Meeting the costs of resilience: The EU's Critical Raw Materials Strategy must go the extra kilometer
- Europe's green transition is expected to generate a substantial increase in demand for critical raw materials (the same holds true for the digital transformation that lies outside this inquiry). European firms heavily rely on imports for these minerals, with a significant amount coming from China. This geospatial concentration of supply chains exposes Europe's climate and green industrial policies to significant geopolitical risks. This complex of issues prompted the European Commission to introduce the Critical Raw Material Act in March 2023. Albeit a valuable addition to Europe’s strategic autonomy agenda, the Act does not rise to the scale of the challenge. Internally, it aims to develop a European value chain for critical raw materials by streamlining permitting processes without committing any new funds. Externally, it reframes existing trade instruments and partnership initiatives without providing a step-by-step schedule for tapping into new sources of supply. If the EU is intent on reducing its vulnerabilities it must recognize that resilience comes with a price tag. It needs to marshal meaningful European funding and administrative support provisions, set realistic diversification requirements for European companies via regulation, and back its external trade and partnership strategies with convincing resources.