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Lithium: A key component in the EU’s clean energy transition

Lithium holds a pivotal position among the 34 critical raw materials listed by the EU under the Critical Raw Materials Act (CRMA). As the EU strives to shift away from fossil fuels and embrace clean energy, lithium emerges as a cornerstone in this transition.

The recent adoption of the CRMA by the EU Council sets ambitious targets for the European industry, aiming to achieve 10% of extraction, 40% of refining, and 15% of recycling of key minerals by 2030. Under this legislation, lithium is identified as one of the essential materials crucial for facilitating the green transition.

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Why lithium?

Lithium’s significance stems from its integral role in the production of batteries needed for electric vehicles and energy storage systems. With the EU committed to reducing greenhouse gas emissions by 55% by 2030, lithium is poised to experience a surge in demand to support this transition.

According to the International Energy Agency, global demand for lithium is projected to increase 42-fold by 2040 compared to last year. This surge is primarily driven by the growing adoption of electric vehicles and other clean energy technologies.

An exceptionally lightweight mineral, lithium plays a crucial role in energy storage, addressing the intermittency of renewable energy sources like solar and wind power. This enables efficient utilization of clean energy in both stationary and mobile applications.

Mining process and available resources

Lithium can be extracted from hard rocks or liquid brines. While geothermal lithium brines and salars found in regions like Chile, Argentina, and Bolivia dominate the current market, Europe focuses primarily on hard-rock deposits for lithium extraction.

Currently, the EU heavily relies on imports for processed lithium, with 81% of extracted lithium and 100% of processed lithium being sourced from outside the EU. However, Europe boasts significant lithium deposits, with 27 identified sites across various countries including Czechia, Finland, Germany, Portugal, and Serbia.

Challenges and EU initiatives

Despite the EU’s efforts to accelerate permits for extraction and refining through the CRMA, lithium projects in Europe face challenges such as regulatory red tape, social acceptance, and environmental concerns. While initiatives are underway to address water consumption and local opposition, uncertainties remain regarding the feasibility of these projects and potential breakthroughs in alternative battery technologies.

To secure its lithium supply, the EU has forged trade partnerships with countries possessing lithium production or reserves, including Argentina, Canada, Chile, and Greenland. Additionally, transatlantic cooperation with the US aims to diversify global critical minerals supply chains, ensuring a sustainable and secure lithium supply for Europe’s clean energy transition.

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