Peter Tom Jones: "Do we really want Europe to become an industrial museum?"

"The tsunami of Chinese electric vehicles is coming, and Europe is sleepwalking into an abyss." This is how our documentary “Made in Europe: from mine to electric vehicle”* begins. With the arrival of the first BYD “Explorer” carrier ships at European harbors – carrying 7,000 BYD cars at a time – this scenario unfolds before our eyes. Worse yet, many EU Member States are actively contributing to it by providing subsidies to motorists buying (Chinese) electric vehicles or by ordering Chinese BYD electric buses through public tender procedures where price is the only (real) criterion.

And so, a specter haunts Europe: the specter of deindustrialization. What happened to the European solar panel sector earlier this century threatens to repeat itself with the wind turbine and automotive industries, which cannot compete fairly with China. On average, China already controls more than 65% of the global production capacity for electric vehicles (EVs), wind and solar energy, batteries, fuel cells, heat pumps, and electrolyzers.

Vertical integration, beyond the silos

Now what? Either we continue as we are, leading to gradual deindustrialization and impoverishment, or we change our approach so that the much-needed climate strategy goes hand in hand with cleantech-driven reindustrialization of Europe. We require a long-term vision and corresponding industrial policy where we start to connect the dots, rather than further promote the silo-based strategy of today. Just as China brilliantly achieved this over the past decades, Europe must take control of its production chains, from mine to electric vehicle (EV), including the (future) recycling of end-of-life EVs. This de-siloed vertical integration is necessary because the era of neoliberal, trade-based globalization has come to an end. We now live in an age of protectionism and resource nationalism. The subsidy policies of the Inflation Reduction Act in the US, as a direct response to a similar situation, and the more covert (export) subsidy policies of Chinese state capitalism compel Europe to adapt its policies.

Taking it all the way downstream means imposing import tariffs on artificially cheap cleantech or steel products, leveling the playing field. Toward consumers, a subsidy policy can be implemented – similar to the French eco-bonus system for electric vehicles – which, unlike the Flemish system, effectively discriminates against the import of cars produced in an environmentally and socially unfriendly manner. The same applies to company car taxation and public tenders (e.g., e-buses). However, such measures are inherently insufficient. Without innovation and commercialization of high-quality, competitive EVs and e-buses, tariffs and subsidies offer only temporary relief.

Regarding support for the European cleantech industry, the decision by the German government to allocate nearly 1 billion EUR in state aid for a new battery factory by Swedish company Northvolt is a ‘necessary evil’. However, an even better approach would be to organize this type of state aid at the European level. In doing so, we avoid member states being pitted against each other by companies seeking the best deal. This is currently the scenario for companies like ArcelorMittal and Umicore, which are lured to northern France with French state support to establish their green steel production and battery recycling.

Europe’s Mining Renaissance

But… even if we succeed in establishing a series of cleantech and green steel factories in Europe, the question remains: How will these factories be supplied with the necessary raw materials? Europe has painfully become dependent on the import of rare earth metals, copper, lithium, nickel, manganese, cobalt, gallium, germanium, graphite, and more. These are all resources dominated by a handful of rather undemocratic countries, increasingly wielded as geostrategic weapons. In the globalized world of the past, European car manufacturers could get away with importing these critical raw materials and exporting the associated social and ecological problems of irresponsible mining. Today, this (hypocritical) strategy is unsustainable.

We have no other choice but to initiate and co-finance a European mining renaissance**, coupled with the further development of our metal refining and recycling arsenal. The potential for critical raw materials in Europe is much greater than commonly thought. Finland and Sweden demonstrate how socially and ecologically responsible mining (and refining) for cleantech metals can work in practice. Instead of Not in my backyard, the majority of residents near these mines in the High North say Please or Better in my backyard (P/BIMBY).

In order to significantly boost Europe’s CRM extraction and refining, at least 10-15 mines and a multitude of new refineries will need to be opened during the coming years. Time is a non-renewable resource. The window of opportunity is closing. Hence, the new Critical Raw Materials Act will be essential in order to kickstart a number of “strategic projects”.

However, to achieve the benchmarks of the CRMA, we will need a radically different mindset in Europe. Policy makers, state agencies, consumers and citizens alike all need to understand that Europe, as a whole, will need to allocate sufficient space, provide ample financial resources, and fast track the required permits for the much needed strategic mining and refining projects to come to fruition. Without this shift in mindset, Europe will have no CRMs to feed its cleantech assembly factories, thereby losing out to China et al. across the board. The long-term result of that will be that Europe gradually transforms into an industrial museum. Is that something that we really want to see happening? ▲

TEXT: PETER TOM JONES, DIRECTOR OF THE KU LEUVEN INSTITUTE FOR SUSTAINABLE METALS AND MINERALS (SIM²) & IOF INNOVATION MANAGER FOR SUSTAINABLE METALLURGY

*On 22 March, Peter Tom Jones will be presenting this documentary during the Vuorimiespäivät gathering in Helsinki. The full documentary can be viewed here: https://kuleuven.sim2.be/fulldocumentary-made-in-europe-from-mine-toelectric-vehicle/

**On 27 March, the new documentary “Europe’s Mining Renaissance: A Catalyst for Climate Neutrality” will premiere during the DOCVILLE film festival in Leuven, Belgium; The trailer of this film can be viewed through SIM²’s Youtube channel: https://www.youtube.com/@SIM2KULeuven/videos