Region: Europe

  • The challenges for European lithium-ion gigafactory projects

    The challenges for European lithium-ion gigafactory projects

    Thomas Herman, of counsel at law firm Herbert Smith Freehills (HSF), is nonetheless bullish on the potential of European gigafactory projects, pointing to various underlying factors, whilst admitting they have substantial challenges ahead.

    “Europe is interesting because it has plenty of automotive original equipment manufacturers (OEMs) that can provide long-term bankable offtake agreements for projects, which can help them get financing,” Herman tells Energy-Storage.news.

    “The European market also benefits from proximity to reliable power sources, good transportation systems, skilled labour pools and strong public backing for these projects, including through various subsidies through funds.”

    Backing from automotive OEMs is the cornerstone of these projects. Some energy storage systems (ESS) integrators have moved to secure offtake from future gigafactories in Europe – Fluence from NorthvoltPowin from Freyr, and Nidec from Verkor, for example – but these aren’t enough to build a business case.

    “Given the capex involved in a gigafactory project, you cannot build a gigafactory based only an offtake from an energy storage company,” says Herman.

    “Instead, projects are having a main anchor OEM for the bulk of its capacity and then contracting with others (which could be an energy storage company) for the excess. BESS in Europe is still fairly underdeveloped relative to the UK. Financing will be done on the basis of automotive OEM offtakes.”

    One interesting counter-example was the apparent intention of the buyer of failed UK gigafactory firm Britishvolt to pivot away from the automotive sector to making batteries for ESS, and a McKinsey partner discussed the pros and cons of this approach with Energy-Storage.news at the time (March 2023, Premium access).

    This wasn’t specifically mentioned by Herman, but another point to consider alongside the potentially lower size of an ESS companies offtake is their generally relatively lower bankability rating compared to automotive OEMs, which are much larger.

    Even assuming a developer has the necessary bankable offtake partners, there are significant challenges around the financing process itself, securing the necessary raw materials and the obvious question of competitiveness of their battery products once they do enter the market.

    The biggest question is whether lithium-ion batteries produced in Europe will be competitive in the European and global markets, given the US is paying producers US$35 per kWh produced as a tax credit, while production in China is already cheaper.

    Automotive OEMs in Europe are driving gigafactories’ business case in Europe through long-term offtake agreements and, Herman explains, they are making the bet that, although EU-made batteries might be more expensive, eventually the premium that cars made using them can garner will offset that.

    “There are a lot of subsidies into gigafactory projects which will help,” says Herman. “OEMs are also betting that, at some point, environmental, social and governance (ESG) criteria will become a criteria for applying premiums to specific cars, and so cars produced with European batteries become competitive compared to Chinese cars.”

    “But for now, it’s true that this market is being built as we speak. OEMs have to play on two levels. They are entering into contracts with established battery makers in China and South Korea for their current models while also investing with a long-term view in battery production in Europe or through partnerships or offtake agreements.”

    Energy-Storage.news asked Herman if the business case for gigafactories in Europe is now less strong than two years ago, to which he says: “The gigafactory business case has struggled, but these projects take time to develop. The business case continues to evolve but, at some point, it needs to be set in stone and that’s a difficulty.”

    “Its been wagered that the gigafactory projects currently in development will come online quickly enough. The construction schedules are very tight. Lithium-ion is the tech being used right now and OEMs have been designing their cars around this tech.”

    The other big challenge is intimately tied to the above market dynamics and is the fact that OEMs, by backing these projects, are finding themselves in unfamiliar territory by doing so.

    “One of the biggest challenges is the financing. Lenders are keen to ensure the gigafactory company can benefit from a bankable long-term offtake agreement with the OEM. This can create a disconnect, as OEMs are not used to the extensive bankability requirements in the project financing space,” Herman says.

    “When negotiating the offtake agreements, banks and investors may consequently have contrasting views and priorities to the OEMs. The challenge becomes reaching an agreement that works for both sides.”

    There are also challenges around securing raw materials for lithium-ion production such as lithium, nickel, cobalt, manganese and graphite. As is the case in project financing, Paul Morton, another partner at HSF, explains that this a new space for automotive OEMs.

    “Securing access to key raw materials is the challenge for gigafactory projects but also the OEMs,” says Morton. “There security of supply challenge is compounded by the politics around where those are and who is controlling them. Both production and processing is often controlled by a small number of countries, particularly China.”

