European Reliance on Raw Materials Threatens Renewable Energy Transition

The European Union faces significant challenges in securing the raw materials necessary for its renewable energy transition. A recent special report by the European Court of Auditors highlights that diversification efforts have yet to produce tangible results. Bottlenecks in production and a nascent recycling sector jeopardise timely project delivery and policy objectives.

Central to Europes green ambitions is the reliance on technical equipment such as batteries, wind turbines, and solar panels. These require vital raw materials including lithium, nickel, cobalt, copper, and rare earth elements. Currently, these resources are predominantly concentrated in third countries like China, Turkey, and Chile, exposing Europe to strategic vulnerabilities. To address this, the EU adopted its Critical Raw Materials Regulation in 2024, aiming to secure a long-term supply of twenty-six key minerals vital for energy transition.

However, experts such as Keit Pentus-Rosimannus warn that without access to these raw materials, the EU cannot achieve its climate, economic, or strategic autonomy goals. Diversification through international partnerships, boosting domestic extraction, and enhancing recycling are the main strategies outlined. Yet, these measures are still inadequate. The Regulation sets non-binding targets for 2030, focusing on strategic minerals, but progress remains uncertain. The lack of precise benchmarks and the slow pace of implementation raise concerns over whether the EU can meet its procurement goals within the decade.

Efforts to diversify supply through international partnerships have yielded limited results. Over the past five years, the EU has established fourteen strategic alliances, including with countries with poor governance scores. Despite these initiatives, import dependency on these partner nations has not significantly decreased. For example, between 2020 and 2024, imports from these nations fell by only half for certain materials. Negotiations with the United States and agreements like the EU-Mercosur trade accord are stalled or incomplete, further hampering diversification prospects.

The recycling of critical raw materials presents another significant hurdle. The EU aims for at least twenty-five percent of strategic materials to be recycled by 2030. Currently, recycling rates remain low, especially for materials like rare earth elements and platinum group metals, which are vital yet difficult to recover. Technical and economic barriers —such as high processing costs, limited availability, and regulatory hurdles— impede progress. This creates a vicious cycle where high costs discourage recycling efforts, affecting subsequent supply security.

Additionally, the EU intends to increase domestic extraction to cover ten percent of its raw material needs. However, exploration activities are underdeveloped, and even when new deposits are discovered, mining projects can take up to twenty years to become operational. Processing capacity is also shrinking, partly due to high energy costs, leading to a potential decline in processing capacity and supply chain bottlenecks. This problematic situation risks undermining the EU's renewable energy targets and strategic independence in the coming years.