Policy Project: Beyond dependency: Identifying pitfalls and potentials in the EU’s approach to diversifying strategic raw material supplies

A future-proof economy—built on clean energy, electrified mobility, and digital infrastructure—requires significant amounts of minerals and metals, for which the EU heavily relies on third countries. However, Covid-19, the Russian invasion of Ukraine, and rising geopolitical tensions have exposed the risks of such dependencies. The EU hence seeks to diversify its raw material supplies: The Critical Raw Materials Act (CRMA) aims to ensure that by 2030 no more than 65% of its consumption of each of the 18 strategic minerals comes from a single coutry. Yet, diversification may fall short as the processing of many raw materials and their further manufacturing is mostly located in China, obscuring indirect dependencies. Moreover, Chinese companies dominate mineral extraction in many resource-rich regions. Lastly, the incentives to apply for “strategic projects” in third countries under the CRMA are likely to prove insufficient to substantially further diversification efforts. This project will hence explore how to operationalize diversification for sustainable and resilient EU mineral supply chains with a focus on lithium and rare earth elements.