    “OEMs are looking at increasingly complex and longer-term offtake agreements to secure those volumes, and investment structures that these types of companies have not historically been involved in.”

    On top of that, Morton notes that a “constellation” of stakeholder pressure around sustainability and ESG has arisen in the last few years.

    “There is also a constellation of stakeholder pressures on sustainability, including management of human rights and environmental risks throughout the supply chain, traceability and carbon footprint for car and battery manufacturers that are having a big impact on the way they can procure minerals,” says Morton.

    “Five years ago an offtake contract may have been much shorter and simpler, but now supply chain due diligence obligations (to not only identify but mitigate against environmental and human rights risks) require more complex relationships between seller and buyer. It’s a very different world to be operating in for both producers and offtakers.”

  • Jadar and Rađevina Appraisal: Revealing the Valuation of Strategic Resources and Future Outlook

    Jadar and Rađevina Appraisal: Revealing the Valuation of Strategic Resources and Future Outlook

    The answer to the question of how much Jadar and Rađevina cost has not been provided, nor will it be given as long as the destruction of the landscape and the relocation of the population are considered inevitable damage that has not been assessed, and lithium, known as “white gold,” is considered more valuable than anything else. When something is not assessed, it is considered trivial, or until it is assessed, it has no value (price). This question was raised at a meeting at the Serbian Academy of Sciences and Arts (SANU) titled “Jadar Project – What is known?” Even then, no answer was given, or it was avoided as if Jadar were located on another lifeless planet.

    What was known then, and still remains unclear today, is the approximate technology for obtaining lithium carbonate and borates from the Jadarite ore through leaching with concentrated sulfuric acid. The assessment includes the cost of production, the planned duration of exploitation, and likely the company’s profits from the exploitation. Additionally, it is probable to consider the mining royalty that the state will collect according to existing regulations, which is approximately five percent of the foreign company’s realized profit.

    If we were to elaborate on the initial question, it would be about the value of natural and human-made biological resources on the surface of the mineral deposit, as well as surface and even more so underground water resources that would be extensively used in the lithium extraction process. This value is in comparison to the “white gold” that will primarily benefit the profit of the foreign mining company. The fact that water, as a natural resource, is vital for the future of any society is neglected. Finally, not least, the population that lives and earns a livelihood from these resources is also overlooked.

    Indeed, the complete disregard for the value of biodiversity, ecosystem services provided by natural vegetation, especially forest ecosystems, and agricultural land is concerning, especially at a time when climate disruptions (climate change) are evident as a global problem with increasing challenges for any human community.

    Paradoxically, by ignoring the significance of nature in mitigating the effects of climate disruptions, mega-projects that lead to increasingly visible negative consequences are favored. The problem of accumulating carbon dioxide in the atmosphere, which enhances the greenhouse effect and global warming, cannot be effectively addressed by technologies like carbon dioxide vacuum cleaners or by depositing waste biomass in anoxic parts of the sea (e.g., the Black Sea), which are offered as salvation. Meanwhile, the assimilation potential, which is the only means capable of binding and/or depositing excess carbon dioxide in biomass and soil, continues to be ruthlessly destroyed.

    Not to mention the oceans, which perform this function more efficiently than terrestrial ecosystems, thanks to the enormous surface they occupy. It is now time to recognize that forests, as the most productive part of terrestrial ecosystems, cannot be valued solely based on the quantity of wood mass, but also through functionality. Even from an anthropocentric perspective, considering ecosystem services crucial for every human community whose survival ultimately depends on these services. It is imperative that in the future, they must be comprehensively evaluated, taking into account multiple benefits, and that the practice of belittling, neglecting, and trivializing them must cease.

    Whether we like it or not, human communities at any spatial scale depend on nature, whether it be original or modified over thousands of years of human civilization, primarily through artificial selection of wild plant and animal species for various human needs, especially for sustenance. Not to mention the enormous potential that biological diversity holds. American ecologist Leopold compared biodiversity to a vast library that remains unread, and every day, books are deteriorating and disappearing from its unique collection. Whether the idea of preserving biodiversity and valuing it will become an obligation and prove effective is a big question mark.

    The care for the preservation of nature and biodiversity as its foundation cannot be solely the concern of biologists, ecologists, and nature enthusiasts.

