EU, Serbia sign lithium deal as clean tech race speeds up

The European Union (EU) is looking for lithium to power its transition away from fossil fuels and help it compete in the global race for clean technology. Over the past three yearsm the bloc has been on a self-styled "raw material diplomacy" mission, inking resource deals with 13 countries including Canada, Ukraine, Kazakhstan, Rwanda, Argentina and Namibia. Now, the EU has a new name to add to the list: Serbia. 

The Balkan country is more often at odds with the EU than on the same page. It’s kept close ties with Russia and China, and resisted Brussels’ longstanding expectation that aspirant EU members like Serbia replicate EU sanctions on Moscow over its invasion of Ukraine. 

But on Friday when Serbian President Aleksandar Vucic stood side-by-side with German Chancellor Olaf Scholz and European Commission Vice President Maros Sefcovic to announce a new "strategic partnership" covering raw materials, battery supply chains and electric vehicles, those foreign policy differences were swiftly swept aside. 

"We are meeting here on a historic day, a historic opportunity for Serbia, for the European Union, and clear proof that we are already living in the era of clean tech," Sefcovic told reporters in the Serbian capital. "This will open the door to the largest foreign direct investment in Serbia's history," he said.

That promise of an economic boost may fall short for many Serbians though, amid fierce debate within the country over who has the right to dig for lithium where, and at what cost.

Why is lithium so important?

The newly signed memorandum of understanding will not kick-start production right away — instead Serbia and the EU plan to draw up a roadmap by the end of the year to turn on-paper ideas like research cooperation and training schemes for technology workers into concrete actions.

But the drive behind the deal is clear: The EU needs lithium, and fast. It's used in batteries for electric cars, solar panels and wind turbines — the big hitters for a fossil fuel-free future.

Lithium demand for batteries in the EU is projected to jump twelve-fold between 2020 and 2030 according to the EU's Joint Research Centre — and Germany, Europe's car manufacturing powerhouse, has a particularly large appetite. EU laws banning most sales of new gasoline and diesel cars in the bloc from 2035 are also prompting a new need to ramp up production in alternative energy sources.

A race against China?

For now, the bloc is far from self-sufficient. An EU official told DW that 79% of the bloc's processed lithium imports currently come from Chile, but when it comes to importing manufactured battery cells, the economic union remains reliant on China.

Since 2020, the EU has been rushing to decrease dependence on Beijing. Last year it unveiled a law designed to diversify suppliers of critical raw materials, including lithium, and boost homegrown production.

Now it's Serbia's turn. Tucked between a handful of EU member states including Hungary and Romania, the country could offer a convenient and closer-to-home supply chain start point for the crucial mineral. It's also believed to hold some of Europe's largest lithium reserves.

Environmental activists protest lithium mining in Serbia

Inside Serbia, a battle over lithium mining rights is raging. Mass protests over environmental concerns prompted the government to bar mining giant Rio Tinto from starting extraction back in 2022. The ban was revoked this year after being deemed unconstitutional, and now the Serbian government says operations could begin in 2028.

Climate activists are not convinced, and many Serbian citizens remain unimpressed. "The EU might provide guarantees for the project, but we're destroying nature," one passerby on the streets of Belgrade told DW.

Opposition politician Savo Manojlovic had an even more pointed message for the German chancellor: "Olaf, leave our lithium!"

Governments and mining firm vow safe supply chains

Scholz repeatedly stressed that high environmental standards would be baked into the new deal in Friday's press conference in Belgrade. "This is a project that is good because it will be developed in an environmentally compatible way," he stated.

A spokesperson for mining company Rio Tinto told DW that its new mining plans would be subject to "stringent environmental requirements in compliance with Serbia and EU regulations."

"This includes having to progress through an extended phase of legal environmental impact assessment and permitting procedures, as well as public consultations and updating the business valuation, before implementation of the project," the spokesperson said.

Can lithium help Serbia leap toward the EU?

Serbia has been an official candidate for membership of the EU since 2012 and Sefcovic spoke directly to those aspirations after Friday's signing ceremony.

"We see you, and we want you in the European Union. Projects like this are just accelerating the whole process," he said.

But Stefan Vladisavljev, a researcher with the Belgrade-based Foundation BFPE for a Responsible Society said it is "not realistic to predict Serbia will become one of the next countries to join the EU" until some "burning issues" become "more clear."

Among the hot topics: the question of normalizing relations with Kosovo, which unilaterally declared independence from Serbia in 2008. Serbia does not recognize Kosovo's independence, nor do Russia, China and several EU members, who have been attempting to discourage Kosovo's membership in international bodies, such as the United Nations.

With no resolution in sight, Vladisavljev says Belgrade's road toward a seat at the table in Brussels remains "complex" and "burdened by issues of a geopolitical and domestic political nature."

Edited by: Maren Sass