First rule of critical minerals club: US, EU looking to make a deal
(2023/02/08)
- Reference: 1675877405
- News link: https://www.theregister.co.uk/2023/02/08/us_and_eu_critical_minerals/
- Source link:
The US and Europe could be moving towards another area of cooperation, this time over critical minerals needed for electric vehicles and other technologies, with the creation of a de facto free-trade status for such resources.
Representatives from France and Germany have met with key US officials during a visit to Washington, and reports say a proposal was floated of a “critical minerals club” to include America and Europe, amid concerns that the US Inflation Reduction Act could penalize non-US companies developing green technologies.
The [1]Inflation Reduction Act aims to give a boost to US industry and bring down inflation by investing in domestic energy production, especially clean energy. But it has sparked fears that it will disadvantage European companies developing green technology. For example, it requires that a certain amount of components or critical minerals for electric vehicles be sourced in the US or from countries that have a free trade agreement with it, which does not currently include Europe.
[2]
The meeting in Washington was officially to reinforce the United States’ commitment to the transatlantic economic partnership, and saw US Secretary of Commerce Gina Raimondo and Secretary of the Treasury Janet Yellen hosting German Vice Chancellor and Minister of Economic Affairs and Climate Change Robert Habeck, plus France's Minister of Economy, Finance, and Industrial and Digital Sovereignty Bruno Le Maire.
[3]
[4]
As reported by the [5]Wall Street Journal , it was Habeck who proposed creating a “critical minerals club” with the US, with the goal of diversifying supplies of critical minerals and finding ways to reduce reliance on countries such as China, which is a key supplier of some minerals such as lithium, cobalt, nickel and graphite that are used in high-tech industries.
[6]DoE supercomputing centers get $1.5B boost from Biden administration
[7]Energy being expensive and trickier to source is good news ... for renewables
[8]UK cuts China from Sizewell nuclear project, takes joint stake
[9]Tesla rival Rivian posts losses of $1.7b, with worse to come
Another goal appears to be to have European companies given regulatory equivalence with US manufacturers when it comes to green technologies, so they are not excluded from Inflation Reduction Act subsidy spending.
'Lithium and rare earths will soon be more important than oil and gas'
According to the [10]Financial Times , Le Maire said the aim was to ensure “as many European components as possible are included in the framework of the IRA, so they can benefit from the tax credits and subsidies that will be given to American products.” Adding, “I am thinking of electric vehicles, batteries, critical materials.”
The EU’s executive body, the European Commission last year proposed the [11]European Critical Raw Material Act to address the issue of key minerals in many high-tech industries.
“Lithium and rare earths will soon be more important than oil and gas,” EC president Ursula von der Leyen said at the time. “Our demand for rare earths alone will increase fivefold by 2030…we must avoid becoming dependent again, as we did with oil and gas.”
[12]
She pointed to China, with its “quasi-monopoly on rare earths and permanent magnets” while other nations such as the USA Japan and South Korea were deploying sizable investments to lessen their dependence on such sources.
The goal of the European Critical Raw Material Act is to create a European network of raw materials agencies, and take steps to meet as much as possible of European demand for critical minerals from local sources. At least 30 percent of the EU's demand for refined lithium should originate from the EU by 2030, Von der Leyen said.
Meanwhile, Indonesia is looking to exploit its position as the nickel capital of the world to set up a cartel with other like-minded mining empires, similar to the way OPEC joins forces to control the global crude oil market, as The Register [13]reported last year.
[14]
Also discussed at the Washington meeting was the importance of the US-EU [15]Trade and Technology Council (TTC) , a forum set up to coordinate transatlantic approaches to global trade, economic, and technology issues between the two.
Raimondo commented on the progress made through the TTC on semiconductor supply chains, according to a Commerce Department statement, citing arrangements on to promote transparency on incentives to the private sector and to exchange information on potential disruptions of shared concern in the semiconductor supply chain. ®
Get our [16]Tech Resources
[1] https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[5] https://www.wsj.com/articles/european-officials-push-for-joint-effort-with-u-s-on-green-technology-minerals-11675811969
[6] https://www.theregister.com/2022/11/07/doe_supercomputering_grant/
[7] https://www.theregister.com/2022/12/07/renewables_will_become_largest_energy/
[8] https://www.theregister.com/2022/11/30/uk_energy_storage/
[9] https://www.theregister.com/2022/11/10/rivian_q3_losses/
[10] https://www.ft.com/content/036a0564-fa7f-4043-83aa-8fe57000c50c
[11] https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_5523
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[13] https://www.theregister.com/2022/10/31/car_battery_cartel_proposal/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2022/05/16/ttc_paris_meeting/
[16] https://whitepapers.theregister.com/
Representatives from France and Germany have met with key US officials during a visit to Washington, and reports say a proposal was floated of a “critical minerals club” to include America and Europe, amid concerns that the US Inflation Reduction Act could penalize non-US companies developing green technologies.
