EU policy in the global race for critical raw materials

The new raw materials post- Industrial Revolution

Currently, the necessity  and commitment to switch to greener forms of energy production has never been more compelling. To that effect, the demand for the materials to build new products and systems that function on, or produce greener energy have substantially increased. As a consequence, these raw materials have now become as valuable and coveted as coal and iron deposits at the start of the Industrial Revolution. This article will attempt to cast some light on the EU position in this changing global market and the plans devised by the European Commission on this  matter.

Defining the critical metals

The  European Commission has over the years published several lists cataloguing all the critical raw materials for the main industries of the european countries, including the most energy consuming ones as well as for the renewables sector (this article uses the 2020 iteration of these lists named “Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability”.)

This  article will focus on the most commonly known materials that are included in this  list. These are cobalt, lithium and rare earth metals. While lithium and cobalt are well defined elements, the term rare earth metals itself encompasses a large number of elements that share the similar chemical characteristics.

Geographical Repartition

The repartition of known critical materials deposits is unevenly spread out over the world. For some of these, the deposits are at times almost exclusively located in a given country. A very striking example rests on these  rare earth metals (both light and heavy subclasses) for which about 86% of the world’s production is currently located  in China. For lithium and cobalt, deposits are more evenly spread out, with the former being located in Chile and China being the main producers and the latter in the Democratic Republic of the Congo and several others. 

Usage

As mentioned previously, the usage  of these materials permeate most fields of the modern industries. When it comes to their application to energy and renewables, they are even more critical. To avoid an overly long list of their application, only the uses of the previously mentioned elements will be explicated. The first, cobalt, is used in magnets and as a catalyst in chemical reactions, but more importantly, just as the other two elements in this shortlist, it is a key component in the making of batteries. The second, lithium, whose most important role consists in the assembly of batteries (lithium batteries being the most common type today, it is also used in metallurgic activities for the creation of lightweight alloys such as those used for bicycles and planes). Finally, the rare earth metals, which are further divided between light and heavy, the latter being rarer and thus more expensive. They are amongst the materials used to build electric engines and the like. As it can be observed, most electricity technologies which in turn play a  pivotal role for the green transition require these materials to function.

The main challenges ahead

As previously highlighted, these materials are imported to fulfil the EU needs at very high percentages with the principal trade countries being Chile (for lithium), China (for both types of rare earths) and the Democratic Republic of the Congo (for cobalt). 

The EU thus finds itself nowadays in an unenviable position. On the one hand, it needs to deal with the ever-increasing pressure for a transition to green, renewables energies. On the other hand, many of the resources needed for this transaction  are located and extracted beyond its borders, in countries with which sometimes the trade relationship may not be at an all-time high. Indeed, the Commission predicts that, by 2030, the Union’s dependency on Lithium and Cobalt alone will have increased by eighteen and six times, respectively.

Therefore, two main opportunities have been highlighted for the EU: increasing local production and developing the Union’s recycling capabilities of these materials. For the possibilities of these materials production, several countries within the Union, notably Portugal and Spain, have been identified as disposing reserves of these metals. The development of extraction would be consequently an invaluable help in the EU effort to diversify its sources of supply. 

In regards to recycling, the EU is still behind some countries such as, for example, Japan (see G. Pitron, “La guerre des métaux rares”). Currently, cobalt is the most recycled one, reaching 22% of the demand (EU list 2020). Aside from the obvious EU’s geopolitical interest to reduce its external dependency on materials, the increased recycling of these materials would also help reduce their ecological impact. Often, it is forgotten that the extraction and processing industry of these products is amongst the most polluting in the world (see G. Pitron, “La guerre des métaux rares”). Moreover, the foreseeable increase in the quantity of needed materials reinforce the case for the recycling option as existing reserves in the EU will not be able to keep up with demand.   

The two possible outcomes

It can be seen as ‘ironic’ that the green transition relies heavily on such rare and polluting materials to refine metals. The concentration of their location and extraction process in such a restricted number of countries- none in the Union- creates, in the current international scenario, a potential danger for the EU’s green transition. As aforementioned, there are two main choices for the EU to pursue to improve diversification and self-sufficiency. Among them, only the second option, if developed adequately, can hope to meet the future demand. This path is still long especially when it comes for lithium and rare earth metals, which combine the enviable titles of being the least present in EU’s deposits and the least recycled materials. Whether the EU will adopt this path or, with the development of new technologies, unlock new choices, is something that only time will tell.

This article was first published in the issue 37 of the magazine