According to the study, the European Union’s measures to date to diversify raw material imports have not yet had any measurable effects. Bottlenecks in availability slow down industrial development within the EU, while the recycling of strategic materials plays only a minor role. Against this background, the auditors consider it unrealistic that numerous funded projects can be implemented within the planned time frame.
The transformation of the energy system is highly dependent on technical applications such as batteries, wind turbines and photovoltaic modules. Lithium, nickel, cobalt, copper and various rare earths, among others, are required for their production. A large proportion of these raw materials currently come from a few third countries outside the EU, including China, Turkey and Chile. The strong concentration of supply chains increases the vulnerability of European industry. To counteract this, the EU adopted a regulation on critical raw materials in 2024, which is intended to secure the long-term supply of 26 materials relevant to the energy transition.
According to the ACA, a stable supply is based on three pillars: diversified imports, an expansion of domestic production and efficient recycling. However, the Raw Materials Ordinance only provides for non-binding target values up to 2030, which also only apply to a limited group of so-called strategic raw materials. How these targets were set remains open. In addition, the time horizon is far in the future, while it is already becoming apparent that securing the supply of strategic raw materials by the end of the decade is unlikely to be achieved.
A central goal of the regulation is to reduce dependence on individual supplier countries. Although the EU has concluded 14 strategic raw materials partnerships in the past five years, seven of them are with countries whose political and economic stability is considered limited. Between 2020 and 2024, imports from these partner countries decreased for about half of the raw materials examined. Other initiatives are progressing slowly. Negotiations with the US were suspended in 2024, while the agreement with Mercosur, which includes resource-rich countries such as Argentina, Brazil, Paraguay and Uruguay, has not yet been ratified by all member states.
The auditors also see a considerable need for action in recycling. By 2030, at least 25 percent of strategic raw materials are to come from recycled sources. In fact, the current recycling rates for seven of the 26 relevant raw materials are between one and five percent, and ten materials are currently not recycled at all. Most of the existing targets are not tailored to individual raw materials and therefore provide little incentive for the recovery of particularly demanding materials, such as rare earths from electric motors or palladium from electronic waste. In addition, they do not sufficiently promote the use of recyclates. European recyclers face high processing costs, low input volumes available, and technological and regulatory hurdles, which significantly limit their competitiveness.
At the same time, the EU plans to increase production of some of its strategic raw materials within Europe and thus cover around ten percent of its own needs. In practice, however, raw material exploration is only weakly developed. Even with new discoveries, it can take up to two decades for a mining project to start operations. A noticeable contribution by 2030 therefore seems unlikely. In addition, despite the goal of processing 40% of the strategic raw materials consumed in the EU within the Union, existing processing plants are being closed. High energy costs, which weigh on the competitiveness of industry, are considered a major factor. The ACA warns of a self-reinforcing effect: an insufficient supply of raw materials inhibits the expansion of processing capacities, which in turn makes investments in securing supply less attractive.
The Court of Auditors makes five recommendations:
- Strengthening the foundations of the EU’s raw materials policy.
- Ensure that efforts to diversify imports lead to a more secure supply of critical raw materials.
- Remove the financing bottlenecks that hinder the expansion of the production of critical raw materials in the EU.
- Make better use of the sustainable management of resources to reduce dependence on primary critical raw materials.
- Increasing the added value of strategic EU projects.
