Neither autarchy nor dependence – more European autonomy

World geopolitics has undergone major fragmentation over a very short period of time.

At the same time, we have stepped into an era of permacrisis: the pandemic, the ever more tangible and measurable signs of climate change, and of course Russia’s war of aggression against Ukraine.?

Strategic supply chains and technological competition have become a political priority, with a global race taking place. ?

In this new geopolitics of supply chains, our dependencies are being used as a weapon against us. ?

Russia has tried to weaken the European Union but the effect has been the opposite. ?

We are more resolute than ever to “decouple” from Russia, without self-isolating. ?

We are seeing a more assertive Europe that builds leverage and establishes a new balance of powers based on our strengths and according to our rules. We are building new bridges with global powers like the US and China of course, as well as with regional actors such as Africa and Asia.

And we are also redesigning our relationship with other individual countries surrounding the EU that seek to retain global influence, namely the UK and Turkey.?

Our capacity to take our destiny in our own hands boils down essentially to the mastery of tomorrow’s technologies. Breakthrough digital, dual and green technologies are becoming an essential driver of our resilience. For all of this, we need secure supply chains for critical raw materials.?

In the new world geopolitical order, Europe – the first democracy, and one of the largest (notably digital) markets – is and will be an indispensable player.?

After the “Europe of democracy” and the “Europe of the market”, let us now pave the way for a “Europe of power”.?

Geopolitics in times of permacrisis – Europe rising to the challenge

In this new geopolitics and succession of crises, we have seen Europe time and again rise to the challenge.

• Vaccines

In the health space, to start with. Vaccines and their components are an illustration of the lack of resilience in our supply chains, combined with excessive vulnerabilities and dependencies.

We set up an EU Task Force under my supervision to ramp up vaccine production. ?

And while we were successful in this ramp-up, delivering vaccines to Europeans and around the world, we learned some lessons the hard way: export bans, strengthening supply chains, increasing industrial capacity beyond research…?

• Defence

Over the last twenty years, EU combined spending on defence has increased only by 20%, compared to 66% in the US, nearly 300% in Russia and 600% in China! ?

The Strategic Compass, adopted in March, is a far-reaching and game-changing plan of action for strengthening Europe’s security and defence policy by 2030.?

Complemented in May by a roadmap to consolidate the European defence industrial and technological base, building on a thorough analysis of our defence investment gap. And in July, by presenting a new instrument to support, at European level, the joint acquisition of weapons.

In addition to helping replenish part of the stocks following the transfer of arms to Ukraine, we are creating an incentive through the EU budget for Member States to buy together. Europe's defence is making great strides.?

• Energy

Natural gas prices traded at close to 300 euros per megawatt hours this week: a new record; last year in the same period, they were trading at 40 euros. ?

Electricity prices also hit new records, above 500 euros per megawatt hour. Last year, during the same period, they were trading at 60. ?

REPowerEU, adopted in May, and the gas savings plan, adopted in July, are Europe’s plans to find alternatives to the 155 bcm (billion cubic meters) of Russian gas we imported. Such efforts to decouple from Russian gas would have been unthinkable a few years ago. ?

It is based on three pillars:

1.Substitution:

• Using alternatives to Russian gas: LNG (at least 50 and up to 64 bcm), notably from the US; pipelines diversification (14bcm), notably from Norway; ?domestic gas production in Italy, Romania, the Netherlands or Germany, biogas and biomethane across Europe (8 bcm)
• Pushing for clean energy technologies (renewables, nuclear) wherever possible (12 bcm), for other fossil fuels (coal, oil) wherever necessary (in particular for industrial uses and for power generation: up to 34 bcm)

2. Solidarity:

• Gas storage levels are close to 80 % at EU level, compared to roughly 62 % last year at the same period. In line with the EU’s objectives for the beginning of winter (all Member States above 80%).
• Between Member States, so that gas or electricity can continue to flow wherever it is most needed, in full respect of the Single Market principles
• Among industrial users, to maintain level playing field and industrial competitiveness

3. Sobriety/savings:

• Renovate buildings as far and as fast as possible to better insulate (4 bcm)
• Reduce room temperature in winter, increase it in summer (10 bcm)
• Avoid wasted energy in administrations and services sector (10 bcm)

?Technological race: the new edge

?From a soft power standpoint, our capacity to take our destiny in our own hands boils down essentially to the mastery of tomorrow’s technologies. ?

Breakthrough digital, dual and green technologies are becoming an essential driver of our resilience.?

·?????Digital?

We must champion these technologies, in particular by working on essential levers such as data and chips. ?

Data will power tomorrow’s industry, benefiting businesses, consumers, public services and society as a whole. ?

But for this to happen, Europe needs to grow stronger in sharing and exploiting data, especially deep industrial data. ?

That is the objective of the legislative proposals on data, and of our work to promote common European data spaces.?

On chips - or semiconductors: they are the essential carrier of data-driven products and services. ?

The market will double by the end of the decade. Europe must be ready. But we are still lagging behind and the supply chain is extremely fragile. ?

Hence the importance of the European Chips Act, proposed by the Commission in February to support large-scale technological capacity building and innovation; secure supply and beef up our response to future chips crisis.?

·?????Space

Space is becoming extremely contested. Access to space will be essential and Europe must be ready to harness its immense potential. ?

