States support lithium mining with subsidies and incentives, yet China still dominates the market

Lithium has been mentioned with increasing frequency in recent years. The European Union classifies it as a critical raw material, without which the goal of net-zero emissions by 2050 cannot be achieved. Yet Europe plays only a figurative "second fiddle" across the entire sector. Europe significantly lags behind China, which now controls most of the global lithium supply chain. It is therefore worth asking what Europe can do to at least mitigate this unfavourable situation. This raises the question of how Europe can kick-start its own lithium supply chain, including mining. Current developments show that public financial support for lithium mining projects is far from unusual.

China currently produces more than three-quarters of all lithium-ion batteries worldwide, according to the International Energy Agency (IEA). The country is also home to six of the ten largest battery producers. The situation is similar in mining: in 2024, China ranked third behind Australia and Chile, with annual production of approximately 40,000 tonnes, and is expected to rise to first place as early as next year. Australia is cutting output due to the global decline in prices.