Estimated time of reading: ~ 6 minutes

Critical raw materials (CRMs) have emerged as a cornerstone of the European Union’s economic strategy, shaping its industrial base, technological advancement, and green transition. As the EU accelerates efforts to achieve climate neutrality, digital leadership, and strategic autonomy, the availability and security of CRMs have become central to both economic resilience and global competitiveness.

CRMs are raw materials of high economic importance to the EU, characterized by a high risk of supply disruption due to their concentration in a few countries and limited availability of substitutes. They include metals and minerals such as lithium, cobalt, rare earth elements, and graphite—essential inputs for batteries, renewable energy systems, electronics, aerospace, defense, and more.

Their significance can be summarized as follows: they underpin major industrial value chains, enable modern technologies, and are critical to the EU’s green and digital transitions. However, the EU remains heavily dependent on imports, often from a single source, such as China. This concentration exposes the EU to geopolitical risks and jeopardizes the stability of strategic sectors.

Global demand for CRMs is growing rapidly, driven by decarbonization and technological expansion. EU demand for rare earth metals and lithium is projected to rise dramatically by 2050, fueling intense global competition. Disruptions in supply can stall production, cause inflation, and delay climate and digital goals.

To address these risks, the EU has adopted the Critical Raw Materials Act (CRMA), a legislative framework aimed at securing and diversifying supply. It focuses on reducing import dependence through international partnerships, boosting domestic mining, processing, and recycling, and supporting innovation and substitution.

Strategic projects designated under the CRMA in 2025 include initiatives across the EU and in partner countries, targeting extraction, processing, recycling, and research. These are expected to draw substantial investment and build resilience in critical sectors.

The implications for the EU economy are profound. Stable access to CRMs supports industrial competitiveness, especially in clean technologies and advanced manufacturing. It is also central to achieving the EU’s climate neutrality by 2050 and strengthening its strategic autonomy in a geopolitically tense landscape. The CRMA also nurtures innovation, helps SMEs, and promotes sustainable and socially responsible supply chains.

Nonetheless, challenges persist. Full autonomy is unlikely, given global resource concentrations. Domestic production faces regulatory and social barriers, and competition for resources continues to intensify. Still, the EU’s comprehensive approach—anchored in policy, investment, and cooperation—offers a path to greater resilience.

Critical raw materials are shaping the future of the EU economy. From industry and innovation to climate and security, their role is pivotal. The EU’s strategy reflects a recognition of their importance and a determination to secure its place in a rapidly transforming global landscape.

Written by: Nenad Stekić