A new type of partnership to secure our supply chains

For decades, Europe has built up its own dependencies: oil, gas, coal, chemicals… Dependencies towards our systemic rivals… Dependencies that have increased the risks of confrontation…

Dependencies from which we must now learn the lessons. As Europe accelerates its green transition, with the re-evaluation of our economic models, it is essential not to substitute old dependencies for new ones.

The case of solar energy is a perfect example of this. China is now home to seven of the world’s top ten solar panel manufacturers, and controls the entire production and supply chain through strategic investments and partnerships with many third countries. Lithium, a component essential for our electrical vehicles, is another example. While China produces only 7% of the world’s lithium, it will be able to control 1/3 of the world’s supply by the middle of the decade. These examples could be replicated in almost all industries related to the energetic and digital transition with the same result.

It is time for Europe to catch up in this area and we therefore welcome the Commission’s announcement of these two legislative proposals: the Net Zero Industry Act and the Critical Raw Material Act.

Two proposals, one goal: A sovereign Europe!

On the one hand, we have the “Net Zero Industry Act”, which aims to facilitate the development in Europe of the means necessary to decarbonize our economy.

While on the other hand, to allow this industry to function, we will need to secure our access to strategic and critical raw materials, and this is what the “Critical Raw Material Act” intends to do.

By developing our European industry and studying what raw materials we need, Europe intends to finally put in place real strategies for securing our access to these raw materials through strengthened ties with third countries. This is essential for the growth of our global industries, for the development of secure, resilient, affordable and sufficiently diversified European value chains, while ensuring benefits for third countries.

Win-win partnerships that the EU intends to offer to third countries

To this end, Europe intends to develop a “Club for Critical raw materials”. A club composed of countries that share our values, our goals and our environmental and social standards. We must no longer create new dependencies on countries that do not defend our values or countries that are openly hostile towards us, as we have seen with Russia.

This club will be centred on creating “strategic partnerships”. This means creating partnerships that promote sustainable growth in third countries and contribute to the resilience of European industrial value chains.

In short, these will be win-win partnerships.

Europe has already been able to develop strategic partnerships with countries such as Canada, Ukraine, Chile and New Zealand…. A list that it intends to extend over the coming years and for which some positive effects have already been felt.

However, one should not be naive and fall into the trap of letting our competitors into the club. This club must serve to guarantee the sovereignty of Europeans. By letting in, without debate, states such as the United States whose only ambition is to defend its own interests, to the detriment of Europeans, we must ask ourselves what the consequences of this would be.

Without undermining our previous alliances, we cannot assume that all of our allies will be inclined to the same goal of strengthening European sovereignty.

We can be allies but not necessarily aligned

We must also face the fact that these partnerships place many constraints on third countries, particularly with regard to abiding by our European environmental and social standards. This is a reason often put forward by partners that are quick to align with other countries that have much less demanding standards… It is important to champion our standards and to make them attractive to our future partners.

Reinforcing the attractiveness of the European model

The European Commission also plans to use its various programmes, including the “Global Gateway”, to attract these new countries. But here again, the question of resources arises.

The Global Gateway, with its 300 billion in funding, is already criticised for being underfunded, and seems weak compared to the $40 trillion in funding from the United States or the Chinese new Silk Roads. We will have to work to ensure our attractiveness as these two other blocks are ready to work with much lower standards, and especially with much less consideration for third countries.

Europe has chosen to take a leap towards greater autonomy in the supply chains. With these new legislative proposals, through the creation of new strategic partnerships and by providing ambitious global leadership, the potential is great. The hopes are just as high, but we must not let ourselves be discouraged. This would have dramatic consequences for the Union and for our citizens.