    Past experiences indicate that the idea of sustainability and sustainable development, which is prevalent in various international and domestically adopted documents, is often just a dead letter on paper. The preservation of biodiversity is fundamentally part of the sustainability agenda. In practice, everything goes against this idea – from the exploitation of natural resources as quickly and extensively as possible, with a lack of restraint when it comes to the profit of those who use resources in an uncontrolled manner.

    In that context, the idea of building mines in the Jadar region, as well as all projects that envision and prepare the territory of Serbia as a state for mining and dirty technologies, should be considered. It is not surprising that foreign companies are rushing to Serbia when they see how the state and a significant part of the population treat their own environment. The excuse that this is necessary and that all countries have gone through this Machiavellian phase of natural resource destruction, and that they will only realize later, as society becomes wealthy, that the “devil has taken the joke,” simply does not hold water.

    Advocates for building mines in the Jadar region attempt to minimize environmental damage by pledging adherence to the highest ecological standards in mining, often using the catchphrase “green mining.” Systematically labelling something as “green” when, figuratively speaking, only chlorophyll in plants is green, creates the illusion that the problem either is or will be solved, and this is far from making sense. A more accurate term would be “environmentally responsible mining.” Such practices are rarely implemented globally, and they involve minimizing all damages to the greatest extent possible. For instance, in environmentally responsible mining, the waste material (tailings) generated from processing ore is returned to the exploited part of the mine after treatment. It is clear that such practices significantly increase the costs of exploitation, making it less and less profitable.

    The issues surrounding the construction of mines in the Jadar region cannot be isolated from the behavior of foreign mining companies towards natural resources in other countries, typically former colonies or developing nations. What is happening in Serbia in this regard closely resembles the conduct of foreign mining companies, aided by the stance of the state that everything is up for sale. One only needs to look at the environmental conditions in Bor and Majdanpek and the projected future for the Žagubica area to clearly see the approach of foreign mining companies, especially Chinese ones, regarding environmental protection in Serbia.

    Indeed, such companies often behave as if they are a state within a state. It is worth mentioning that Chinese companies hold around 14% of shares in Rio Tinto. These are all examples of environmentally irresponsible but highly profitable mining practices, the consequences of which will be evident for hundreds of years after exploitation. The remediation or masking of these consequences is not easy, quick, or inexpensive.

    Can someone imagine the environment of Bor and Majdanpek after the completion of exploitation, and the first association not be, looking at the abandoned surface mines, that everything resembles the landscape of a lifeless planet? Or, let’s not consider such massive devastations, but the quarries that sprout in Serbia like mushrooms after rain, and after exploitation, nature is left to revitalize them on its own, which will be a very long and slow process. Behind all these mentioned mining endeavours stands the Big Brother called profit, where what is being destroyed has a price only in the raw material being exploited with the prior consent of the guardian or host, which is the state.

    What’s the reason for such a rush towards Serbia’s mineral wealth?

    The fundamental question naturally arises: why such a rush for Serbia’s mineral wealth? For what reasons do foreign mining companies come to Serbia, and what is it that attracts them so much? I believe the answer is quite simple and boils down to the fact that the state’s attitude toward environmental preservation is the last “missing piece” and is evident at nearly every turn, from air pollution and wastewater, which serves as waste collectors, to garbage dumps and waste scattered in various locations, destruction of nature, lack of law enforcement, poorly conducted environmental impact studies, various projects that exist only on paper, the population’s attitude towards the environment in which they live, and the list goes on, as it would indeed be quite extensive.

    On the other hand, the noticeable dysfunctionality and incompetence of institutions, the lack of transparency in decisions and finances, and the corruption that plagues this society make Serbia a severely ill patient.

    In a nutshell, Serbia is a country where non-transparent agreements often lead to hasty and ill-considered projects. Speaking about the Jadar project with the residents of Gornje Nedeljice, the President of Serbia stated that “we do not have the right to ruin the lives of a greater number of people than originally planned,” directly highlighting how uncritically and thoughtlessly the Jadar project was approved and handed over to Rio Tinto to begin resettlement and persuade the population with neatly packaged propaganda and irresistible offers.

