Having invested heavily in the strategic green economy, China largely dominates the production of battery components, electric vehicles and solar panels in the world. Fearing for data security, supply chain stability, intellectual property and human rights, many Quebec companies linked to the energy transition are quietly shedding their dependence on the Asian giant. A long and complex process.
Green energies are becoming one of the most important geopolitical issues, just like oil, according to Mark Purdon, holder of the ESG-UQAM Chair in Decarbonization . But China has a big head start.
“We slept in North America, in the West. You’re starting to wake up and you’re frustrated,” says Purdon.
For more than a decade, China has injected billions of public funds into the development of this sector of activity. Today, it is the largest manufacturer of electric cars in the world. It also controls the production of three quarters of the lithium ion batteries used in these vehicles, as well as 70% and 85% of the world production of cathodes and anodes necessary for their manufacture, according to the International Agency for energy (IEA). The majority of minerals needed to manufacture batteries are also refined in China, and their extraction is largely controlled by Chinese interests.
The international organization expects China’s stranglehold on this supply chain to continue for a long time to come. In addition, more than 80% of the production of solar panels is also carried out in China, worries the IEA.
“It’s positive, in a way, that someone has taken the initiative to move these technologies forward,” Purdon said. The fall in solar panel prices is a lot thanks to China. »
An addiction to fight
Thus, several companies here in the field of electrical energy obtain their supplies from Chinese suppliers, in particular for battery cells. This is particularly noted by Thierry St-Cyr, CEO of Innovéé, an organization that supports projects in this sector.
Nova Bus, which notably manufactures electric buses in Saint-Eustache, said by email that “the dependence on China is mainly focused on high-tech components, such as semiconductors and battery cells, since the concentration of this expertise and production are mainly found in this region of the globe”.
For its part, the manufacturer Lion Electric could not or wanted to say if some of its parts come from China, admitting however that “certain inputs must come from different Asian countries”. In addition, its president and CEO, Marc Bédard, has already assured that Lion will no longer do business, in a few years, with authoritarian countries.
The desire to develop a certain autonomy from China is evident in many Western countries. The risks of not doing so are significant. Sustainable development could be hampered if current geopolitical tensions escalate into armed conflict.
“Everyone is wondering how to stop sourcing from China. It is certainly more expensive, but more reliable, more environmental and more socially acceptable,” says Mr. St-Cyr.
According to Sarah Houde, president and CEO of Propulsion Québec, the industrial cluster for electric and intelligent transportation, several companies are afraid to work with China for intellectual property reasons.
“Because it is an authoritarian government, there are fears that software associated with green technologies, such as solar panels, are means of clandestine surveillance and access to data on Canadian citizens. and Americans,” added researcher Mark Purdon.
It is in this spirit that the Government of Quebec actively supports the development of a sector for batteries in the province. Collaborations are also developing with various friendly countries, such as France. The United States has taken the same turn with the Inflation Reduction Act, which supports the growth of the clean energy sector in North America.
“Our business model is to develop an alternative to China,” said Vice President of Communications and ESG Strategies for Nouveau Monde graphite, Julie Paquet. The company is banking on mine and graphite processing plant projects, an important ore for batteries, in Lanaudière and Mauricie. It ensures that their processes will have a smaller environmental footprint than that of Chinese graphite, for equivalent quality.
But it will take years to build the factories and complete this supply chain, admits Mme Houde. Moreover, no cell manufacturer has yet confirmed its establishment in Quebec.