In a startling revelation, the European Court of Auditors (ECA) has highlighted the European Union’s precarious reliance on external sources for critical minerals and rare earth elements. This dependence poses significant risks to the EU’s ambitious renewable energy targets and its broader economic competitiveness. The ECA’s report, issued from Luxembourg, warns that without substantial advancements in domestic mining, refining, and recycling capabilities, the bloc’s goal to achieve 42.5% of its energy from renewable sources by 2030 is unlikely to be met.
A Call to Action
The ECA’s findings underscore an alarming gap between the EU’s green ambitions and its operational realities. Keit Pentus-Rosimannus, an ECA member involved in the audit, articulated the urgency of the situation: “It is therefore vital for the EU to up its game and reduce its vulnerability in this area.” The report reveals that mining and exploration activities within the EU are significantly underdeveloped, with the approval process for new mining projects taking as long as two decades. Such timelines render the prospect of meeting the 2030 deadlines increasingly improbable.
This report arrives at a critical juncture, as global leaders seek to diversify mineral supplies away from a heavy reliance on China and other nations in the global south. In recent discussions in Tokyo, UK Prime Minister Keir Starmer pledged to expedite collaboration with Japan on sourcing critical minerals. Concurrently, U.S. Secretary of State Marco Rubio has convened a summit of approximately 20 nations to strategise on diversifying mineral sources essential for green technologies, including lithium, nickel, and cobalt.
The Extent of Dependence
The ECA’s analysis reveals a troubling dependency on China, which dominates the supply chain for several essential minerals. For instance, the EU imports 97% of its magnesium—vital for hydrogen production—71% of gallium used in consumer electronics, and 31% of tungsten for mining operations. In the domain of rare earth elements, China controls between 69% and 74% of critical supplies, such as neodymium and praseodymium, which are indispensable for manufacturing permanent magnets found in various applications from automotive systems to renewable energy technologies.
The figures are stark: out of the 20,000 tonnes of permanent magnets consumed by EU industries in 2024, a staggering 17,000 tonnes are expected to originate from China. Furthermore, while lithium for electric vehicle batteries is predominantly sourced from Chile, Turkey has been identified as the supplier of 99% of boron used in solar panels.
The Risks of Inaction
The ECA’s report presents a dire warning: “Many strategic projects will struggle to secure their supply of critical raw materials by 2030.” Pentus-Rosimannus cautions that without a steady supply of these materials, the EU risks losing its competitive edge and failing to achieve its energy transition goals. The current trajectory suggests Europe may find itself trapped in a “vicious circle” of dependency, hampering its strategic autonomy.
The report criticises the EU’s existing partnerships with countries that exhibit poor governance, noting that these collaborations have resulted in a decline in supplies rather than an increase. Of the 26 critical minerals assessed, 10 are entirely imported, and none of the 17 rare earth metals are mined within the EU. Recycling efforts are also lagging, with only 16 critical raw materials recycled in the bloc.
Why it Matters
The implications of the ECA’s findings extend far beyond mere economic statistics; they underscore a fundamental challenge to Europe’s energy and industrial strategy. As the continent strives to transition to a sustainable future, its vulnerability to external mineral supply shocks could undermine both its environmental and geopolitical ambitions. A concerted effort to enhance domestic production and recycling capabilities is not just desirable; it is imperative for achieving a resilient, self-sufficient economy in the face of global competition and environmental challenges. The time for urgent action is now, as Europe seeks to reclaim its place in the global supply chain for critical minerals and safeguard its future economic stability.