This means maintaining its autonomy of decision. Over the next 10 to 15 years, Europe will be launching more than 30 satellites, but here again, economic and technological competition are increasing globally. ?

We must develop a fully-fledged European launcher strategy that ensures our freedom to act in space for the next 30 years. ?

Quantum technologies are essential for ground and space applications. They carry both opportunities and risks to our society as we expect quantum computers to be able to decipher most commonly used encryption techniques. ?

The European Union is laying the ground for a Secure Connectivity Program to build a proper cybersecurity shield for the coming decades. ?

Eventually, our ultimate goal should be the creation of a European, non-dependent quantum ecosystem combining expertise from industry and research institutes.?

And also support “New Space” actors, by giving them the opportunity to grow in Europe. Unlike the United States, risk capital is still too cautious in Europe. This is exactly the purpose of our CASSINI initiative: supporting and accelerating innovation and entrepreneurship in the space sector. It will help us contain talent drain and become a space entrepreneurship hub.?

·?????Green tech

Europe also needs to ramp up its capacities to meet its Green Deal targets. To a certain extent, we lost industrial momentum in certain areas – I have in mind the solar sector – but things are changing, and they are changing fast. ?

See for example the latest developments on hydrogen. Early summer, the Commission approved the first Important Project of Common European Interests (IPCEI) in the field of hydrogen. ?

A second IPCEI should follow in September. In total, this means 70 to 80 ground-breaking industrial projects that will boost large-scale European industrial supply and demand for hydrogen, decarbonise energy-intensive industries and contribute to Europe’s energy security. ?

We are aiming for 10 million tons of clean hydrogen produced by 2030. That’s 40 billion cubic meters of Russian gas. This is where technologies meet geopolitics. ?

Another example where things are changing fast: batteries. Five years ago, we started from scratch. In the meantime, we have invested massively – three times more than China, and with the help pf the European Battery Alliance, we have identified 70 major projects, including 20 giga-factories. At this pace, by 2030, we will be able to cover 90% of demand in Europe.?

Building technological hegemony is about racing, growing, consolidating. The European Union must continue to deploy its toolbox to the fullest to support its industrial capacities. ?

Ramping up domestic capacities in future technologies alone will not suffice. Europe also needs to beef up what I call its supply chain diplomacy – illustrated by the issue of access to raw materials – and its assertiveness when it comes to protecting its economic interests.?

Supply chain resilience – the case of raw materials

?By 2030, 30 million electric cars are expected to be on our roads. An equal number of batteries will need to be produced, for which access to raw materials is becoming more critical every day.?

For lithium, cobalt and graphite, Europe remains heavily dependent on supplies from third countries (China in the lead), which can be as much as 100% for refined lithium, for example... Whereas we have deposits here in Europe!?

The same is true for motors, and more particularly the permanent magnets that compose them, and for which China controls the entire value chain.?

But what do we see??

In the past year alone, prices for rare earths used to make permanent magnets have risen by 50-90%.????????

Without better access to raw materials, our goals of zero-emission mobility are at risk due to raw material shortages or rising costs. ?

While demand is increasing dramatically due to the digital and green transition of our society???not to mention the rise in defence and security needs???we are too often almost entirely dependent on imports, while the geopolitics of supply chains are increasingly unstable and we are seeing a true global race to source and recycle critical raw materials.?

Our "systemic rivals" (China) and our partners (United States, Canada, Japan, South Korea) have understood this.?

Of course, we must continue to use our foreign trade channels, as we are and remain an open continent.?

But external diversification cannot be achieved at the expense of developing European know-how. Nor of our autonomy or capacity to act.??

Above all, we need the capacity to separate, refine and recycle raw materials, which are also too often concentrated in China.?

There would be no point in having stable partnerships in raw materials if we were to remain dependent in the refining phase, for example.?

Whether we like it or not, the weight of the European Union on the international scene and in relation to its partners and competitors depends on our ability to put our assets on the table and not to be mere "clients" or applicants.?

We need to build power.?It is therefore high time to act.?

This includes mining in Europe, which is still a taboo at present. We prefer to import from third countries and turn a blind eye to the environmental and social impact that occurs there, not to mention the carbon footprint of our imports. ?

However, mining in Europe can benefit from new technologies that allow extraction with a very low environmental impact. And we can set requirements for the sustainable, circular and socially responsible sourcing of these raw materials.?

At the same time, we need to promote more innovation - especially in recycling solutions and alternatives to critical raw materials.?

We must turn our single market into the geostrategic instrument it has always been.?

Technology in a geopolitical Europe?

I often hear, rightfully, that we need a “sovereign”, “resilient”, an “autonomous”, an “open strategic autonomous” Europe. Beyond terms, I like to focus on results for our citizens.?

Europe must invest in cutting-edge products and technologies that allow us to remain competitive and generate quality jobs. Be a leader in the markets of the future, not a subcontractor for whoever. ?

A "factory Europe” that gives itself the means to cater for its own needs but also to conquer world markets and export. A Europe not withdrawn into its shell and wanting to produce everything itself, but rather a Europe that shelters all its supplies from the hazards of the geopolitics of value chains.?

After the Europe of democracy and the Europe of the market, let us now pave the way for a Europe of power.