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Poland to lead the global supply chain of the battery sector

Global lithium-ion battery production capacity will increase by up to 8 times over the next 5 years. Poland has the opportunity to maintain its leading position in the global supply chain of the battery sector and the actions necessary to achieve this goal were described in the latest report of the Polish Alternative Fuels Association (PSPA) entitled Europe drives on Polish lithium-ion batteries. The potential of the battery sector in Poland and the CEE region.

In 2022, global sales of electric cars reached 10.5 million units, an increase of 55 per cent compared to 2021. According to Goldman Sachs analysts, electric cars are already expected to account for a third of global sales in 2030 and five years later their market share will rise to 50 per cent. Demand for electric cars is also steadily increasing in the European Union. In 2022, the share of new passenger BEVs and PHEVs on the EU market reached 22.8 per cent, higher than that of diesel vehicles. Growing sales of electric vehicles are translating into a dynamic increase in demand for their key component – lithium-ion batteries.

“According to BNEF forecasts, global lithium-ion battery production capacity is expected to increase eightfold by 2027, reaching 8,945 gigawatt-hours (GWh),” commented Maria Majewska, New Mobility Expert at PSPA. “Europe is playing an increasingly important role in the battery sector, accounting for 14 per cent of global production capacity in 2022. European leaders in this area include some countries in the Central and Eastern European region, in particular, Poland and Hungary accounting for as much as 9 per cent of global capacity.”

By 2027, Poland and Hungary are estimated to increase their production capacity and maintain their high positions, ranking 6th and 4th globally respectively. Other countries in the Central and Eastern European (CEE) region, such as Serbia (with a production potential of 16 GWh) and Slovakia (10 GWh), are also gaining a stronger presence in the global battery value chain.

“Almost 50 deployment projects have been announced in Europe, which will contribute to the delivery of cells with a total capacity of up to 1,800 GWh by 2030,” said Aleksander Rajch, PSPA’s external relations director. New investments in existing plants are planned in the CEE region (in countries such as Poland, Slovakia, Hungary, the Czech Republic, Latvia and Serbia). LG Energy Solution Wrocław in Biskupice Podgórne (Poland), Europe’s largest electric car battery production centre, currently has 86 GWh of production capacity and will soon reach 115 GWh. However, in order to maintain Poland’s leading position in the world ranking, it is necessary to double the production capacity by 2027, it should exceed 200 GWh.”

According to the report, Poland plays a leading role in the battery supply chain, being the second largest producer worldwide. Lithium-ion batteries already account for more than 2.4 per cent of all Polish exports. 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 our country.

“Our report was written with the support of Polish and Slovak battery market leaders and a number of stakeholders in the sector,” added Maciej Mazur, managing director of PSPA. “The study was based on a series of thematic workshops, carried out with the participation of Polish and foreign experts from CEE GTI (CEE Green Transport Initiative) and SEVA (Slovakian Association of Electric Vehicles).”

In particular, the PSPA report defines the challenges of the battery sector in Poland, Slovakia and the rest of Central and Eastern Europe. The aim of the study is to initiate a discussion on the necessary actions leading to increased production and intellectual and R&D potential in this area. The report also describes in detail the battery market and industry, key production technologies, human resources, recycling issues, key investments and the business environment. A number of recommended actions for the development of the battery industry in the CEE region are also presented.

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