Tuesday

22nd Jan 2019

Opinion

Raw materials: 'holy grail' of 21st century industrial policy

  • If we were to collect all smartphones and recycle them, we could have enough cobalt to manufacture batteries for four million electric cars. (Photo: Phil Greaney)

Raw materials are indispensable for carbon-neutral solutions in all sectors of the economy.

This is among key messages presented in the European Commission's strategy towards a climate neutral Europe by 2050.

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  • '"Hardly any metal mines have opened in the last decade,' Maros Sefcovic points out (Photo: European Commission)

Even if they go unnoticed, practically everything we use contains raw materials like steel, aluminium or copper.

Less-known metals, rare earths are essential to green technologies such as wind turbines. Lithium, nickel, cobalt and graphite are necessary for electric cars.

It is therefore clear that with Europe fully embarking on the low carbon transition, new types of assets are becoming highly strategic.

Today, the world uses 90bn tonnes of such raw materials annually.

The OECD forecasts that this will almost double to 167bn tonnes by 2060.

Without changing our consumption patterns – and moving from a "use and discard" approach towards circularity – this increased demand will place huge pressure on the planet's resources.

Fierce global competition with unwanted monopolies would accelerate.

For instance, China already controls much of the output from Congo's cobalt mines.

Both, economically and geo-strategically Europe must make sure that its current dependence on fossil fuels is not replaced by another one: on primary raw materials coming from outside our continent.

In other words, we must change the game so that raw materials do not become 'new oil'. And it requires bold collective action.

We do not start from zero

Europe already has an active raw materials strategy. Its original objectives remain valid: securing access to raw materials outside Europe, developing access to Europe's own resources, improving reuse and recycling of raw materials.

We have already chalked up some successes: getting other countries to remove unfair trade restrictions on raw materials, identifying raw materials critical for Europe and funding research and innovation accordingly.

We are also boosting exploration, second use and refining capacity when it comes to raw materials strategic for batteries.

That is why this Friday (14 December) – under the European Battery Alliance – I am meeting CEOs of main raw materials organisations as well as the European Investment Bank to step up our game.

Catching up with China

More and more of the world's raw materials are now heading in China's direction and we also see its strategic drive to have prime access to resources in Africa.

Thanks to the EU Battery Alliance launched just a year ago, Beijing's five-year lead has been shortened by two years. But much remains to be done.

Firstly, we need to diversify the raw materials' sources, for instance, by looking at Latin America, Canada and Europe's own neighbourhood.

As flagged in our 2050 strategy on climate neutrality, EU trade policy as well as our energy and climate diplomacy has a vital role to play.

I see enormous potential in a recently announced Africa-Europe Alliance – a new, more balanced partnership where Europe can help Africa develop a sustainable raw materials sector, boosting its overall economic and social development.

Moreover, just as the EU remains open for climate-friendly investment and trade, we should demand reciprocal, fair and transparently governed access to partner countries' markets, infrastructure and raw materials.

Big on the circular economy

Secondly, we need a profound shift towards recovery, re-use and recycling of raw materials in all sectors where new dependencies are emerging.

This is particularly the case for dependencies on a handful of countries outside Europe – often countries which struggle with stability or environmental and social standards.

This reduction of materials and more efficient production can translate into a true hat-trick: improved competitiveness, huge business and jobs opportunities, less pollution.

According to recent studies, a truly circular economy could reduce greenhouse emissions by up to 60 percent.

Moreover, we have an untapped 'urban mine' of secondary raw materials in products sitting around our homes.

Industry's message is loud and clear: if we were to collect all smartphones in our drawers and recycle them, we could have enough cobalt to manufacture batteries for four million electric cars.

Thirdly, we need to have a better grasp of Europe's domestic raw materials potential and match it with our regulatory framework, including fast-track permitting.

A 'holy grail' of Europe's climate neutral future

We are largely self-sufficient when it comes to wood and industrial minerals. However, hardly any metal mines have opened in the last decade, despite metals' abundance and their role in technologies reducing greenhouse gas emissions.

This goes hand in hand with people's awareness of the variety, amounts as well as origins of raw materials needed for the equipment such as mobile phones, electronics, cars, textiles, plastics or medicines.

Europe has world-leading technologies as well as high environmental and social standards and we are making sure that mining is no longer the dirty, polluting industry of the past.

Our strategy is not to displace environmental costs to other parts of the world.

Our strategy is to see sustainable mining with high-quality jobs created in Europe as well as transparent information about the environmental footprint and recyclability.

We do count on people's demanding stance: looking not only at the price but also at what goes into a product they buy.

I am convinced that raw materials are the 'holy grail' of our 21st century industrial policy and ultimately, our climate neutral future.

Therefore, we all have to move into a higher gear – industry, innovators, institutions, member states, citizens. The stakes are high, as this is a clear pre-condition for Europe to succeed.

Maros Sefcovic is vice president of the European Commission in charge of the Energy Union and EU space policy coordination.

Commission targets Africa in EU drive for raw materials

Europe's development policy and external lending practices should play a greater role in securing raw materials from key producer regions such as Africa, the European Commission is set to propose in a new policy paper on Wednesday.

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