    On the other hand, it is clearly demonstrated what a neglectful attitude the state has towards the environment and natural resources, including the population that lives and earns a living there. In short, everything started haphazardly, as is often the case when there is no clear insight into the technological process and its consequences, except for the declaration that everything will be according to the latest standards, which is a commonplace in Rio Tinto’s propaganda portfolio. The meeting at the Serbian Academy of Sciences and Arts (SANU) highlighted all the deficiencies and ambiguities of this project, especially those involving the actors engaged by Rio Tinto in the preparation of the study, related to the projection of the industrial-mining process and facilities, the disposal of mining waste left after the production of lithium carbonate, as well as the infrastructure of the complex, water borrowing for the process, and so on.

    The experts from the Mining and Geological Faculty and the “Jaroslav Černi” Institute, as expected, unequivocally gave the green light for the mining project, while those from the Biological and Forestry Faculty, who assessed the biodiversity and natural and human-made values on the surface of the mining deposit, gave a negative assessment of this project.

    Serbia must put an end to such thoughtless and superficially assessed projects and consider how it will progress further. In any case, the practice of selling off resources and planning excessive and oversized projects, as is currently happening, should cease. Serbia’s developmental opportunity lies in organizing and improving many aspects of society. To begin with, one of the secure developmental opportunities could be the restoration of the neglected environment, as there is a significant and long-term task ahead in that regard, given the prolonged negligence. At least, let our air and waterways become cleaner, and let’s stop the reckless conversion of agricultural and forest land into construction and industrial areas.

    The case of the planned mine in Jadar is a paradigm of environmentally and socially irresponsible behaviour, which, if realized, would be evidence that the old practice of selling off and managing natural resources continues to the detriment of the harmonious and balanced life of the population that has inhabited and endured in that part of Serbia for centuries, in a beautiful, gentle, and fertile region. Therefore, the value of the Jadar region far exceeds the money from lithium carbonate that Rio Tinto will reap, and which, as is often the case, will leave devastation in its wake after exploitation.

  • KGHM Secures a $450 Million Credit Facility to Cover Operational Costs

    KGHM Secures a $450 Million Credit Facility to Cover Operational Costs

    KGHM Polska Miedź S.A., a leading copper producer, has announced its plan to sign a substantial credit agreement by February 26, 2024. The management board has approved the procurement of a $450 million unsecured revolving credit facility from Bank Gospodarstwa Krajowego. This strategic financial move is aimed at covering the company’s current operational expenses. The credit facility, which will be available for an initial financing period of up to 60 months with an option to extend for an additional 24 months, offers KGHM flexible financial support. For the first 36 months following the signing of the agreement, the credit will function as a renewable line of credit, where each repayment refreshes the available credit limit. After this period, the credit will convert into a term loan, repayable in four equal semi-annual capital instalments, unless an extension is exercised. KGHM has the option to extend the renewable credit line for two additional 24-month periods, with the first extension request possible after 30 months and the second after 54 months. The credit can be utilized in USD, and the funds will be allocated to general corporate purposes. The interest rate for the credit is based on the SOFR benchmark rate plus a margin, which is contingent on the financial ratio of net debt to EBITDA. The other terms of the credit are consistent with standard conditions for such transactions. 

  • Revolutionizing Resource Management: PGE Ekoserwis Leading the Charge

    Revolutionizing Resource Management: PGE Ekoserwis Leading the Charge

    In 2023, PGE Ekoserwis, a subsidiary of the PGE Group, successfully managed 3.5 million tons of residual combustion products. Gypsum, ashes, and slag, byproducts of the combustion process in energy production, found applications across various sectors including construction, agriculture, livestock farming, and mining. This strategic utilization not only conserved natural resources but also minimized the creation of new landfills, consequently reducing carbon dioxide emissions.

    Pioneering Research and Development

    Through its research and development arm, the GOZ Research and Development Center in Bełchatów, along with a team of highly skilled technologists and collaborations with academic and scientific institutions, PGE Ekoserwis has pioneered the development and implementation of high-quality materials and products for diverse applications, notably in the construction sector.

    Sustainable Infrastructure Solutions

    The adoption of alternative materials, derived from ashes and slag generated during coal combustion in energy production, is increasingly prevalent in the construction industry. These materials offer ecological benefits and contribute significantly to reducing the extraction of natural minerals, optimizing resource consumption, mitigating carbon dioxide emissions, and minimizing waste generation.

