European lithium-processing investments remain exposed to international competition because the principal raw and refined forms of lithium can enter the EU without a charge under the Carbon Border Adjustment Mechanism (CBAM). Projects therefore depend on strategic-policy support and customer agreements rather than carbon-border protection.
Eurostat data show that EU imports of lithium carbonate declined from 15,000 tonnes in 2019 to about 8,200 tonnes in 2025. Prices remained volatile following the 2022–2023 boom. Chile accounted for approximately 70% of EU lithium carbonate import value in 2025, followed by Argentina and the United States, highlighting supply concentration before accounting for battery-cell demand.
Chemical Conversion Remains Central to European Capacity
Lithium processing converts hard-rock concentrates or brine into battery-grade lithium carbonate or hydroxide. These operations require strict impurity control and substantial inputs of energy and chemicals.
Under the Critical Raw Materials Act (CRMA), Europe aims to expand domestic processing capacity. Imported lithium chemicals do not currently face the same carbon-border mechanism applied to aluminium and steel. European converters must therefore compete through logistics, proximity to customers, product quality, renewable electricity, water management and secure feedstock supplies. Long-term offtake agreements with cathode producers and battery manufacturers can be more important to project bankability than spot lithium prices.
Carbon Accounting and Investment Requirements
A future CBAM extension could include lithium, but establishing a methodology would be complex. Brine-based and hard-rock production routes have different emissions profiles, while recycling is expected to provide a growing share of feedstock over time.
Any future system would need to avoid disadvantaging low-carbon imports that remain necessary for European supply security. European lithium-processing projects therefore need to be financed as strategic industrial infrastructure, without assuming future CBAM protection. Converting lower-carbon production into commercial value will depend on traceability and long-term customer contracts.
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