Batteries are the most promising and readily available technology for the decarbonisation of the transport sector.
Have you experienced this symptom of modern life dubbed low battery anxiety? It’s a real thing. It makes you reach out for your charger, internally cursing technology, hurriedly asking your colleagues or any random stranger for a charger, and systematically screening your surroundings for power outlets.
Batteries are undisputedly powering our wireless, connected and digitised lives while being instrumental to significant transformations of our society. They make a lot of things possible and must live up to high expectations.
In transport, batteries represent the most promising and readily available technology for the decarbonisation of mobility. You surely have witnessed the proliferation of acronyms such as BEVs (battery electric vehicles) and other PHEVs (plug-in hybrid electric vehicles) or FCEVs (fuel cell vehicles).
Batteries will also play a central role in the energy transition. Thanks to electricity storage, they will enable greater flexibility in the power grid and better integration of renewables. Ultimately, they could have a positive effect on our terms of trade: by boosting our ability to use indigenous energy sources, they will decrease our reliance on fossil fuels imports. For the climate, the electrification of transport and energy will reduce greenhouse gas emissions.
Recently, batteries have been at the centre of political attention as demonstrated with the creation of the European Battery Alliance. Batteries are no longer a mere technical issue debated among industry experts (or a source of anxiety). EU policymakers have realised the strategic role batteries can play at the crossroad of several policy areas: energy, environment, climate, digital, trade, industry and competitiveness.
Batteries are at the heart of the industrial revolution, and I am convinced that Europe has what it takes to become the world’s leader in innovation, decarbonisation and digitisation
Indeed, the business case seems quite clear. The World Economic Forum forecasts the global battery market to be worth USD 100 billion by 2025 while the European Commission speaks about a battery market of up to EUR 250 billion a year from 2025 onwards.
The challenge today is to build ‘gigafactories’, a term coined in the US by Elon Musk to designate the first of the kind Tesla battery factory in Nevada. European industry leaders are coming together to increase production capacity and cover the rising demand in batteries and cell components (have a look at the map). Meanwhile, the volume of investments required to build European ‘gigafactories’ or large-scale battery cell production facilities calls for European-wide consortia. Massive financing is needed now. The European Commission has thus called on manufacturers to set up Important Projects of Common European Interest (IPCEI) that would allow national funding (state aid) for cross-national battery plant projects.
Nonetheless, batteries are not the panacea. Challenges lie ahead. Among those, raw material supply: many people start wondering whether lithium will not become a new bottleneck, just like oil. Will the demand for certain raw materials such as cobalt be met? How can we meet high ethical standards for battery material extraction? The switch to circular thinking is raising expectations about the environmental footprint of batteries. It also paves the way for a sustainable battery production in the EU. How will policy support the industry to develop a competitive European ecosystem?
Our blog post series, Battery Insights, will charge you with all you need to know about battery policy in the EU: from the challenges and opportunities brought by the use of batteries to the latest policy initiatives aimed at building a European batteries ecosystem, through the geopolitics of batteries with the race toward raw materials…