Blog Archives - ALTA GROUP

30/01/202603/02/2026

Europe’s chemical sector crisis — and why it matters for battery supply chains

Europe’s chemical industry is under structural pressure – production volumes are declining, assets are being idled, and new investments are increasingly directed outside the EU. This is often explained as a downturn driven by high energy prices and high competition from Asian suppliers.

In reality, the issue is more fundamental — and it directly affects Europe’s ability to build resilient battery and clean-tech supply chains.

A cost base under strain

European chemical producers face a combination of challenges that are difficult to offset through incremental improvements alone: structurally higher energy costs than the US or parts of Asia, stricter environmental and safety regulations, rising carbon costs, and slow permitting timelines. For energy-intensive and environmentally hazardous processes, these factors increasingly prevent new projects from reaching an investment decision.

The result is declining capacity utilisation, delayed upgrades, and a shrinking domestic production base. As reported recently in the Financial Times, investments in the European chemicals sector fell by over 80% in 2025 alone.

Why this matters beyond chemicals

Battery manufacturing relies heavily on chemical inputs, including solvents, electrolytes, catalysts, and precursors. When the upstream chemical sector weakens, downstream industries inherit that fragility.

A battery plant can be built in Europe while relying on imported chemicals produced under very different cost, regulatory, and carbon conditions. This exposes manufacturers to supply-chain risk, price volatility, and embedded emissions that are difficult to manage once production starts.

The limits of import dependence

One response has been to rely more on imports. While this may reduce short-term costs, it creates long-term vulnerabilities: geopolitical exposure, misalignment with carbon pricing mechanisms, and reduced control over critical industrial inputs.

For industries expected to scale rapidly, such as batteries, this dependence becomes a strategic liability.

Rethinking chemicals for batteries

Addressing this crisis does not mean preserving legacy chemical processes at any cost. It requires rethinking how chemicals are produced in Europe.

Innovation in catalysts and processes can lower energy demand, reduce emissions, and improve compatibility with European regulatory constraints. This makes it possible to rebuild chemical production capacity in a way that supports downstream manufacturing rather than undermines it.

Europe’s chemical sector crisis is not isolated. It is an industrial systems problem — and solving it is essential for resilient battery supply chains.

28/01/202628/01/2026

Replacing one solvent could accelerate EU gigafactory deployment

Europe’s ambition to build a competitive battery manufacturing base is well established. Dozens of gigafactories have been announced, billions of euros committed, and industrial policy is being aligned around localisation.

Yet deployment on the ground remains slower and more complex than expected. While electricity prices, permitting, and skilled labour are often cited as bottlenecks, a less visible factor consistently complicates factory design, timelines, and costs: solvent choice.

The hidden impact of NMP

N-Methyl-2-pyrrolidone (NMP) is the dominant solvent used in cathode slurry preparation. From a technical standpoint, it works well. From an industrial standpoint in Europe, it is a liability.

NMP is classified as reprotoxic under EU regulations, and its use triggers extensive environmental and safety requirements: closed-loop handling, solvent recovery systems, high air-exchange rates, wastewater treatment, and enhanced health and safety controls. These requirements translate directly into higher capital expenditure, higher operating costs, and longer permitting timelines.

Importantly, these impacts are not incremental. Once a cathode line is designed around NMP, much of the factory layout, utility sizing, and safety architecture is effectively locked in for the lifetime of the plant.

Why solvent choice matters for scale-up

For a gigafactory, the issue is not the purchase price of the solvent, but the system-level effect on:

factory complexity and footprint,
energy consumption,
CAPEX tied up in ventilation and recovery,
ongoing HSE and compliance burden,

These factors disproportionately affect first-of-a-kind plants, where timelines are tight and investors are sensitive to execution risk. In this context, solvent choice becomes a scale-up decision, not just a materials decision.

The opportunity for alternatives

Replacing NMP with a less toxic, drop-in alternative has the potential to simplify factory design materially. Reduced toxicity can mean simpler ventilation, lower recovery requirements, fewer permitting constraints, and lower operational risk — without requiring battery manufacturers to redesign their production lines.

This is where innovation in battery chemicals and catalytic processes matters. By enabling solvents that are compatible with existing cathode manufacturing while avoiding the regulatory and operational burden of NMP, it becomes possible to accelerate deployment rather than add friction.

A lever hiding in plain sight

Europe’s gigafactory challenge is not only about scale, capital, or demand. It is also about hundreds of design decisions that determine how complex and risky factories become.

Solvent choice is one of those decisions. Addressing it does not solve every problem in battery manufacturing, but it can remove a meaningful source of cost, delay, and uncertainty — and in doing so, help gigafactories move from announcement to operation faster and with less risk.

21/01/202628/01/2026

Battery chemicals and supply chain resilience: the missing layer in Europe’s battery strategy

Europe’s battery strategy is usually framed around gigafactories, cell chemistries, and electric vehicle targets. Capacity is measured in gigawatt-hours, and progress is judged by how many plants are announced or built.

What receives far less attention is a layer of the value chain that has a disproportionate impact on cost, risk, and resilience: battery chemicals.

Chemistry shapes factories

Battery chemicals are often discussed as a materials issue: purity, performance, or compatibility. From an industrial perspective, the implications are broader. Chemistry choices determine factory complexity, energy consumption, capital tied up in safety and recovery systems, permitting timelines, and long-term operational risk.

Once a production line is designed around a specific chemical process, these parameters are largely locked in. Changing them later is expensive and disruptive, which is why upstream chemistry decisions often matter more than incremental improvements at the cell level.

Local factories, global dependencies

Much of Europe’s battery manufacturing still depends on imported chemicals, primarily from Asia. These are not marginal inputs but materials required for continuous operation.

As a result, a battery plant can be physically located in Europe while remaining economically and strategically exposed to global supply chains. Transport costs, regulatory friction, carbon pricing, and geopolitical risk are embedded into every cell produced.

Why catalysts and process innovation matter

As carbon pricing mechanisms such as CBAM come into force and regulatory standards tighten, upstream emissions and toxicity increasingly translate into direct financial exposure.

Innovation in catalysts and chemical processes offers a way to address this. New catalysts can lower energy requirements, enable the use of alternative feedstocks, reduce toxicity, and simplify handling. Process innovation enables the production of battery chemicals locally, in compliance with European regulatory requirements, without sacrificing cost competitiveness.

If Europe wants a resilient and competitive battery supply chain, the discussion cannot stop at cells and gigafactories. Resilience starts upstream, in chemistry and process design.