Source: Wall Street News
Author: Xu Chao
Some institutional analysis believes that if the bill is passed, the EU will be more strict on the management of lithium compounds, the cost of domestic production of batteries will rise, and overseas lithium batteries and new energy vehicle exports will benefit.
The EU’s proposal to classify lithium as a hazardous substance could affect the localization of the local battery supply chain.
The European Commission is currently evaluating a proposal by the European Chemicals Agency (ECHA) to help the EU achieve self-sufficiency in electric vehicle batteries. The proposal lists lithium carbonate, lithium chloride and lithium hydroxide as materials harmful to human health, arguing that the related materials may have effects on human fertility, fetuses and newborns.
The European Commission will meet on July 5-6 to discuss whether to list materials such as lithium as hazardous, with a final decision expected in late 2022 or early 2023.
The assessment results will seriously affect the lithium battery manufacturing industry in the EU region.
According to estimates by the European Commission, by 2030, in order to meet the demand for on-board batteries, European lithium demand will reach 18 times the current supply, and by 2050, it will be 60 times more.
One of the big questions facing the EU right now is how to meet the additional demand. The current solution given by the European Commission is to mine new lithium mines and fully exploit local reserves. Guided by this strategic plan, several lithium mining projects have been launched across the EU. But if the bill passes, it will increase costs for processors as tighter rules govern processing, packaging and storage.
Everbright Securities commented that if the bill is passed, the EU will be more stringent on the management of lithium compounds, but the overall use and import should not be affected. The rising cost of domestically produced batteries in Europe will benefit the export of overseas lithium batteries and new energy vehicles.
The draft legislation has already been opposed by lithium producers.
The world’s largest lithium producer $US Albemarle (ALB.US) $ Albemarle has warned on Tuesday that if the European Union lists lithium as a hazardous material, the company may no longer be able to import lithium chloride, the main raw material, thus shutting down its entire plant in Langelsheim. At risk of closure.
Albemarle Chief Financial Officer Scott Tozier said the proposal could ” impede the localisation of the EU battery supply chain as it shifts the process to non-EU regions, creating import demand.”
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