The EU risks being ‘weaponized’ by other nations unless it moves urgently to close more trade deals for the supply of critical raw materials, EU commissioner for internal market Thierry Breton said on Thursday.
ADVERTISEMENT“It’s fair to say that we lost. We lost our competitive edge in mining and in processing,” Breton said during the International Energy Agency (IEA) summit, held in Paris.
“This is because we have fewer reserves than in other regions, administrative complexity, energy costs, but also because we have for too long considered that decarbonising meant relocating outside of the EU, and this was wrong,” he added.
The EU is heavily dependent on third countries for the supply of minerals needed to produce critical technologies such as batteries for electric vehicles and semiconductors, with China dominating the global market for critical minerals.
Securing approval permits for mining projects and processing plants also takes a long time in the EU, putting the bloc at a competitive disadvantage.
The EU’s Critical Raw Materials Act (CRMA) adopted in March aims to boost domestic production and diversify trade partners in order to reduce China’s stranglehold on vital elements.
It sets a target for the EU to process at least 40% of its annual consumption of raw materials by 2030. The bloc currently relies on China for 80% of its lithium and 100% of its heavy rare earth mineral supplies, with Beijing recently limiting its exports of two critical metals, gallium and germanium, into the EU.
“We are now clear that in the EU we cannot replace a fossil fuel dependency with a raw material one,” Breton said.
The warning came as Australian resources minister Madeline King tours Europe to promote her government as a reliable trade partner. Earlier on Thursday, she signed a cooperation agreement for the supply of critical materials with French energy transition minister Agnès Pannier-Runacher.
But earlier this week, King warned the EU risks “missing the boat” on the supply of the raw materials needed to electrify its economy if it doesn't move as quickly as its competitors.
Breton confirmed agreements with the Democratic Republic of Congo (DRC) and Australia should be closed "in the coming months". The bloc recently signed similar deals with Canada, Namibia, Argentina and Chile.
He also emphasised that agreements should be "mutually beneficial", amid concerns the EU could be incentivising the scale-up of mineral extraction without considering the impact on local communities.
The EU’s €300 billion Global Gateway investment programme will be used to incentivise raw materials projects in partner countries, Breton said.