    Driving Green Initiatives

    Within the PGE Group, prioritizing eco-friendly practices is paramount, with PGE Ekoserwis leading the Closed-Loop Economy (GOZ) segment. This entity specializes in collecting residual combustion products, processing them into high-value construction materials, and ensuring their full integration into various construction projects nationwide.

    Transforming Byproducts into Assets

    In the preceding year, PGE Ekoserwis procured over 800,000 tons of synthetic gypsum, primarily supplying the cement and construction industries. Gypsum, utilized as a fertilizer, contributed to agricultural enhancement and mushroom cultivation. Additionally, it was exported to the Netherlands for construction purposes.

    Versatile Applications in Construction

    Ashes were directed towards cement factories, concrete plants, precast element manufacturers, chemical construction companies, and foundries. Noteworthy applications included road engineering projects such as the A2 motorway and various expressways and bypasses across the country.

    Diverse Utilization Across Industries

    In addition to road construction, the products derived from residual combustion products were instrumental in railway infrastructure projects, environmental remediation efforts, and large-scale engineering endeavors. Hydrotechnical binders supplied by PGE Ekoserwis were vital components in water management and land reclamation projects, including flood protection embankments along the Nysa Łużycka River.

    Leadership in Sustainable Business Practices

    PGE Ekoserwis, with over three decades of experience in managing residual combustion products, offers a portfolio of over 200 certified products derived from both combustion and mining byproducts. These products adhere to stringent environmental standards and undergo rigorous quality assurance m

  • Akobo secures NKr6m bridge loan from shareholders

    Akobo secures NKr6m bridge loan from shareholders

    Scandinavian gold exploration and mining company Akobo Minerals has secured a NKr6-million bridge loan. As part of the ongoing efforts to secure new funding, the company said on February 9 that it had successfully addressed a short-term liquidity requirement and that the bridge financing of NKr6-million has been secured from existing shareholders.

    The proposed loan matures in August 2025 and has an interest rate of 20% a year. The loan may be converted into shares at the next share issue or at the maturity date, subject to certain conditions being met.

    If converted, the conversion of the loan will take place by each lender subscribing for shares through offsetting the loan amount, including accrued interest. The loan, including accrued interest, may be converted into shares at the earliest of the resolution of a private placement of shares, or at the maturity date.

    Akobo said this financial measure provides the company with flexibility to navigate the current landscape and conclude a financial solution that involves all stakeholders in the company.

    Akobo said it remained actively engaged in discussions with relevant stakeholders to explore various long-term financing options to address its overall liquidity requirements.

  • Ukraine: Krasnolimanske buys license for coal deposit in Donetsk region

    Ukraine: Krasnolimanske buys license for coal deposit in Donetsk region

    Krasnolimanske LLC has become the winner of the auction to sell a special license to use subsoil – the mine site No. 1 in Mirnograd, Donetsk region.  The auction was held on February 8 on Prozorro.  Three companies participated in the trade of the lot with the starting price of 2.22 million UAH. The bid of Krasnolimanske in the amount of 4 million UAH won.  The license is valid for 20 years.

  • Portuguese prosecutors seek to annul environment permit for Savannah lithium mine

    Portuguese prosecutors seek to annul environment permit for Savannah lithium mine

    Portuguese prosecutors have asked a judge to annul an environment permit for a lithium mining project being developed by London-based Savannah Resources, alleging various legal infringements, a court document seen by Reuters showed.

    The document, filed by the Prosecutor’s Office in December and seen by Reuters on Thursday, upheld a lawsuit filed by a municipality in northern Portugal that sought to block Savannah from developing what could become western Europe’s largest lithium mine.

    Last year Portugal’s environmental agency APA gave environmental approval, conditional on some remedies, for Savannah Resources to develop a mine in Boticas, in the Barroso region of northern Portugal, a world heritage site for agriculture since 2018.

    The Prosecutor’s Office requested that the Administrative Court of Mirandela in northern Portugal annul the environmental approval of the Boticas mine as it “suffers from the defect of violating the law”, citing risks “known” to APA that the mine could endanger the heritage site and Portugal’s international commitments.

    It also said that APA had failed to correctly assess mining waste management needs or water contamination risks, and did not consider the real joint impact from the Savannah mine and another mine being developed by Portuguese mining company Lusorecursos to extract battery-grade lithium in Montalegre, northern Portugal, despite their proximity and large scale.

