ITo European Commission published in mid-March its strategy concerning critical raw materials (CRM, for Critical Raw Material), which includes a list of 51 minerals that it describes as “soon to be more important than coal and oil”. The Commission has been following this issue closely since 2008 because it involves resources necessary for the production of many key technologies for the energy transition, such as wind turbines, solar panels and electric batteries.
Thus, the decarbonization of energy systems requires large quantities of these minerals, including lithium, nickel, cobalt, copper and rare earths. As the European Union (EU) produces only a tiny part of its needs on its territory, large dependencies on third countries appear.
Diversification and securing
The objective of the European Commission is clear: to guarantee the European supply of critical raw materials over the long term, despite two factors: an expected explosion in demand by 2050 and strong dependence on the entire value to non-European countries and in particular China.
The announced strategy is based on two pillars. First, Europeanise value chains, ie increase the percentage of minerals produced and refined that depend solely on the EU. Thus, a tenth of the strategic raw materials will have to be extracted within the EU, against 3% currently. At least 40% of materials processing and refining will also have to be done in the EU, compared to less than 20% today, and recycling targets are set at 15%.
Secondly, the Commission wants to embark on a strategy to diversify the source of imports, which means increasing the percentage of produced and refined minerals that depend on countries allied to the EU.
To achieve this intermediate objective, the Commission plans to secure supply chains through trade with neighboring countries. To this end, free trade agreements have already been concluded with the member countries of Mercosur [Brésil, Argentine, Uruguay, Paraguay] (2019), Canada (2021), Chile (2022) and Kazakhstan (2022). Agreements with Indonesia and Australia are also being negotiated.
At a market price
If the European Union is worried today about its dependence on raw materials, it is certainly right. Some conclude from this situation the need to regain independence, even a form of “economic sovereignty”, by relocating these activities as much as possible on European territory.
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