Web conference: Sustainable batteries for electric vehicles?
European due diligence legislation and EU trade policy – held on 2 June 2021
You can find the English video of the conference here:
German version of the video:
Bahasa Indonesian version:
The European Green Deal that was presented in December 2019 has driven EU discussions about clean mobility solutions. Battery-powered electric vehicles are considered to be 'eco-friendly' vehicles involving low emissions for their local area.
However, it is clear that the production of electric cars, their batteries, and the extraction of raw materials such as lithium and nickel generate a significant ecological footprint.
According to the European Commission, for electric-vehicle batteries and energy storage, the EU would need up to 18 times more lithium than the current supply across the EU by 2030, with this rising to almost 60 times by 2050.
Lithium for producing electric-vehicle batteries comes mainly from Latin America and accounts for 50 percent of global production. One significant problem there is the negative impact of water extraction on the nearby arid ecosystems in the Andes.
Currently the principal source of nickel, one of the main raw materials in electric batteries, is Indonesia, a country where social and environmental exploitation looms large, with air and seawater pollution posing a particular threat. In view of the growing demand, Indonesia senses an opportunity to help its industry break through. The Indonesian government no longer wants to act only as a supplier of raw materials, but to process the sought-after metal within the country's borders.
On 10 March 2021, the European Parliament called for binding EU due diligence legislation relating to the supply chain to be passed as a matter of urgency to ensure that companies are held accountable and liable if they fail to respect, or if they contribute to any adverse impact on, human rights, the environment and good governance. It should also guarantee that victims have access to legal remedies. The European Commission has announced that it will present its legislative proposal in this regard later this year.
The planned trade agreement between the EU and MERCOSUR will have a significant effect on conditions surrounding mining, processing and trading of raw materials, such as lithium in Argentina. For example, measures from national governments aimed at restricting exports will be jeopardised if the EU-MERCOSUR trade agreement comes into force.
These issues were discussed at the conference by and with the following speakers:
Helmut Scholz, member of the European Parliament – The Left group; Melisa Argento, University of Buenos Aires (Argentina); Pius Ginting, AEER (Indonesia); Risdianto, Morowali Independent Union (Indonesia).
Helmut Scholz emphasised the importance of sustainability and compliance with environmental standards in mining raw materials for batteries, especially given the rapidly growing demand for nickel and lithium. He said that, although a study commissioned by the Club of Rome entitled The Limits to Growth had been published back in 1972, companies in the automotive and energy industries had, for decades, continued to deny climate change – and that financial capitalism was exacerbating the climate catastrophe still further. The EU, the United States and China had announced Green Deals which were supposed to bring about an ecological transformation, but the question was how this could be achieved without curbs being placed on either industrial production or mobility.
Companies and industrialised countries were being reckless and colonialistic in demanding access to the raw materials required for such a transformation. The industrialised countries were asserting their right to these raw materials, with the EU, China and the United States vying for the best access. For example, the European Commission had just referred Indonesia to the World Trade Organization (WTO) for a nickel export ban introduced by that country's government. The aim of the Indonesian government here was to boost Indonesian companies' share in the production chain – which was, according to Helmut, clearly an entirely legitimate industrial policy stance on its part.
When negotiating free trade agreements, EU negotiators, for example, had always sought to avoid the collection of export duties by trade partners. This could currently be seen, for instance, in the negotiations between the EU and Chile, with the European Commission arguing that access to lithium in Chile was particularly important for the EU, especially in the face of competition from China. All of this made it even more vital to now pass European due diligence legislation relating to the supply chain, placing the focus on compliance with human rights and environmental standards, because something must be done to dampen the prevailing Gold Rush-like tendency towards the mining of raw-material resources, e.g. for the construction of wind turbines.
Thus the EU-MERCOSUR trade agreement was likely to facilitate European companies' access to raw materials in Argentina, Paraguay, Brazil and Uruguay and to increase overexploitation in the mines. All 17 UN Sustainable Development Goals (SDGs) must be implemented by 2030, and the EU must not achieve its goals at the expense of other parts of the world. The COVID-19 pandemic alone showed these various regions' interdependency and how important global initiatives were for green economic activity. Poverty affected the majority of the world's population, making it essential to ensure universal access to education, healthcare, housing and decent work. This also implied that Europe could not require the rest of the world to stop production, meaning that inclusive growth or even degrowth was all the more vital. Helmut rounded off by making the point that new partnerships between regions could also help to electrify parts of our economy, namely by generating renewable energy and green hydrogen.
Melisa Argento from the University of Buenos Aires (Argentina) explained that many parts of the Lithium Triangle (Argentina, Bolivia and Chile) lived off tourism and also mining. The population groups and communities affected by lithium mining had long highlighted its negative ecological impacts and had seen their rights violated: no consultations had been held with local residents before the start of such mining, which had led to the further salinisation of freshwater. An aggressive strategy of mining for components for electric vehicles and the electronics sector had been a problem for years, but now what could only be described as 'lithium fever' had broken out, resulting in completely unfettered mining of this raw material.
