Raw Material Demands for the Green Transition: Risks, Opportunities, and Required Actions to Meet the 2030 Climate Targets

Renewables, electric mobility and the building of a circular bio and hydrogen economy are at the heart of Europe’s green transition. The EU however, like other nations, has underestimated the material intensity of the green transition including the unprecedented levels of extraction it generates, the socio-economic impacts along the entire life cycles of technologies and related materials value chains, and its significant global environmental footprint. To fulfill its ambitious climate neutrality goals in competitive market conditions, nonetheless, the Union must ensure a sustainable supply of raw materials and advanced materials, ramp up its industrial capacity for a circular economy, and ensure a resilient supply of low-cost clean energy. Yet Europe remains highly import dependent on critical and strategic raw materials, which include, for example, silicon, copper, rare earths, nickel, cobalt, graphite, manganese, and platinum group elements. Moreover, parts of the value chain are highly concentrated, often in China. This chapter will examine how the EU, and Germany in particular, now address these important shortages and challenges by recognizing the need for joint public private investments to not only shoulder the green transition but also to support new market opportunities. The Union has, thus, created industrial alliances on hydrogen, batteries, semiconductors, and raw materials to address regulatory bottlenecks and spotlight investment opportunities. To enable the green transition, however, further support is required for the creation of robust circular value chains with global as well as domestic footprints.