Published 2019-04-15

This post is also available in Swedish

Will Europe catch up with the battery bandwagon?

Is the EU too late in formulating its battery aspirations? This question was raised during a recent seminar in Brussels at the annual Ideas Lab of the Centre for European Policy Studies (CEPS). Mistra is working closely with CEPS, a Brussels-based think tank.

Is the EU too late in formulating its battery aspirations? This question was raised during a recent seminar in Brussels at the annual Ideas Lab of the Centre for European Policy Studies (CEPS). Mistra is working closely with CEPS, a Brussels-based think tank.

Lisbeth Dahllöf of IVL Swedish Environmental Research Institute emphasised the Nordic countries’ potential in a European battery initiative.

‘There would be many advantages if Europe took the initiative for producing its own batteries on a large scale. For example, Europe has considerably stricter environmental requirements and a lower proportion of electricity from fossil sources in lithium-battery production than other parts of the world. There are also reserves including cobalt in Scandinavia and, above all, Finland,’ said Dahllöf, who participated in the panel discussion on batteries.

‘To make a profit and cut energy use per kilowatt-hour, we need gigafactories on a scale we don’t yet have in Europe. But they may come soon,’ she added.

Lisbeth Dahllöf

Batteries are a strategically important product area and key to a fossil-free economy. Any operator who dominates the battery market can also count on a substantial head start in purely industrial terms. Today, the battery in an electric car makes up some 40 per cent of the value of the entire vehicle.

In Asia, and above all China, this has been understood for quite some time and China has tightened its grip on the battery market. Just over half the world’s batteries for electric vehicles are produced in vast Chinese ‘gigafactories’.

This situation worries many people, notably the European car industry, with its experience from more than a century of developing efficient internal combustion engines — knowledge that may soon be obsolete. The car of the future consists mainly of a battery, an electric motor, a computer and four wheels.

There are also security-policy fears warning that we are about to make ourselves too dependent on unstable countries, or countries with a democratic deficit in terms of energy access. Some short-term experience should have a deterrent effect. Being dependent on Chinese batteries for our energy supply is probably no better than being dependent on Russian gas.

Relatively late and somewhat sluggishly, the EU has begun a major initiative to catch up in battery production. The European Battery Alliance is a large-scale European research and development initiative, to which the European Commission has pledged EUR 200 million.

Is the EU too late — is it money down the drain?

The answer given at a CEPS Ideas Lab seminar in late February was that yes, it is late, but we may possibly be in the vanguard for the next shift in technology. Battery development is far from mature and we can count on new technological advances. Then Europe can jump on the bandwagon.

We may find competing with China difficult, but the European Battery Alliance is about more than just money. Batteries are not a commodity like others but a critical resource, and Europe must take responsibility for securing the supply.

Seminar attendees included representatives of the European automotive industry, the European Commission and a major European battery manufacturer specialising in batteries for industry.

One aspect of seminars at Ideas Lab is the rule that participants must be able to speak freely, from the heart, with no risk of being quoted. Representatives of industry and the European Commission must be able to speak clearly without affecting either stock exchange prices or their own careers. This is one of the factors that make CEPS Ideas Lab such an attractive arena for high-level exchange of ideas. But for this reason, direct quotations are reproduced here only with the speakers’ consent.

The European battery industry’s representative initially reported a catalogue of European failures. We never went to the moon. We do not manufacture microprocessors or personal computers. We do not control the Internet. We have even failed bring about efficient production of solar panels, despite major research efforts, he said. However, he saw an opening when it comes to batteries. His own company was successful in niche products.

But, the objection went, the big industrial bulk commodity is not niche batteries but batteries for electric cars, in particular, and here Europe is lagging ominously behind.

Are battery-powered electric cars indisputably better for the climate, though? Dahllöf, representing IVL Swedish Environmental Research Institute, had brought with her a high-profile literature study on life-cycle analyses of batteries. She and her colleagues had investigated the state of research on how much carbon is emitted during actual production. Would batteries improve this per kilometre driven with batteries? Would the net result be beneficial in climate terms?

The study drew the conclusion that, compared with a petrol or diesel-powered car, an electric car does not reach break-even point until seven or eight years later. The comparison was thus between carbon emissions from battery production and those from driving a car that runs on fossil fuel. But Dahllöf had no data from gigafactories in China at that time.

‘What’s more, batteries tend to last longer than that,’ she said.

The Centre for European Policy Studies (CEPS) is a Brussels-based think tank with ample research capacity and more than 60 research employees. Mistra is a partner in CEPS and one of the sponsors of the CEPS Ideas Lab, the Centre’s most important event, which took place this year from 20 to 22 February. CEPS is also a partner in Mistra Carbon Exit.