EU Could Meet 80% of Critical Raw Material Demand with Planned Projects
The European Union's shift towards clean energy and digital technologies is driving a rapid increase in the demand for critical raw materials, with forecasts showing exponential growth in the coming years. As the EU moves away from fossil fuels, materials such as lithium, cobalt, and nickel — essential for batteries, renewable energy technologies, and the defense industry — are becoming increasingly important. However, much of the current supply is concentrated in non-EU countries, creating significant supply chain risks.
Countries such as China, Turkey, Chile, and South Africa dominate the global supply of key minerals like heavy rare earths, boron, lithium, and platinum, respectively. This dependence has prompted the EU to take steps to reduce its reliance on external sources. The recently approved Critical Raw Materials Act aims to develop domestic resources, diversify supply chains, and promote recycling. The Act sets ambitious targets: the EU aims to locally extract 10% of its annual critical raw material consumption, process 40% within its borders, and meet 25% of demand through recycling. Additionally, no third country should provide more than 65% of the EU’s annual consumption in any part of the value chain.
A study by Transport & Environment (T&E) shows that the EU could surpass these goals by focusing on key strategic projects, particularly for materials like lithium, cobalt, manganese, and nickel, which are vital for battery production. If 19 proposed processing plants for these metals are built, the EU could meet 60% of its lithium demand by 2030, as well as up to 80% of its overall demand for critical metals.
While nickel production currently lags behind, innovations in Finland's extraction processes could significantly boost sustainable production in the coming years. Recycling also holds immense potential, with estimates suggesting that recovered lithium, nickel, cobalt, and manganese could meet 40% of Europe’s needs by 2030. Efficient collection and recycling systems could push this figure even higher, potentially covering up to two-thirds of demand by 2040.
Despite the promising outlook, many projects remain in the early stages and require final investment approvals and permits. T&E stresses that the projections depend on the timely execution of these projects and cautions that the EU must prioritize investment and regulation to meet its targets.
The organization concludes that with appropriate policies and investments, the EU could significantly reduce its reliance on imports and secure a more sustainable supply of critical raw materials to support its energy transition and digital transformation.
