Critical raw materials security: EU faces tough supply battle
The European Union is locked in an intensifying global competition for critical raw materials, and a new analysis from the Brussels-based think tank Bruegel warns that without sharper policy tools, the bloc risks falling dangerously behind in the race to secure the inputs its green and digital transitions depend on.
The stakes are enormous
Lithium, cobalt, rare earth elements, manganese — these aren’t obscure commodities. They’re the backbone of electric vehicle batteries, wind turbines, semiconductors, and defense systems. The EU currently imports roughly 98% of its rare earth elements from China, and that single dependency alone keeps policymakers up at night. The Critical Raw Materials Act, which entered into force in May 2024, set targets to extract at least 10% of the EU’s annual consumption domestically and process 40% within its own borders by 2030. Bold numbers. But hitting them is another matter entirely.
Bruegel’s researchers argue that the EU’s approach has been too reactive and too fragmented. Member states are essentially competing against each other for the same supplier relationships, diluting European leverage at exactly the moment when unified bargaining power matters most.
Who’s winning — and why
China didn’t build its dominance over critical minerals by accident. It invested systematically for decades, locking in long-term contracts across Africa and Latin America, subsidizing domestic processing industries, and tolerating environmental costs that Western regulators wouldn’t allow. The United States, for its part, deployed the Inflation Reduction Act as a blunt but effective instrument, dangling hundreds of billions in subsidies to pull supply chains toward North America.
The EU, by contrast, has moved more cautiously. And that caution has a cost.
“Europe needs to think like a strategic actor, not just a regulatory one,” said one senior trade policy official familiar with the Bruegel findings. “The rules-based approach is important, but it won’t secure a lithium contract in Chile.”
What Bruegel is recommending
The think tank’s analysis lays out several concrete directions. First, the EU should consolidate its external procurement efforts — essentially, acting as a single buyer in key markets rather than letting individual member states cut separate deals. Second, it needs to deepen its strategic partnerships with resource-rich countries in Africa, Central Asia, and Latin America, offering genuine development finance rather than just trade agreements. Third, recycling infrastructure demands far more investment. Europe currently recovers only around 1% of its lithium from end-of-life products. That figure needs to climb sharply.
Permitting reform inside the EU is also critical. Domestic mining projects that could contribute meaningful supply are stalling for years in approval processes — a problem the Critical Raw Materials Act was meant to address but hasn’t fully solved yet.
A narrow window
Time isn’t neutral here. Supply chains for the clean energy transition are being locked in now, and contracts signed in the next three to five years will shape industrial geography for decades. Still, the EU does hold real cards: a massive consumer market, sophisticated technology, and genuine soft power in many resource-rich regions. Whether Brussels can translate those advantages into supply security before the window narrows further is the central question heading into 2025 and beyond.