    APA did not reply to a Reuters request for comment.

    Savannah said it was “ready to address the concerns” of the prosecutors and cited advice from its lawyers “that the lawsuit is without foundation” and does not impact the project’s activities.

    The Savannah mine was part of a wider probe last year by Portuguese prosecutors into alleged illegalities in lithium and “green” hydrogen deals.

    The probe led to the resignation in November of then Prime Minister Antonio Costa after prosecutors detained his chief of staff and named APA head Nuno Lacasta as a formal suspect in alleged illegalities. Costa and Lacasta have denied any wrongdoing.

    Savannah said in January that after a full legal assessment which included due diligence by independent experts of relevant accounts, facts and documents, “Savannah can confidently reaffirm its solid legal standing.”

    With more than 60,000 tonnes of known lithium reserves, Portugal has been seen as central to Europe’s efforts to secure more of the battery value chain and cut reliance on imports.

    Catarina Alves Scarrott, a campaigner against mining in Barroso, viewed the prosecutors’ move as a victory, but said there was no timing yet for a court decision.

  • Aberpergwm: Eco campaigners appeal in bid to stop coal mine

    Aberpergwm: Eco campaigners appeal in bid to stop coal mine

    A further 42 million tonnes of coal is to be dug up at Aberpergwm mine, near Glynneath, in Neath Port Talbot.

    Climate campaigners lost a legal challenge over the site’s future last year but were granted an appeal.

    Welsh government lawyers argued they had no authority over how the mine’s plans were approved.

    Aberpergwm mine’s licence dates to the 1990s, but was altered in 2013 to expand the maximum area that could be mined in future, subject to conditions.

    In 2020, operator Energybuild applied to the UK Coal Authority to dig part of this wider area.

    The authority decided the company met the conditions and said it had a “legal duty” to allow the work.

    Powers over coal mining operations had been handed from Westminster to Cardiff Bay as part of the Wales Act 2017.

    At Cardiff Justice Centre, Coal Action Network’s lawyers argued this meant ministers could have stepped in to stop extra mining at Aberpergwm.

    The environmental campaigners, who had gathered in front of the court with banners and placards calling for an end to UK coal mining, said it was their “last stand”.

    They urged the Welsh government to “put its climate policies into action”.

    Inside, legal arguments focused on when authorisation for the mine’s expansion came into existence.

    Questions were asked over whether what was proposed constituted a new mine application.

    “Coal operations have never existed and no coal has been taken from the seams in that extended area,” argued Estelle Dehon KC for the campaigners.

    Gregory Jones KC, for the Welsh government, said the Coal Authority could not have “gone back” on the licence, which was authorised before Welsh ministers had any influence.

    “The licence has already been granted, and there’s a package of authorisations and conditions within it,” he said.

    Aberpergwm mine employs 184 people, including 20 apprentices.

    Following the hearing, the Court of Appeal will issue a judgement, which could take several months.

  • EU Green Ambitions Under Siege Amid Red Sea Crisis, Russian Aluminium Ban Fears

    EU Green Ambitions Under Siege Amid Red Sea Crisis, Russian Aluminium Ban Fears

    The European Union has long positioned itself as a global champion of green energy and the world’s battle against climate change. No other region in the world has stricter environmental legislation or has done as much to promote renewable energy sources. Now, the EU’s commitment to the Green Deal is being rigorously tested in the wake of the Ukraine conflict and the anti-Russian sanctions it triggered, as well as the recent escalation in Israel and the Red Sea region.

    These developments are already reshaping the continent’s approach to climate change, particularly in the context of its traditional reliance on Russian aluminium, widely considered one of the most environmentally friendly options in the European market, especially compared to its less green alternatives from Asian markets.

    Despite geopolitical upheavals, most EU countries have actually intensified their renewable plans since 2020. The energy and COVID-19 crises, along with the war in Ukraine, have spurred the green transition in Europe rather than derailing it. EU countries’ climate policies demonstrate a significant shift towards renewable energy: it is now expected that 63% of EU electricity will be produced from renewables by 2030, up from 55% originally envisaged under the previous plan in 2019. This shift would mark a substantial decrease in EU fossil fuel-based power generation, projected to drop to 595 terawatt hours in 2030 from 1,069 TWh in 2021.

