As European automakers intensify their shift to electric vehicles (EVs), the demand for lithium—the essential material used in EV batteries—is surging. With China dominating global lithium mining and refining, European car manufacturers are scrambling to secure reliable sources of the critical metal. In response, an Australian firm, Vulcan Energy, has unveiled a new project in Germany that promises to help alleviate the continent’s lithium supply challenges.
Vulcan Energy’s plant, located near the town of Oberhausen in western Germany, is set to begin extracting lithium from geothermal brine deep beneath the Rhine Valley. The refinery, currently in its pilot phase, plans to produce lithium hydroxide, a key component for the production of lithium-ion batteries used by major automakers such as Volkswagen, Renault, and Stellantis. The company’s method, which taps into the naturally heated underground brine, offers a promising alternative to traditional mining.
The extraction process takes place about two kilometers (over a mile) underground, where geothermal energy is harnessed not only to produce lithium but also to generate heat. The excess energy from the brine will be used to supply local homes, furthering the sustainability credentials of the project.
“This refinery is a crucial step toward Europe’s independence in securing critical raw materials,” said Francis Wedin, senior executive at Vulcan Energy, emphasizing the plant’s role in bolstering Europe’s energy transition and lithium supply chains.
Currently, Europe’s lithium battery sector is still in its infancy, grappling with slow growth and mounting competition from China, which controls much of the global refining capacity. However, Vulcan Energy is optimistic that its plant will play a pivotal role in scaling up Europe’s lithium production, helping to meet the continent’s rapidly rising demand for EVs and aligning with EU efforts to reduce dependence on foreign mineral sources, particularly from China.
With the EU’s 2035 deadline for phasing out new internal combustion engine (ICE) vehicles fast approaching, the pressure on car manufacturers to secure a steady supply of lithium has never been higher. The European Commission is keen to reduce the bloc’s reliance on non-European suppliers for critical raw materials, a goal that includes boosting domestic production of lithium, cobalt, and other essential minerals.
Vulcan Energy’s refinery is expected to begin commercial production in 2027, with the German government offering significant financial support—€100 million (about $106 million) in subsidies—to help make the project a reality. If successful, the venture could play a key role in Europe’s push to establish a competitive, self-sufficient lithium battery industry and achieve its green energy goals.
As the global race for lithium intensifies, European automakers are hoping that projects like Vulcan Energy’s will provide a sustainable, homegrown solution to supply their EV battery needs—ensuring that the continent can compete in the emerging green energy market while reducing its dependence on foreign powers.
