{"id":21697,"date":"2022-05-23T10:12:16","date_gmt":"2022-05-23T09:12:16","guid":{"rendered":"https:\/\/www.innovationnewsnetwork.com\/?p=21697"},"modified":"2022-07-31T18:16:36","modified_gmt":"2022-07-31T17:16:36","slug":"establish-eu-domestic-rare-earth-supply-chains","status":"publish","type":"post","link":"https:\/\/www.innovationnewsnetwork.com\/establish-eu-domestic-rare-earth-supply-chains\/21697\/","title":{"rendered":"How can we establish EU domestic rare earth supply chains?"},"content":{"rendered":"

Establishing EU domestic rare earth supply chains is a fundamental requirement, argues Dr Nabeel Mancheri, Secretary General at (REIA)<\/a>. Here, he outlines their position paper in support of proposed updates to ETS Directives AM-353 and AM-1189.<\/h2>\n

The goal of establishing EU domestic rare earth supply chains is becoming an ever-increasing need and will be a fundamental requirement for energy-saving applications. We firmly believe these supply chains can be achieved if included in the European Union\u2019s Innovation Fund (IF).<\/p>\n

The IF is one of the world\u2019s largest funding programmes to demonstrate innovative low-carbon technologies and is perfect for all energy-saving applications. REIA\u2019s position paper in support of a proposed update to the Emissions Trading System (ETS) Directives AM-353 and AM-1189 to include the domestic production of rare earth permanent magnets in the EU is now urgent.<\/p>\n

Substituting rare earths is easier said than done, as rare earth permanent magnets in the drivetrain motor of EVs yield the efficiencies that make the EV\u2019s battery economics work.<\/p>\n

There is no shortcut to resolving the critical minerals supply chain conundrum \u2013 it takes a holistic approach of including all minerals and heavily incentivising the processing of primary and recycled materials in the EU. If one type of critical mineral (e.g. rare earths) is not addressed appropriately, then the policy prescription for battery materials \u2013 that has been successful so far \u2013 becomes inadequate.<\/p>\n

Why rare earth permanent magnets are practically difficult to substitute for EVs?<\/h3>\n

Rare earth permanent magnets (REPMs) provide the most energy-efficient technology solution for the drivetrain motors of EVs. For an EV to achieve a given range without using rare-earth permanent magnets in the drivetrain motor design, the energy loss will be higher. Therefore the battery will have to be around up to 30% larger.<\/p>\n

What is the required magnitude of rare earth supply for European EVs?<\/h3>\n

For the average passenger EV to be competitive enough in terms of performance compared to the average passenger internal combustion engine (ICE) vehicle, it would require 2kg of rare earth permanent magnets used in its drivetrain motor. In effect, to satisfy the EU\u2019s target of 30 million EVs manufactured and used by 2030<\/a>, there is a demand of approximately 60,000mt cumulatively for rare earth magnets (60,000mt x 31.5% = ~19,000mt of which is rare earth material) only for European EV manufacturers.<\/p>\n

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What prevents the private sector from proceeding with large-scale rare earth projects?<\/h3>\n

In short, the lack of the correct type and magnitude of EU funding options for both CAPEX and OPEX to create a meaningful level playing field will prevent the private sector from proceeding further.<\/p>\n

When it comes to developing policy that shapes supply chains and mobilises the required private capital for establishing local production of rare earths, three risks require management:<\/h4>\n

1\u00a0\u00a0\u00a0 Market risk management<\/strong>: Addressed by the European Green Deal, setting expectations for industry to converge to the EU\u2019s 2050 climate targets;<\/p>\n

2\u00a0\u00a0\u00a0 Technology risk management<\/strong>: Addressed by the EU HORIZON funding programmes incentivising innovation and R&D collaboration; and<\/p>\n

3\u00a0\u00a0\u00a0 Financial risk management<\/strong>: Not addressed adequately yet for rare earths. For the European automotive manufacturing transition from ICE to EVs to be successful and for the corresponding automotive manufacturing jobs to be safeguarded instead of being offshored, the EU needs to ensure domestic resilient supply chains of critical raw materials.<\/p>\n

Two primary technologies involved require critical raw materials: batteries and drivetrain motors.<\/h4>\n