Key Points:
- The EU has failed to diversify its supply of critical minerals despite the 2024 legislation.
- High energy costs are forcing European mineral processing plants to close.
- Imports from the EU’s strategic partner countries have dropped rather than increased.
- The U.S. is launching a $12 billion mineral stockpile to secure its own supply.
The European Union’s ambitious plan to break its dependence on foreign countries for essential minerals is failing, according to a stark new report from the European Court of Auditors (ECA). Despite launching a major strategy two years ago to secure materials needed for everything from electric cars to defense weapons, the bloc has seen almost no real progress.
In 2024, the EU passed the Critical Raw Materials Act, setting goals to mine, process, and recycle more of its own supply of 34 strategic materials like lithium, copper, and rare earth elements. The aim was to reduce reliance on dominant suppliers like China, Turkey, and Chile. The targets for 2030 included extracting 10% of these minerals locally and processing 40% within the EU.
However, the auditors found that the “outlook is not promising.” Recycling rates are dismally low; out of 26 materials needed for green energy, ten are not recycled at all, and seven have recycling rates below 5%.
Even worse, instead of growing, the EU’s capacity to process these minerals is actually shrinking. High energy costs are forcing existing processing plants to shut down, making European companies less competitive on the global stage.
The EU also tried to solve the problem by signing deals with other nations. Over the last five years, Brussels signed 14 strategic partnerships to import raw materials. Yet, for half of the materials studied, imports from these partner countries actually dropped between 2020 and 2024. The report also noted that many of these partners have “low governance scores,” adding political risk to the supply chain.
To try and fix this, the European Commission proposed a new plan called “RESourceEU” in December, which includes investing over $3.5 billion to speed up projects. Meanwhile, the United States is moving aggressively, with the Trump administration planning a $12 billion strategic stockpile for critical minerals.
As EU ministers meet in Cyprus this week, the pressure is on to prove Europe can stay in the race against American and Chinese rivals.
