The European Commission is working on implementing acts for the regulation on batteries and waste batteries. However, as the Polish Economic Institute points out in its latest article, things may take a very worrying turn for battery manufacturers in Poland. The point is that during consultations on the methodology for calculating the carbon footprint of manufactured batteries, a postulate appeared to calculate it based on the intensity of electricity production emissions in the country where the factory is located.
Such a decision would have very negative consequences for Polish entrepreneurs.
– assesses the Polish Economic Institute. It notes that the current emission intensity in Poland is the highest of all EU countries. In 2023, it amounted to an average of 660 g CO2e/kWh [CO2e to jednostka pomiaru emisji – red.].
This means that the average carbon footprint of the production process per 1 kWh battery would be close to 40 kg in Poland, while in France it is only 3.5 kg. Adding this to the 45-60 kg carbon footprint that occurs in all previous stages of production, we can translate into a 30-50% difference in the carbon footprint between the same batteries produced in these two countries
– he enumerates and warns: “this may mean that batteries manufactured in Poland will not fit into the upper border carbon footprint established in subsequent implementing acts.”
Poland is a global powerhouse in battery production
The matter is significant, because Poland is one of the global leaders in the industry. We are the second largest battery producer in the world (after China) and the first in Europe. PIE calculates that we are responsible for about 6 percent of global production. The estimated value of the battery sector in Poland in 2022 was PLN 38 billion, compared to only PLN 1 billion in 2017. Batteries are also our very important export “hit”, in 2022 they accounted for over 2.4 percent of all exports. In the first quarter of 2024, it was already over 3 percent (the value of battery exports exceeded PLN 12 billion).
What's more, as economists from PIE note, this market also offers very good prospects. Citing McKinsey forecasts, they indicate that the annual revenue of the lithium-ion battery sector will increase fivefold by 2030, from 85 billion dollars to about 400 billion. Of this, Europe may account for about 30 percent.
In 2023, the European Commission estimated that the battery sector would create up to 4 million new jobs in the EU by 2025.
– add experts from the Polish Economic Institute.
PSNM: This would clearly favor the West
The Polish New Mobility Association, the largest organization in this industry in Poland, has also been concerned in recent days she wrote about the possible consequences of new EU regulations. He argues that “in the worst-case scenario, they may lead to the closure of a number of establishments battery cells in Poland”. He believes that the consulted regulation on the method of measuring the carbon footprint in production would “clearly” favour producers from Member States that already use mainly renewable energy sources or nuclear energy
This would thus close the way to new investments in Poland and other countries of Central and Eastern Europe with a less ecological energy mix, still based primarily on fossil fuels. And while the pursuit of decarbonization of supply chains is a necessity and a direction with which we of course agree, achieving this goal should take place in a fair manner towards countries that, for political and economic reasons, could start the energy transformation much later than Western European countries.
– says Aleksander Rajch, member of the board of PSNM. The organization convinces that of course it sees and supports the need to strive for zero emissions, but nevertheless warns against the effects of the developed regulations on the competitiveness of business – especially in our region of the EU, but de facto in the whole of Europe.
The proposal to calculate the carbon footprint based on the average national energy mix does not take into account the realities of the market and may have a negative impact on the production of lithium-ion batteries in the EU. All the more so because we are still in the process of building a competitive and modern production infrastructure for the battery industry in Europe. Adopting the proposed methodology for calculating the carbon footprint of batteries will result in a loss of competitiveness for most European companies.
– says Yong Girl Lee, Director of the External Relations Department at LG Energy Solution Wrocław.