Critical raw materials on the rise in the EU

Every three years the EU draws up a list of critical raw materials in strategic sectors

They are essential because of their economic importance, but at the same time their supply carries a risk, which is why they are called critical raw materials. They are found in the earth’s subsoil and many have curious names such as tantalum, gallium, beryllium, niobium or scandium. These materials are very important for strategic sectors, mainly digitised ones, and are generally critical because they are produced in other countries and their supply can be affected by international crises.

Since 2011, the European Union has been publishing and updating a list of critical raw materials every three years, as it depends on several countries to import them, especially China. This list is used to analyse the evolution of the production of these materials, the market concerned, the associated technology and the possible risks that may arise.

Why they are critical raw materials

Critical raw materials for the European Union are present in many everyday or familiar items, such as mobile phones, computer screens, energy-saving light bulbs, drones, 3D printers, electric car batteries and solar panels, to name but a few. Currently, the latest 2020 list determines that there are 30 materials that make up the list (an increase from the 2017 list of 27). But what parameters does the EU use to determine which raw materials are critical?

· Their supply risk: global suppliers and countries supplying the EU with raw materials are taken into account, as well as the level of risk of supply disruption based on governance and trade aspects. The options of recycling these raw materials (if possible) or substituting them with other raw materials are increasingly considered here.

· Economic importance: assesses the importance of the raw material in terms of end-use applications and the added value they may have in EU manufacturing sectors.

The risks of these materials

In the EU, very few countries produce critical raw materials in large quotas: Spain produces 100% of strontium; Germany 35% of gallium; Finland 51% of germanium or France 84% of hafnium and 28% of indium. As a result, external dependence is very high, mainly on China (the EU is 98% dependent on its rare earths).

There are other factors that make it important to replace their use, such as the toxicity of their production process, the damage they cause to the environment (radioactive soil dumps, excessive use of water in their extraction, contamination of groundwater, etc.) and the inhumane conditions in which the people who extract them from the subsoil may work.

To avoid instability of supplies, the EU has launched the Critical Raw Materials Act, which is expected to be adopted in 2023 and is based on the control of the entire supply chain: production, processing, refining, recycling and strategic reserves. And also the European Raw Materials Alliance, all with the aim of diversifying production sources and reducing dependence on third countries. According to the World Bank, demand for these raw materials is set to soar by 500% by 2050, so there is a real urgency to act to avoid future energy and supply crises.