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The EU’s green transition hinges on the secure supplies of critical raw materials

Access to critical raw materials is a strategic question, as they are essential to the functioning and integrity of a wide range of industrial ecosystems. Tungsten makes phones vibrate. Gallium and indium are part of light-emitting diode (LED) technology in lamps. Semiconductors need silicon metal. Hydrogen fuel cells and electrolysers need platinum group metals and lithium-ion batteries power electric vehicles.

The European Commission warned already that Europe’s transition to climate neutrality could replace today’s reliance on fossil fuels with one on raw materials, many of which we currently source from abroad and for which global competition is becoming more fierce.

The supply of many critical raw materials is highly concentrated. For example, China provides 98 per cent of the EU’s supply of rare earth elements, Turkey provides 98 per cent of the EU’s supply of borate, and South Africa provides 71 per cent of the EU’s needs for platinum and an even higher share of the platinum group metals iridium, rhodium, and ruthenium. The EU relies on single EU companies for its supply of hafnium and strontium.

The Commission recently updated its List of Critical Raw Materials. A number of the listed items are essential for Europe to lead the green and digital and according to the Commission we cannot afford to rely entirely on third countries to secure their supplies. Lithium, essential for a shift to e-mobility, has been added to the list for the first time.

2020 List of Critical Raw Materials
Source: European Commission

“For e-car batteries and energy storage alone, Europe will need up to 18 times more lithium by 2030 and up to 60 times more by 2050,” said Maroš Šefčovič, Vice-President for Interinstitutional Relations and Foresight who’s also responsible for coordinating the Commission’s work on the European Battery Alliance.

Apart from lithium, demand for rare earths used in permanent magnets, for electric vehicles, digital technologies or wind generators, could increase tenfold by 2050. If not addressed, the increase in demand for these materials may lead to supply issues.

On Friday the Commission unveiled its action plan to address these pressing issues and to make Europe’s raw materials supply more secure and sustainable.

First of all, the Commission announced to establish the European Raw Materials Alliance, aiming to increase EU resilience in the rare earth and magnet value chains, as this is vital to most of EU industrial ecosystems, such as renewable energy, defence and space.

To strengthen domestic sourcing of raw materials the Commission plans to work with Member States and regions to identify mining and processing projects in the EU that can be operational by 2025. A special focus will be on coal-mining regions and other regions in transition, with special attention to expertise and skills relevant for mining, extraction and processing of raw materials. The EU executive also aims to support research and innovation, especially on new mining and processing technologies.

To address the circularity and sustainability of the raw materials value chain in line with the European Green Deal the Commission will develop sustainable financing criteria for the mining and extractive sectors by the end of 2021. It will also map the potential of secondary critical raw materials from EU stocks and wastes to identify viable recovery projects by 2022.

In the wake of the coronavirus crisis many parts of the world are looking critically at how they organise their supply chains, especially where public safety or strategic sectors are concerned.

“One of the lessons of the COVID-19 crisis is the need to reduce dependency and strengthen diversity and security of supply,” concluded the Commission. “Enhancing open strategic autonomy will be a long-term benefit to the EU.”

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