defense industry. Overall, it’s an important prerequisite for us to be able to defend open and democratic societies.”

His goal: better communication

However, there are also cases of weapons falling into the wrong hands. “When I read about it, of course, I am personally affected. I think it’s a disaster and we should all have mechanisms in place to make sure that doesn’t happen.” However, ASD as an organization is not doing anything concrete about it, he concedes. Export licenses, after all, are subject to government control.

According to Pie, most EU governments supported arms exports because they allowed local defense companies to maintain their production capacity after the end of the Cold War. That could change in the next few years. Still, Pie doesn’t see an EU army looming on the horizon. “But I would like to see a lot more consolidation on the demand side of the EU defense industry.”

In the coming years, Pie wants to make sure ASD communicates better. “Both the aerospace and defense sectors struggle with public perception,” he says. “One is the polluter, the other sells weapons that end up in the wrong hands.” The ASD needs to “be out there, discussing and being transparent about what we’re doing”. Ella Joyner