Renewable energies and technologies are becoming a motor of the European economy. Photovoltaic solar, wind, green hydrogen and electric vehicles are undergoing great development, driven by the European Union policy that is committed to them to reduce emissions and increase energy security.
Today no one doubts that such energies and technologies are going to play a relevant role in order to be climate neutral by 2050, but to think that they are going to make Europe self-sufficient from an energy point of view would be naive. The reason is quite simple: Europe lacks the critical minerals necessary to manufacture solar panels, wind turbines, electrolysers or electric batteries, whose global demand, if the objectives of the Paris Agreement are met, could quadruple to six times by 2040.
To all this we must add that its production is, to a large extent, under the control of China. The Asian giant is the first producer of rare earths and one of the main lithium, in addition to controlling the production of cobalt in the Democratic Republic of Congo. China also has the necessary technology to refine these and other critical minerals, which has allowed it to become the world’s leading manufacturer of materials for the so-called “clean” energy sector.
China’s dominance of this emerging sector raises fears that what Europe is doing is trading one dependency for another, that of hydrocarbons for that of critical minerals, that of Russia for that of China. The risk we face is bottlenecks in supply chains and price increases such as those registered by cobalt, lithium and nickel, which caused the costs of electric batteries to increase by 10% in 2022. .
Are there alternatives to avoid this dependency? The answer is yes and it consists in promoting the European industry even more. The EU has gotten down to business and, through the Fit for 55 package, is taking investment in the sector to new highs. By 2030, the announced projects will cover the production of electrolysers and electric batteries, but Europe will continue to depend on Chinese imports to manufacture wind turbines and photovoltaic panels.
To make further progress, the EU needs to simplify its decarbonisation strategy, avoiding rules and regulations that not only hinder investment, but also jeopardize the industry’s ability to compete in a global marketplace. The future of the European economy depends on the ability of our industry to adapt to the challenges of the energy transition, be it producing renewable fuels, green hydrogen or materials for renewable energy. All these sectors can generate some 14 million jobs in the world in 2030. It is an opportunity that, if we act wisely, we cannot miss.
