Lithium-ion battery production capacity is set to increase by up to eight times over the next five years. Poland has the opportunity to maintain its leading position in the global supply chain of the battery sector. The actions necessary to achieve this goal are outlined in a report titled “Europe drives on Polish lithium-ion batteries: The potential of the battery sector in Poland and the CEE region,” developed with the participation of F5A.
The growing sales of electric vehicles are driving rapid growth in demand for their key components – lithium-ion batteries. Global production capacity in this sector is predicted to increase eightfold by 2027, reaching 8,945 gigawatt hours (GWh). Europe is playing an increasingly significant role in the battery sector, accounting for 14% of global production capacity in 2022. Among European leaders are countries in the Central and Eastern European region, notably Poland and Hungary, contributing as much as 9% of global capacity. Poland is a key player in the battery supply chain, ranking as the second-largest producer worldwide. Lithium-ion batteries already represent over 2.4% of all Polish exports. The value of the battery sector has surged 38-fold in the last six years, from around PLN 1 billion in 2017 to over PLN 38 billion in 2022. In addition to LG Energy Solutions, other leading battery companies such as Northvolt, Umicore, SK Innovation, Capchem, Guotai Huarong, BMZ, and Mercedes-Benz Manufacturing Poland are also investing in the country.
According to the F5A analysis, prepared on behalf of the PSPA, in the context of increasing competition from other countries heavily investing in their production potential, it is necessary to define instruments for implementing measures that will allow Poland to maintain its leading position in the battery sector. Targeted measures are needed in three main areas: increasing domestic capacity concerning the necessary raw materials for cell and battery component production, developing skilled human resources, and fostering innovation in the supply chain.
The key issue includes, among others, improving the process of issuing permits and assessing environmental impact (EIA). It is also important to implement incentives for the development of battery reuse and recycling technologies to create a closed cycle of production, operation, and disposal. To ensure that potential investors have access to a suitably skilled workforce, a comprehensive program of support for the sector is needed, including training assistance for acquiring new competencies, talent development, and retraining of the current workforce. Dedicated programs to retrain staff and raise awareness of new technologies related to the development of zero-emission transport must be developed at the national level. Furthermore, increasing innovation in the supply chain of the battery sector is an important challenge. In this context, the public administration should provide adequate support to entities investing in decarbonizing production processes and increasing the use of green energy. The development of the battery industry in the CEE region also requires quick and decisive measures to create special budgets or subsidies for rising electricity prices, as is the case in Canada, Japan, or South Korea. This minimizes the risk of capital outflow and encourages investment in the battery sector.
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