Federal government supports lithium projects in the southwest

23.07.2025

Source: E & M powernews

The federal government, Rhineland-Palatinate and Hesse are funding two Vulcan Energy lithium projects. More than 100 million euros in funding is intended to secure the supply of raw materials.

Together with the states of Rhineland-Palatinate and Hesse, the Federal Ministry for Economic Affairs and Energy (BMWE) is supporting two related investment projects for domestic lithium production. The aim is to make German industry less dependent on global raw materials markets and to secure the long-term supply of lithium, a strategically important raw material for batteries.

The projects are being carried out by subsidiaries of Vulcan Energy Ressourcen GmbH. The Karlsruhe-based company develops geothermal-based processes for lithium extraction in Europe. Vulcan Energy is investing a total of around 690 million euros at the Landau (Rhineland-Palatinate) and Frankfurt-Höchst (Hesse) sites. The public funding amounts to 103.6 million euros. Rhineland-Palatinate and Hesse are each providing 30 percent of this as co-financing.

According to the BMWE, this is a contribution to the resilience of industrial supply chains and to Germany's competitiveness. Stefan Rouenhoff (CDU), Parliamentary State Secretary at the BMWE, explained that lithium is of central importance for high-performance batteries - especially in the automotive industry. Sustainable, domestic production strengthens security of supply.

Lithium extraction and processing planned

Natürlich Landau Lithium GmbH is planning a new type of extraction plant in Landau in der Pfalz, where lithium chloride is to be extracted from geothermal brine. According to the company, the process is considered resource-saving and innovative. In March 2025, the project was classified by the EU Commission as strategically important under the Critical Raw Materials Act.

The Rhineland-Palatinate Minister of Economic Affairs, Daniela Schmitt (FDP), also sees the dual project in Landau and Frankfurt as strengthening climate-friendly technologies. Domestic lithium production could help to create stable supply chains, according to Schmitt.

At the same time, a conversion plant is being built in the Frankfurt-Höchst industrial park, where the lithium chloride extracted in Landau will be processed into lithium hydroxide monohydrate. This substance serves as a precursor for modern lithium-ion batteries and is therefore a key factor for electromobility.

Hesse's Economics Minister Kaweh Mansoori (SPD) added that the technology is a step towards greater sustainability in battery production. The project also strengthens Hesse as a high-tech location and secures jobs in the long term.

Goal: continuous value chain

The funding comes from the "Resilience and Sustainability of the Battery Cell Production Ecosystem" program, which the BMWE launched in 2023 on the basis of the "Federal Regulation on Transformation Technologies". The aim is to build capacity along the entire battery value chain.

Lithium has been listed as a strategically important raw material in the EU since 2023. At present, global production - especially the refinement into battery-grade material - is concentrated in just a few countries. The German government is therefore aiming to establish independent, European capacities for lithium processing.

Author: Susanne Harmsen