The French government has announced a €2bn fund to finance the production of critical metals, which are essential to the manufacture of batteries for electric vehicles (EVs), wind turbines, and solar panels. In France, the announcement comes as global demand for these metals is rapidly increasing, driven by the transition towards renewable energy sources and the electrification of transport.
Promoting the production of critical metals
French President Emmanuel Macron has called for a “European sovereignty” over the production of critical metals and has pledged to reduce the continent’s dependence on China, which currently produces over 60% of the world’s rare earth metals. The fund will finance research and development, exploration, and the construction of new mines and recycling facilities in France, Europe, and Africa.
Creating a secure supply chain for the energy transition
The goal of the French fund is to create a secure supply chain for the energy transition, as well as to support the development of the circular economy. The production of critical metals is often associated with environmental and social risks, such as water pollution, land degradation, and human rights violations. The French government has emphasized that the fund will prioritize sustainable and responsible production, with a focus on reducing the environmental and social impact of mining and recycling activities.
Addressing the EV revolution
The fund is particularly aimed at addressing the rapid growth of the EV market. France aims to have 11 million EVs on its roads by 2030, up from around 330,000 in 2020. The production of EV batteries requires a range of critical metals, including lithium, cobalt, nickel, and manganese. France aims to produce 60% of the critical metals required for its EV batteries by 2025, up from around 30% currently.
Collaborating with neighboring countries
The French government also plans to collaborate with neighboring countries to promote the production of critical metals in Europe. In March, Germany, France, and Poland launched a project to develop a secure supply of rare earth metals within the EU, as part of a broader strategy to reduce the bloc’s dependence on China.
The €2bn fund for critical metals is a significant step towards creating a secure supply chain for the energy transition and reducing Europe’s dependence on China. The fund’s focus on sustainable and responsible production is also essential in addressing the environmental and social risks associated with critical metals production. As the EV revolution continues to gather pace, the fund will play a crucial role in supporting the growth of the industry and promoting the transition towards a low-carbon economy.
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