Court of Auditors: EU could miss climate targets due to battery industry

According to a report, the EU runs the risk of falling behind in the battery industry and thus not achieving the climate goals.

Court of Auditors: EU could miss climate targets due to battery industry

According to a report, the EU runs the risk of falling behind in the battery industry and thus not achieving the climate goals. If production does not grow as planned, the EU could be forced to postpone the planned ban on the sale of new petrol and diesel cars for 2035 and thus miss its climate targets, as the European Court of Auditors announced.

According to the Court of Auditors, the EU and its member states have effectively promoted industrial policy for batteries in recent years. However, difficult access to raw materials still often leads to supply bottlenecks. Added to this would be rising costs and tough global competition. Efforts by the EU to increase battery production may therefore not be enough to meet rising demand.

The auditors specifically warn of two scenarios in the event that the production capacity for batteries in the EU does not grow as planned. In addition to postponing the plan to only allow emission-free new cars from 2035, batteries and electric vehicles from third countries could also be used. However, according to the auditors, this is to the detriment of the European automotive industry and its employees.

Production capacity is developing rapidly

According to the Court of Auditors, production capacity in the EU is developing rapidly and has the potential to increase from 44 gigawatt hours in 2020 to around 1,200 gigawatt hours in 2030. However, the development could be jeopardized by geopolitical and economic factors. According to the Court of Auditors, battery manufacturers could migrate from the EU to other regions - particularly to the USA. Unlike the EU, the US directly subsidized mineral extraction and battery manufacturing.

This also applies to the purchase of electric vehicles that are manufactured domestically with American components. In addition, the EU is very dependent on raw material imports. Although Europe has some reserves of some raw materials, they will take at least 12 to 16 years to develop, so increasing demand cannot be met quickly. In addition, the competitiveness of battery production in the EU could be jeopardized by rising raw material and energy prices.

According to the European Association of Automobile Manufacturers, almost every fifth new car registered in the EU in 2021 had an electric drive. In addition, the sale of new petrol and diesel cars is to be banned by 2035. Therefore, batteries are of great strategic importance for the EU - and important to achieve the climate goals. According to the Court of Auditors, the European battery industry is still far behind China. The country has 76 percent of global production capacity, the EU and the USA are well behind with 7 percent each.

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