The European Union is accelerating its move toward ecological and digital leadership to stay ahead of key rivals like China, Japan, and the United States. The risk of disruption in strategic sectors such as electric vehicles, energy storage, digital industries, aerospace, and defense comes from gaps in essential raw materials. To address this, the European Commission proposed a battery package this Thursday. The aim is to reduce reliance on non-EU suppliers, diversify partnerships, boost the circular use of strategic minerals, and strengthen Europe’s competitiveness in global markets.
Months earlier, Brussels began outlining how to speed up strategic autonomy in green and digital domains. The backdrop is the Inflation Reduction Act from the United States, which earmarks 369 billion euros to advance clean technologies. This financial push nudges Europe to move faster. The Commission proposed a vision for the twenty-seven member states to negotiate and reach agreement on a package that requires at least 40 percent of the clean technology used by 2030 to be domestically produced. The message from the Vice-President of the Commission, Frans Timmermans, was clear: cooperation with trading partners will continue, but more production must occur within Europe. The law is meant to set the preconditions for this outcome, as reported by the Commission’s leadership.
The initiative targets technologies that will drive decarbonization across Europe. It covers solar photovoltaic and solar thermal energy, onshore wind and offshore renewable power, batteries and storage, heat pumps, geothermal energy, electrolysers and fuel cells, biogas and biomethane, carbon capture and storage, and grid technologies. Projects of this sort will receive targeted support and be subject to a 40 percent domestic production criterion. Other initiatives that contribute to emissions reductions will also be eligible, including advancements in small modular reactors and alternative facilities to generate low-waste nuclear energy.
Alongside these plans, Europe is moving to launch the European Hydrogen Bank, a cornerstone of the Green Deal commitments. The idea is to kick off early pilots for renewable hydrogen production in the autumn of 2023. Winning projects will receive a subsidy in the form of a fixed premium per kilogram of hydrogen produced, lasting up to ten years. This structure is designed to lower capital costs and enhance project reliability. The EU auction platform is set to offer auctions-as-a-service to member states, thereby simplifying hydrogen production nationwide. Officials expect all components of the Hydrogen Bank to be fully operational within the year, according to Brussels.
More extraction in Europe
Access to critical raw materials stands out as a pivotal factor for a robust European green industry. The current bottleneck is Europe’s dependence on non-EU suppliers for both extraction and conversion. For instance, the EU relies on imports for 97 percent of its magnesium needs, while heavy rare earths used in magnets are refined primarily in China. Cobalt essential for batteries sees substantial processing in the Democratic Republic of the Congo, with China handling a large share of refining, and borates come predominantly from Turkey. These supply chains highlight Europe’s vulnerability as the energy transition and digitization intensify demand.
As the shift to renewable energy and digital economies gathers pace, demand for materials like lithium used in batteries and energy storage will surge. Projections show substantial growth by 2050 for several materials, including gallium used in semiconductors. The new critical materials law identifies 16 minerals as strategic due to their importance for the ecological and digital transitions and for defense and space applications. The list includes bismuth, cobalt, copper, gallium, lithium, magnesium, germanium, tungsten, rare earth elements for magnets, graphite, manganese, platinum, titanium, and others, and it will be reviewed every four years.
The regulation introduces faster permits for strategic projects, stronger supply-chain oversight, and a goal of expanding EU self-sufficiency to at least 10 percent of the minerals consumed by 2030. It also calls for processing 40 percent of what is consumed and recycling at least 15 percent. If these targets are met, the Commission indicates that each strategic raw material at any stage of the value chain should be sourced from a single non-EU country. Industry advocates stress that such alignment is essential for ensuring secure, stable access to critical inputs.
Member states are urged to adopt national measures that improve collection of waste rich in critical raw materials and promote recycling of secondary critical materials. They should also examine the potential to recover materials from extractive waste at historic mining sites and foundries. The plan relies on Europe’s Global Gateway strategy to foster cooperation with third countries, helping them build extraction and conversion capacities and forming a raw materials club for allied nations seeking stronger supplies. It includes securing access to raw materials within global value chains and advancing trade agreements with existing or new partner countries. Recent agreements with New Zealand and Chile include raw materials chapters, and talks with Australia continue. The aim is to create mutually beneficial partnerships that extend beyond resource extraction to improving supply chains, as stated by Valdis Dombrovskis in reference to these strategic efforts.