    The ambitious green transition is not a one-way street for Europe, however, as the movement is facing a pan-European challenge. Countries like Italy, the United Kingdom and the Netherlands have shown signs of pushback against various EU initiatives aimed at greening the economy. This resistance, termed “greenlash,” is driven by factors ranging from economic pressures to political dynamics. Italy, for example, has sought to water down certain EU directives. In the Netherlands, the rise of the BBB party, opposing the government’s environmental policies, signifies growing discontent with the green agenda. At the same time, Britain’s recent fossil fuel projects have also raised questions about its commitment to climate goals.

    With Europe on the brink of recession, it is increasingly hard to “sell” costly green initiatives to the dissatisfied voters who are already dealing with the daily pressures of inflation and rising geopolitical risks. The sanctions already imposed on Russia, historically one of Europe’s key trade partners, for its role in the Ukraine crisis have severely diminished bilateral commerce and to a large degree backfired against European producers and consumers.

    While the Ukraine crisis is quickly approaching its 2-year mark, the new geopolitical hotspot in the Red Sea is adding additional pressure on the strained European economy. The halt of navigation in what is one of the world’s most important transportation routes, representing roughly 12 percent of global container traffic, means increased time (by adding about 10 days to trip duration if an alternate route around Africa is taken) and costs for consumers. For Europe this translates into higher import costs for such key industrial materials as aluminium, as well as for energy.  Longer travel times also mean more environmental impact for EU-made products, undermining the continent’s green economy goals.

    Russian aluminium, considered a greener option due to its lower carbon footprint, still plays a significant role in Europe’s industrial and environmental strategies. The potential sanctioning of Russian primary aluminium – long favored by some EU politicians and pundits despite strong economic risks – poses a significant dilemma amidst these crises. Due to high energy and labour costs, the EU’s own aluminium production is in steady decline and now accounts for only about 11 percent of its total demand.

    Multiple sanctions introduced against the Russian economy have done nothing to force Russia to change its course on Ukraine. When considering whether to expand them to also include a ban on aluminium EU policymakers must be fully aware of the environmental impact of losing a key source of green aluminium that cannot be easily replaced.

    This underscores the importance of strategic foresight in policymaking to ensure that Europe’s green ambitions remain robust and responsive to an ever-changing global landscape. As Europe navigates through these turbulent times, the balancing act between maintaining its green agenda and responding to geopolitical developments becomes more challenging. The decisions made in the coming months will not only shape Europe’s environmental policies but also reflect its resilience and adaptability in the face of global challenges.

  • Serbia signs €2bn renewable energy deal with Chinese companies

    Serbia signs €2bn renewable energy deal with Chinese companies

    By bne IntelliNews January 27, 2024

    Serbian Minister of Mining and Energy Dubravka Djedovic Handanovic signed a memorandum of understanding (MoU) with two Chinese companies regarding investments in renewable energy sources on January 26. The investment amounts to approximately €2bn, with Shanghai Fengling Renewables being the principal investor.

    The agreement signed with Shanghai Fengling Renewables and Serbia Zijin Copper, in which Serbia holds a co-ownership stake, is the start of Serbia’s largest-ever project in the realm of renewable energy.

    The ambitious project envisions the establishment of a plant near Bor, with total capacity of 2GW.

    It includes the construction of a wind power plant generating 1,500 MW, a solar power plant with a capacity of 500 MW and the creation of a factory for green hydrogen production capable of producing around 30,000 tonnes annually.

    Djedovic Handanovic highlighted that the generated energy will primarily cater to the production needs of Zijin, a major Serbian exporter that has significantly expanded its operations, particularly following the completion of the Bor smelter reconstruction.

    Djedovic Handanovic announced that the construction of the plant is scheduled to start in the first quarter of next year, with the first phase targeting 700 MW set to be completed by mid-2026.

    The goal is to finalise the entire project, achieving the full 2,000 MW and the green hydrogen production capacity of 30,000 tonnes per year, by the end of 2028.

    This initiative is poised to generate between 300 to 500 new jobs, predominantly in the renewable energy sector.

    With this strategic partnership, Serbia is set to emerge as a major hub for the production and equipment of renewable energy projects, including green hydrogen. The project is also expected to play a crucial role in advancing Serbia’s energy security and independence goals, aligning with the country’s ambition to achieve carbon neutrality by 2050.