Balancing Green Technology and Environmental Impacts: The Implications of Europe’s Critical Raw Material Policy for Electric Vehicles

By: Emily Hutchins

April 24, 2023

On March 16, 2023, the European Commission proposed measures to strengthen its domestic supply of “critical raw materials,” which are crucial for the transition to a carbon-neutral economy. The growing demand for the minerals and metals necessary to manufacture electric vehicles (“EV”) batteries including lithium, cobalt, and nickel, has raised concerns around the environmental and social impacts of their extraction. In the United States, the demand for lithium alone is expected to triple the current global production. Rapidly increasing demand has made it increasingly clear that strict oversight will be necessary to prevent significant environmental harm and social repercussions at a large scale.

The European Raw Materials Initiative is part of a broader effort to reduce the European Union’s (“EU”) dependence on foreign sources of critical raw materials. The EU currently imports 98% of the critical raw materials it uses, leaving it vulnerable to supply disruptions and price volatility. By increasing domestic production and recycling materials, the policy is aimed at creating a more secure and sustainable supply chain for its industries. The initiative focuses on promoting sustainable mining practices, improving efficiency and recycling, and minimizing the environmental impact of mining activities. Currently, new mining projects in Europe can take up to 15 years to obtain approval, but the proposed legislation aimed at curbing Europe’s foreign energy dependance hopes to shorten the permitting approval deadline to two years. Despite these promises, the initiative has been met with criticism from those who criticize mining as equally damaging as fossil fuels, which electrification aims to replace. 

The mining industry has historically been associated with environmental harms including habitat destruction, water pollution, and greenhouse gas emissions. However, the industry will play a critical role in implementing the Commission’s new policy. In order to address environmental concerns, the industry has begun taking steps to mitigate its environmental impact through sustainable mining practices, such as reducing waste and energy consumption, using renewable energy sources, and implementing biodiversity conservation measures. The World Bank has also championed the idea of “climate-smart mining”, which aims to reduce the mining industry’s carbon footprint and promote sustainable development practices.

Even with safeguards, the demand for minerals and metals needed for EVs poses a unique environmental challenge for the mining industry. According to a McKinsey report, the production of battery metals will need to increase by 20 times current levels by 2050 in order to meet the growing demand for EVs. This massive increase in production will require new mines to be opened, which will likely result in additional environmental impacts. To combat widespread harm, governments will need to ensure environmentally sound practices are being implemented. 

Lithium mining has come under fire for its potential to deplete and pollute water sources. The mining process requires vests amounts of water, and in regions such as the Atacama Desert in Chile, this has led to the depletion of local water sources and negative impacts on local communities. This environmental harm has emerged despite high taxes and strict mining regulations in Chile, highlighting the difficulty of effectively regulating the industry. Similarly, cobalt mining has been associated with issues such as child labor and human rights abuses in the Democratic Republic of Congo, which produces approximately two-thirds of the world’s cobalt. To protect human rights and the environment, the industry must implement responsible sourcing practices and ensure that these resources are produced in a socially and environmentally sustainable manner. These practices can include payments to governments, local employment opportunities, infrastructure development, and community investments.

Despite these challenges, the transition away from fossil fuels continues to be critical in mitigating the impacts of climate change. According to a report by The Breakthrough Institute, without significant increases in the production of battery metals, it will not be possible to meet the growing demand for EVs and reduce global greenhouse gas emissions. Therefore, a reduction in mining is highly unlikely and instead the focus must be on sustainable mining. This includes ensuring that new mines are opened in regions where there is minimal risk of negative environmental impacts and working with local communities to ensure that their rights and livelihoods are protected. In addition, the industry must implement transparent and traceable supply chains to ensure that these minerals and metals are produced in a socially and environmentally sustainable manner.

While the European Commission’s proposed Raw Materials Initiative aims to address demand concerns, it must balance industry growth with environmental preservation through sustainable and responsible mining practices.

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