French Economy Minister Bruno Le Maire has called on Italy to cooperate on critical raw materials. By these we mean metals such as lithium and cobalt which are essential for building solar panels, batteries for electric cars, wind turbines. Without them, any energy transition plan is impossible. And that is precisely the risk that the European Union’s Green Deal runs.
According to an analysis by Cassa Depositi e Prestiti, the EU imports 80% of the 30 critical raw materials needed for its production. The addiction is set to worsen in the coming years. The EU Commission has estimated that by 2050 the annual demand for lithium for batteries could increase 56 times compared to current levels. Europe currently extracts only 1% of the global total. The gap between demand and local production is similar for cobalt and rare earths.
Globalization can always be relied upon, it will be argued. The problem is that supplies are becoming unstable due to the uncertainty of geopolitical relationships. China, the first global producer of critical raw materials, could adopt restrictive measures on exports both to satisfy domestic demand and as a foreign policy tool. With the Inflation Reduction Act, then, the Biden administration has launched a campaign to incentivize the purchase of products containing raw materials extracted in the United States, indirectly stimulating domestic mining activity and the local consumption of critical raw materials.
In short, the European Green Deal runs the risk of ending up crushed in the green pincers of the two global superpowers. Hence the collaboration proposal made by Le Maire to the Minister of Enterprise and Made in Italy, Adolfo Urso. “I invited Italy to join the public-private investment fund that France has launched” with a base of 500 million euros, with the aim of reaching one billion euros, said the French minister. The European Raw Materials Act is expected to be issued at the end of March, which should facilitate the diversification of supplies and promote the circular economy.
Indeed, the best hope for the EU seems to lie in recycling. Despite some deposits of rare earths in Sweden and some active cobalt and lithium research permits in Italy, the European extractive potential is scarce. The circular economy could instead make a significant contribution to reducing the imbalance between supply and demand, for example with the recovery of the content of smartphones and other technological devices. By 2040, through the recycling of exhausted batteries, calculates Cdp, the EU could find more than half of the lithium (52%) and cobalt (58%) needed for electric mobility.