The International Energy Agency had calculated that the demand for lithium had skyrocketed by a factor of 42 in recent years. In Argentina, there were virtually no restrictions on lithium exports, with politicians at national level in fact having little scope for regulation because imposing such restrictions was the responsibility of the country's provinces. However, there was strong pressure from international companies to permit unrestricted lithium exports. Unfortunately, there had not yet been adequate studies documenting the gradual but sustained damage to aquifers and ecosystems, and their fragile equilibrium.
Waste from lithium mining posed a similar problem, and the high cost of restoring the landscape after mining represented an additional burden, as did the particulates released into the atmosphere, compromising the health of local residents. Unfortunately, more specific health impacts had not yet been investigated. Given these problems, there was all the more need for a critical assessment of lithium mining for electric batteries. This critical approach should also be taken to the 'green capitalism for a green transition' rationale, as well as the shift to e‑mobility, because for many local communities the situation could now be summed up with the words 'Water is worth more than lithium'. Instead, the companies concerned should take up their social responsibility, because the affected rural communities, living far away from urban centres, were at the mercy of mining companies and had little chance to assert their social rights.
There must be compliance with the legislation already in place, tightening of existing regulations and expansion of the population's consultation rights, with particular consideration being given to the rights of indigenous peoples at local, regional and national levels. Moreover, steps must be taken to ensure that more of the value chain related to mining was kept local, i.e. in the relevant countries, by processing the raw materials domestically. Furthermore, the revenues generated must be distributed among the local communities affected by mining. Turning her attention to the planned EU-MERCOSUR free trade agreement, Melisa made it clear that this would further increase the pressure for mining and that more and more cars would be imported from the EU into MERCOSUR states. The current pandemic showed that what we actually need is a trade policy that anchors value chains locally and leads to a deconcentration of production.
Pius Ginting from AEER (Indonesia) referred to two relevant Rosa-Luxemburg-Stiftung publications on nickel mining: Road to Ruin (from October 2019) and Fast and Furious for Future (from April 2021) (see https://www.rosalux.de/en/profile/es_detail/AJ2ZM3GU9L/pius-ginting?cHash=1124cda3b03b01c8e6b502e56b9a056e).
He stressed that Indonesia should not only be a supplier of raw materials and could definitely increase its own battery production capacity. However, this would require compliance with environmental protection and social standards when mining and processing nickel. The switch to e‑mobility would have a massive impact on Indonesia, as this country was home to 25 percent of global nickel reserves. A problem here was the disposal of the ore residues (tailings) arising from nickel production, because up to now they had just been dumped in the sea, posing a risk to, for example, the coral reefs and the extraordinary biodiversity in the region. Sensible tailing management was therefore needed to avert such effects.
Furthermore, the tailings threatened local fishing communities, demonstrated by the fact that fishery stocks were already declining and those working in this sector were being forced to go further and further offshore to make their catches. Plans were afoot for one of the largest nickel processing plants to be built in this fishing community soon – something which would have an impact on every aspect of life for local residents. The Morowali Industrial Park had already turned the once crystal-clear blue sea brown.
In addition, the expanding nickel production threatened protected areas of forest, thereby undermining the livelihoods of indigenous peoples. The issue of energy production was also crucial here: coal-fired power had so far been used for nickel production and processing, and new coal-fired power plants were on the cards. The population was already feeling the health impacts, with a significant increase in respiratory diseases since 2019. Therefore, it was absolutely crucial to switch to renewable energy sources. In a welcome development, a Chinese company was now planning to use wind and solar energy to power the Morowali Industrial Park, but there was also a need to give these maritime areas protected status, and for tailings to be dealt with in the mining regions where they were produced, because simply dumping these residues on land – while this, too, had its risks – was better than doing so at sea. Pius finished off by saying that the need to protect sea- and land-based livelihoods was particularly important for people who were too old to work in the mining sector.
Risdianto from the Morowali Independent Union (Indonesia) stated that Morowali was now the benchmark for future battery production systems. The nickel industry, one of the world's most vital sectors, was currently experiencing a major upswing from the switch to e‑mobility. The Indonesian government supported this industry with targeted programmes, but workers were not enjoying any benefits in terms of their welfare – on the contrary, in fact, as there were considerable problems with health and safety at work. In short, working in these plants was simply not safe. In 2019, for example, over 1,100 accidents were recorded, some of them even fatal, and yet no improvements had been made to occupational safety.
Nickel processing had a negative impact on people both inside and outside the plant: inside, workers were exposed to fine particulates and ash, while outside, the coal-fired power plants also polluted the atmosphere. The respiratory masks provided for workers did not have appropriate filters, meaning that ash could get straight into their lungs and so nobody could work there for more than seven to nine years. The union had also specifically collected data on this.
Moreover, the food provided to workers was of poor quality, which posed a further health risk. Companies had also used the COVID-19 pandemic as an excuse for extending working hours beyond the statutory limit of 40 hours per week. This and the pressure to work unpaid overtime broke Indonesian law. Given the high levels of unemployment in Indonesia, workers were forced to give in to this pressure. This made it even more important for the international community to support the Indonesian trade unions in their struggles.
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