Highlights

• The EU currently depends on China for 70-90% of rare-earth elements, creating a critical supply chain vulnerability.
• The Critical Raw Materials Act seeks to improve domestic extraction, processing, and recycling of essential materials.
• Strategic resource diplomacy with Africa and developing recycling infrastructure are key to achieving the EU's net-zero emissions goal by 2050.

The European Union faces a critical challenge in securing rare-earth elements (REE) essential for achieving its net-zero emissions goal by 2050, given its heavy reliance on Chinese imports for 70-90% of these materials. In response, the EU's Critical Raw Materials Act (CRMA) aims to diversify and strengthen supply chains by setting ambitious targets for domestic extraction, processing, and recycling. However, the CRMA requires refinement to streamline funding, establish impactful partnerships, and address domestic feedstock shortages, argues Rüya Perincek and Andreas Goldthau in this article.

CRMA: the Way?

The CRMA’s success depends on improving coordination among fragmented funding streams from national and EU sources, such as Germany’s €1 billion raw-materials fund and Italy’s similar initiative, and providing clear criteria for project eligibility. Resource diplomacy with Africa, home to 30% of the world’s mineral resources, is highlighted as a key strategy, with initiatives like AfricaMaVal (opens in a new tab) positioned to promote sustainable mining and downstream processing. Additionally, addressing the EU’s recycling shortfall—currently just 3% for light REEs and zero for battery-grade lithium—through partnerships with emerging markets is essential for meeting targets.

The recent news was published in Project Syndicate (opens in a new tab).

Uphill Trajectory

While the CRMA offers a framework for reducing dependence on imports and enhancing economic security, its implementation faces challenges, including global competition for secondary materials and the slow pace of developing domestic capacity. The authors emphasize that for the CRMA to truly bolster supply chain resilience and EU sovereignty, the European Commission (opens in a new tab) must ensure it is fit for purpose, addressing gaps in funding alignment, resource partnerships, and recycling infrastructure.