Belgium, (Brussels Morning Newspaper) The European Federation for Transport and Environment (T&E) has called on the EU to match new US subsidies for the green sector.
The group noted that the bloc is dependent on China for electric car batteries and predicted that it could end its reliance by 2030 by matching the US’ green subsidy spree, according to The Guardian reporting on Tuesday.
T&E reminded that the US launched green subsidies worth USD 369 billion under the Inflation Reduction Act, which will attract companies from the green sector to the US.
According to T&E’s study, the EU could cover more than 50% of its needs for lithium from European projects by 2030 if it expands the green subsidy scheme to match the US.
Lithium is used in lithium-ion batteries, with roughly 90% or processing taking place in East Asia and no lithium refineries in Europe. However, France and Germany have launched refinery projects, with the EC preparing rules on critical raw materials to make sure all processes meet the highest environmental standards.
The study notes that the EU could cover two-thirds of its demand for cathodes from local production by 2027, pointing out that projects underway in Poland and Sweden will contribute to this.
Subsidies to attract investors
At the same time, T&E warns that companies could move projects planned in Europe to the US due to new subsidies provided under the IRA for establishing supply chains for battery production in the US.
Julia Poliscanova, a senior director at T&E pointed out “today, half of the lithium-ion battery cells used in the EU are already made there… but the Inflation Reduction Act has changed the rules of the game and Europe needs to put more money on the table or risk losing planned battery factories and jobs to America.”
T&E called on the EU to establish a dedicated fund financed through joint borrowing to support investments in batteries, renewable energy, and electric vehicles, among others.
UK MPs have also raised concerns about excessive reliance on China, warning that electric vehicle supply chains in Britain are threatened by political tensions between the West and Beijing.