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Vianode CEO criticizes EU’s Raw Materials Act for inadequate industry support

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The EU’s landmark Critical Raw Materials Act (CRMA), which officially came into effect on May 23, is being criticized for its lack of substantial support for Europe’s emerging battery materials sector. Burkhard Straube, CEO of Norway-based Vianode, voiced his concerns in an interview with Fastmarkets on June 6, describing the Act as “without teeth.”

Straube’s critique underscores the challenges faced by Europe in securing its supply chains for critical raw materials amid growing global competition. Norway, while not an EU member, is part of the European Economic Area (EEA), allowing it access to the EU market.

Insufficient protection for emerging industries

Straube highlighted that despite the CRMA’s intentions, it falls short in providing the necessary protection and support for nascent industries, particularly those producing battery anode materials like synthetic graphite. He stressed the importance of substantial support mechanisms, which he believes are currently lacking. The CRMA aims to streamline regulatory processes for new projects and proposes a strategic framework for establishing stockpiles, but Straube argues that these measures are insufficient to ensure the development of a robust local supply chain.

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Vianode, set to begin full-scale production later this year, is ramping up its synthetic graphite output to meet the growing demand from the electric vehicle (EV) sector. The company projects that its initial capacity will suffice for approximately 25,000 EVs annually, with expectations of synthetic graphite demand in Europe doubling by 2029.

Europe’s competitive disadvantage

Straube expressed concern over Europe’s competitive disadvantage compared to the US and China, both of which have aggressive policies supporting their domestic industries. The CRMA’s classification of synthetic graphite as “strategic” is a step in the right direction, but the potential for reassessment in three years creates uncertainty that could hinder long-term investments.

Corina Hebestreit, secretary general of the European Carbon Graphite Association, welcomed the classification. However, Straube emphasized that Europe needs to focus on creating attractive conditions for building synthetic graphite capacity and that the current legislative framework does not address this need adequately.

Need for scale and market support

Straube argued that European financial support has been too focused on fostering innovation rather than scaling up production capacity. He pointed out that the US, through measures like the Inflation Reduction Act (IRA), provides substantial support for scaling up critical material production, drawing manufacturers to prioritize the US market over Europe. This shift is evident as many original equipment manufacturers (OEMs), cell manufacturers, and anode and cathode producers are now targeting the US market for their expansion projects.

The CRMA’s goals include achieving a domestic extraction capacity of 10% of overall EU consumption for critical materials, with 40% for intermediate processing and 25% for recycling. The Act also aims to prevent reliance on any single third country for more than 65% of annual supply of any strategic raw material. However, Straube questioned whether these targets are sufficient to foster a competitive European supply chain.

Environmental and market considerations

Straube also highlighted the potential environmental benefits of Vianode’s production process, which reportedly has a significantly lower carbon footprint compared to traditional graphite production. With the upcoming European battery regulation requiring the disclosure of production emissions, Vianode’s more sustainable production methods could give it a competitive edge.

Despite his criticisms, Straube remains optimistic about Vianode’s growth prospects. The company is planning to establish a large-scale facility in North America, aiming to support the decarbonization of up to three million EVs by 2030. This expansion aligns with Vianode’s vision of contributing to sustainable industry practices and reducing the environmental impact of EV production.

Conclusion

Straube’s comments reflect a broader sentiment among European industry leaders who are calling for more robust support and protection for emerging sectors within the EU. The CRMA, while a positive step towards securing critical raw materials, needs to be complemented by policies that promote scale and competitiveness to ensure Europe’s battery materials industry can compete on a global stage.

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