This article is part of our special report Navigating the road ahead for battery tech.
Europe’s ambitions of cornering a substantial slice of the multi-billion-euro global battery market are best illustrated by Finland, which has all the raw materials needed to produce electric vehicle power packs and the right conditions needed to do it sustainably.
Due to growing demand for e-mobility and renewable energy storage options, Europe’s battery market potential could reach €250 billion annually by 2025, according to some estimates. Electric vehicle (EV) sales are predicted to skyrocket globally and drive up demand.
That has prompted the European Union to launch a dedicated mini-industrial policy – known as the Battery Alliance – and to tweak existing legislation in order to make it easier for companies to enter the market and ramp up production.
Relaxed state aid rules granted to so-called Important Projects of Common European Interest (IPCEI) have unlocked billions for cross-border projects aimed at building factories, recycling used batteries and more.
But one of the most challenging factors facing Europe’s industrial push is where to source raw materials like cobalt, lithium and nickel.
Non-EU countries that have large deposits often do not stick to the same level of human rights and sustainability standards, which undermines Europe’s aim of producing “the greenest batteries on the market”.
According to a 2016 report by Amnesty International, 20% of the Democratic Republic of Congo’s (DRC) exported cobalt is produced via artisanal mining practices, which often involves the use of child labour. It is often difficult to determine where materials originally came from due to third-party vendors.
Work is ongoing at the European Commission to define strict battery criteria so manufacturers know where the goalposts are.
But unless those requirements immediately force change in countries like China and the DRC, the EU’s supply needs will be a problematic issue.
That is where Finland comes into the equation, with its raw material deposits of nickel, copper, cobalt, lithium and graphite, active mining and metallurgical industries and growing manufacturing sector.
“There are ten active mines and exploration projects, at various stages of development, three of which produce nickel, copper and cobalt concentrates, which are mostly refined locally to supply the EU market,” says a research paper published by the European Federation of Geologists.
As an EU member, Finland is bound to respect community laws on environmental standards, labour market rules and competition policy but also has the political and financial clout to pursue more sustainable industrial processes.
According to the study, one mine deploys “a unique and energy-efficient way to extract metals with about 40% less greenhouse gas emissions and 20% less energy consumption than the average for nickel production.”
Finland is also well placed to ramp up clean energy capacity and its government has pledged to go carbon neutral by 2035. Neighbouring Sweden and Norway are also on track to scrub fossil fuels from their energy mixes within several decades.
The environmental impact of an electric car battery is a divisive matter, as full life-cycle assessments of a vehicle’s footprint should take into account how the power pack was manufactured.
Low standards at the beginning of the value chain drags down the green credentials of EVs and can act as a limiting factor on vehicle sales, which are increasingly driven by consumer awareness of environmental factors.
Finland enjoys a plum position in Europe as the only country currently mining cobalt, which is still a crucial battery component, despite efforts by the likes of General Motors and Tesla to reduce the percentage needed by substituting it for aluminium or more nickel.
However, it is not the only European country that has cobalt deposits. According to the Joint Research Centre, resources are available in Spain and Sweden, while there are unconfirmed amounts in Cyprus, Slovakia, Austria, Czech Republic, Germany, Italy and Poland.
The study also cites the availability in EU-applicant countries and neighbours Albania, Greenland, North Macedonia, Norway, Serbia and Turkey.
From mine to road
Despite plans to exploit these resources when financially viable and space-based prospecting efforts aimed at identifying new deposits, it is still likely that Europe will remain dependent on imports for the foreseeable future.
In order to try and guarantee the sustainability credentials of the raw materials going into battery production, the Technical Research Centre of Finland (VTT) and Geological Survey of Finland are working together on a joint €5.8bn project called BATTRACE.
The idea is to develop a viable and sustainable methodology for tracing materials all the way from the mine to the final product, so companies can guarantee that what they are putting into their batteries is the real McCoy.
“If it was possible to trace the production chain of battery materials from the battery plant all the way to the mine, certification could be given to sustainably produced batteries,” said VTT’s Päivi Kinnunen.
“This would give mines and metal refineries with responsible operating practices a competitive advantage, which would encourage the European production chain to develop and grow.”
The three year project aims to identify unique regional-fingerprints of metals at an atomic level, which should survive throughout the entire manufacturing process. It would also help assess how much recycled material has been used.
Finnish Minerals Group chief technology officer Jani Kiuru said that “the need, and partly also the pressure, to develop traceability come from EV manufacturers and the European Green Deal initiative, which emphasises the use of sustainably produced raw materials.”
The paper published by the European Federation of Geologists said that “there is clearly an urgent need to embrace these ideas and move towards more transparent and traceable raw materials flows along the battery raw material value chain.”
End of the chain
Finland has not yet cornered fully the production link of the value chain and only recently saw a Li-ion battery assembly plant open its doors in 2019, when Valmet Automotive converted an old cell phone factory.
Neighbour Sweden has embraced the manufacturing side more aggressively and Northvolt, a company set up exclusively to tap into the lucrative EV battery market, has rapidly scaled up its productions and is forging ahead with construction on a new ‘gigafactory’.
Recently, the firm also brokered a partnership with aluminium giant Hydro on a recycling venture that will see them split the usable components from old batteries between them.
France and Germany are both investing heavily in production capacity. President Emmanuel Macron and Chancellor Angela Merkel have both identified the sector as a future-proof industry that their countries have to prioritise.
In February, Macron cut the ribbon on a new battery factory in France’s southwest and, as part of a €8bn bailout of the car sector, obligated Renault to sign up to the Battery Alliance, joining fellow marque Citroen among the list of large companies involved.
Germany is also set to follow in the footsteps of France in leading a multi-billion-euro IPCEI application, which will reportedly be notified to the Commission during the summer, with approval likely by the end of the year.
According to initial reports, that cross-border package will be worth significantly more than the French-led project and involve more countries than before.
It is clear that Finland will not be able to supply all of Europe’s demands but the know-how and experience that it is building day-by-day will prove crucial to wider efforts aimed at increasing battery production.
The European Green Deal has survived the coronavirus outbreak largely unscathed and policies like the Just Transition Fund have come out the other end with a better hand than before.
As EU members continue to pursue national and collective policies, Finland might yet be used as a model to follow, especially as regions and communities start to think about what they should adopt in place of polluting industries like coal mining.
[Edited by Benjamin Fox]