The [1]Inflation Reduction Act aims to give a boost to US industry and bring down inflation by investing in domestic energy production, especially clean energy. But it has sparked fears that it will disadvantage European companies developing green technology. For example, it requires that a certain amount of components or critical minerals for electric vehicles be sourced in the US or from countries that have a free trade agreement with it, which does not currently include Europe.
[2]
The meeting in Washington was officially to reinforce the United States’ commitment to the transatlantic economic partnership, and saw US Secretary of Commerce Gina Raimondo and Secretary of the Treasury Janet Yellen hosting German Vice Chancellor and Minister of Economic Affairs and Climate Change Robert Habeck, plus France's Minister of Economy, Finance, and Industrial and Digital Sovereignty Bruno Le Maire.
[3]
[4]
As reported by the [5]Wall Street Journal , it was Habeck who proposed creating a “critical minerals club” with the US, with the goal of diversifying supplies of critical minerals and finding ways to reduce reliance on countries such as China, which is a key supplier of some minerals such as lithium, cobalt, nickel and graphite that are used in high-tech industries.
[6]DoE supercomputing centers get $1.5B boost from Biden administration
[7]Energy being expensive and trickier to source is good news ... for renewables
[8]UK cuts China from Sizewell nuclear project, takes joint stake
[9]Tesla rival Rivian posts losses of $1.7b, with worse to come
Another goal appears to be to have European companies given regulatory equivalence with US manufacturers when it comes to green technologies, so they are not excluded from Inflation Reduction Act subsidy spending.
'Lithium and rare earths will soon be more important than oil and gas'
According to the [10]Financial Times , Le Maire said the aim was to ensure “as many European components as possible are included in the framework of the IRA, so they can benefit from the tax credits and subsidies that will be given to American products.” Adding, “I am thinking of electric vehicles, batteries, critical materials.”
The EU’s executive body, the European Commission last year proposed the [11]European Critical Raw Material Act to address the issue of key minerals in many high-tech industries.
“Lithium and rare earths will soon be more important than oil and gas,” EC president Ursula von der Leyen said at the time. “Our demand for rare earths alone will increase fivefold by 2030…we must avoid becoming dependent again, as we did with oil and gas.”
[12]
She pointed to China, with its “quasi-monopoly on rare earths and permanent magnets” while other nations such as the USA Japan and South Korea were deploying sizable investments to lessen their dependence on such sources.
The goal of the European Critical Raw Material Act is to create a European network of raw materials agencies, and take steps to meet as much as possible of European demand for critical minerals from local sources. At least 30 percent of the EU's demand for refined lithium should originate from the EU by 2030, Von der Leyen said.
Meanwhile, Indonesia is looking to exploit its position as the nickel capital of the world to set up a cartel with other like-minded mining empires, similar to the way OPEC joins forces to control the global crude oil market, as The Register [13]reported last year.
[14]
Also discussed at the Washington meeting was the importance of the US-EU [15]Trade and Technology Council (TTC) , a forum set up to coordinate transatlantic approaches to global trade, economic, and technology issues between the two.
Raimondo commented on the progress made through the TTC on semiconductor supply chains, according to a Commerce Department statement, citing arrangements on to promote transparency on incentives to the private sector and to exchange information on potential disruptions of shared concern in the semiconductor supply chain. ®
Get our [16]Tech Resources
[1] https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.wsj.com/articles/european-officials-push-for-joint-effort-with-u-s-on-green-technology-minerals-11675811969
[6] https://www.theregister.com/2022/11/07/doe_supercomputering_grant/
[7] https://www.theregister.com/2022/12/07/renewables_will_become_largest_energy/
[8] https://www.theregister.com/2022/11/30/uk_energy_storage/
[9] https://www.theregister.com/2022/11/10/rivian_q3_losses/
[10] https://www.ft.com/content/036a0564-fa7f-4043-83aa-8fe57000c50c
[11] https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_5523
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2022/10/31/car_battery_cartel_proposal/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y@QpkYPwCDf-hZKYLOA@TQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2022/05/16/ttc_paris_meeting/
[16] https://whitepapers.theregister.com/
Re: What about Canada and Mexico?
pdh
The article says "it requires that a certain amount of components or critical minerals for electric vehicles be sourced in the US or from countries that have a free trade agreement;" that sounds like it already includes Mexico and Canada via the NAFTA.
Re: What about Canada and Mexico?
Youngone
It seems to me that America was super keen on free trade until it didn't suit them suddenly, when China did that thing that Marx warned everyone about, and started to use capitalism against itself.
China priced some of these elements at a low enough price that the competition closed down which is capitalism 101. If America wants to compete I suppose they'll have to match the subsidies China has.
What about Canada and Mexico?
They should probably be included too, both have a lot of land area where new sources of critical minerals might be found. For Mexico, in particular, anything that helps grow their economy helps reduce the incentive for its people to want to illegally migrate to the US (or for those fleeing central American countries to want to come to the US instead of stopping in Mexico) so it should have support from republicans who want to reduce illegal (or lets face it, all) migration to the US on the southern border.