“Europe’s Dependence on Critical Raw Materials Puts Prosperity at Risk”

by | 21. Feb 2023 - 12:39 | Economy

Mistakes in natural gas procurement must not be repeated – economic experts call for diversification of supply chains and expansion of own capacities.

The Ukraine war and the accompanying energy crisis have also brought Europe’s dependence on critical raw materials such as rare earths into focus. These dependencies not only threaten Europe’s prosperity and competitiveness, but also make it vulnerable to blackmail, write economic experts Veronika Grimm (German Council of Economic Experts) and Christina von Rüden (German Electrical and Digital Manufacturers’ Association, ZVEI) in Table.Media. Now is the time to act if the mistakes made in the procurement of natural gas are not to be repeated, the authors demand with regard to the planned EU Critical Raw Materials Act.

First, they say, the procurement of critical raw materials must be diversified; by providing the right framework, governments can support companies’ efforts. The authors recommend a so-called Critical Raw Materials Club, a global alliance of like-minded partners, as already proposed by EU Commission President Ursula von der Leyen. This is because like-minded countries are also likely to compete for critical raw materials in the future, Grimm and von Rüden say, but a special cooperation framework could enable mutual assistance in the event of local shortages.

They also call for the conclusion of new trade agreements to gain access to untapped deposits, particularly in Africa and Latin America. Central to this, they say, are partnerships of equals and compliance with local environmental and social standards.

Revitalizing Europe’s Mining Industry

In addition, however, Europe should also mine and process raw materials itself in order to reduce foreign dependence. For a successful revival of the European mining industry, the authors advise involving the local population. They refer to a change in the law in Portugal, according to which local residents can now also benefit from mining profits and not just the state, as was previously the case. With regard to possible environmental impacts from mining, the costs should be “carefully” weighed against the benefits of a global reduction in emissions.

Finally, as a possible instrument for reducing import dependency, the European recycling infrastructure for critical raw materials should also be strengthened.

Photo: iStock/Baloncici

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