EDITORIAL

In a former lifetime I spent over 20 years working as a financial journalist in the City of London. My speciality was the foreign exchange and derivative markets where a move of one US cent with leverage could earn a good trader’s bank a six figure profit in a matter of minutes. In those days there were two types of trader. The analytical and the instinctive. The first would work carefully at considering the trends, index weightings and charts looking for the pattern to make a winning trade. This is unmistakably similar to the analysis that goes on in predicting our future battery requirements, players, market penetration, investment subsidies and the like in working out the economies of the gigafactory and battery needs of the future. The second trader was the instinctive one. They would have a gut feeling about the way a market was moving and would often choose something random as an omen. One favourite used to be the angle of the half-naked woman then found on page 3 of The Sun newspaper. Parts of her facing one way meant the dollar was going to go up. Or down. Both traders made money. But they each did so in different ways. Interestingly enough they each had an interest in expensive wines — one would understand and savour the bouquet and taste. And the other? Well he’d spoof you that you couldn’t drink a $200 bottle of Château Lafite in one. The relevance to the battery markets is that we’re in a situation where we have two fundamentally different approaches to how we can develop the gigafactories and battery cultures of the future. Look to the US and China and you see two countries instinctively wanting to play at the top table for the new energy game in town. The tax breaks in the US Inflation Reduction Act have been calculated and, yes, the entire $370 billion on offer has been analysed but fundamentally the American approach is knee-jerk and instinctive. So too is China’s approach in handing out subsidies to get the gigafactories of the future. The rest of the world — thinking particularly of Canada, Japan and South Korea — are also making moves. If our electric future is going to be one powered by renewables with batteries for energy storage as now seems inevitable it’s just plain common sense that you’ll want to support your own nation’s attempts to become top dog in the technology. But there’s also the analytic approach that seems to be part of a general European bureaucratic understanding of the world. In this idealised future — imagine the whole continent is gently humming with everything from perfectly recyclable toothbrushes to infinite cheap power at its command — everything will be perfect. In this analytic world the underpinning of it is being thrashed out now by the civil servants of the European Commission as we transition to this gleaming future where we all wear open-toed sandals, hum Joan Baez songs and there’s not a whiff of that deadly CO2 around. But just a quick glance through the agenda that these dedicated and, we presume, well-meaning bureaucrats have, shows the immensity of the tasks they are setting out for themselves. And their inability to achieve them in any kind of sensible or time-realistic fashion. The over-arching aim is set out in the European Green Deal but this and the regulation around it is huge. Your eyes may blur over the next few paragraphs but there is a valid point considering the scope of what the European Commission seeks to achieve. We have the European Climate Pact, enabling the Green Deal, the Sustainable Products Initiative, the creation of the Circular Economy, the Renewable Energy Directive, the EU Biodiversity Strategy, the Zero Pollution Action Plan, the Carbon Border Adjustment Mechanism, the Energy Taxation Directive, the Fit-for-55 Package (55% reduction of CO2 by 2030) and the soonto-go-live Battery Passport to name the first ones to come to mind. To add misery to this blur of legislation we have

In its Farm-to-Fork program the Commission sets the target to make 25% of EU agriculture organic by 2030 — none of the EU’s 440 million citizens or 12 million farmers were asked for their opinion let alone their vote on the matter.

just had the approval of the first phase of the Batteries Regulation (that update of the 2006 Battery Directive) which sets commercial logic to one side and says only batteries made to EU specifications can be allowed into the bloc. However, to make the regulation actually work is going to require another six to eight years of secondary regulation and committee work to achieve its goals. As an aside is that really what European automotive OEMs want? More expensive batteries to go into their already expensive EVs? The EU’s attempt to drive lead battery manufacturing out of Europe — sometimes it feels like the use of lead batteries too! — has its culmination in the magnificent REACH regulations banning all hazardous substances out of the continent. Lead, of course, being one of them. At least it’s kept ILA staff more than busy for over a decade in combatting (mostly successfully) Commission inroads into the lead battery industry. This attempt to regulate all life across the EU — the Economist newspaper once called it the potential de-industrialization of Europe — has even extended to the food we eat. In its Farm-toFork program the Commission set the target to make 25% of EU agriculture organic by 2030. A quirk of governance: none of the EU’s 440 million citizens or 12 million farmers were asked for their opinion or vote on the matter. The odd thing about these targets — and let’s face it a lot of what the Commission hopes to achieve are sensible — is that no democratically elected body in Europe voted for most of them. Europe’s system of governance is an odd one — the unelected civil servants set out the policy and the regulations while the elected European Parliament rubber-stamps them. This may be a slight over-generalization, but the generalization is valid. The Commission itself is above the sordid world of business and accountable public expenditure — every month they ship the whole apparatus of EU governance from Brussels to Strasbourg for a few days as part of a treaty obligation to keep the French happy a couple of decades ago. (Imagine the uproar over the cost if the US moved the seat of government from Washington to New York for a few days every month!) And in the next couple of months this difference in approach between the instinctive and over-analytic is going to come to a head as everyone that had previously been inclined to set up gigafactory plants in the EU is now voting with their feet and heading east and west. The European Battery Alliance — an organization that stands out above others and dares to speak its mind — reckons that at least €100 billion ($106 billion) is needed to avert a potential investments meltdown for gigafactory plans. EU Commission vice-president and batteries czar Maroš Šefcovic, who in fact set up the Alliance in 2017, has been told in no uncertain manner of the damage being done to Europe’s fledgling battery plans by foreigners. But let’s not ignore the impressive achievements that the EU has made in drawing post-war Europe together and unifying a fractured continent. The ability, for example, to take a five-hour drive through Europe, going through seven different countries but using one currency is an impressive one. The trouble with creating this cohesive entity — where there are 24 official languages by necessity — is that decision-making is complicated by the need to be consensual. And, in the race to attract battery investment into individual member countries, a long, dragged-out partisan dialogue is more than likely to happen …