The EU risks not being able to secure critical raw materials on its own, and Bruegel says that trade agreements have delivered more than strategic partnerships.

A Bruegel policy brief shows that the European Union's strategic projects for critical raw materials are not sufficient to achieve self-sufficiency goals, and strategic partnerships with third countries have not yet produced measurable commercial effects. The authors state that trade agreements with provisions regarding critical raw materials have so far been the EU's most effective external tool, increasing exports of these materials to the Union.

The European Union cannot secure critical raw materials solely through internal projects and risks missing the self-sufficiency targets set for 2030, according to a Bruegel policy brief signed by Madalena Barata da Rocha and Camille Reverdy. The authors say that the EU needs better-targeted investments, trade agreements with binding provisions, long-term off-take contracts, and stronger coordination to avoid dependencies on concentrated suppliers, especially China.

In short

Critical raw materials are essential for batteries, wind turbines, solar panels, semiconductors, and digital technologies.

Bruegel states that the EU's 60 strategic projects do not seem sufficient to meet the goals of the Critical Raw Materials Act.

The EU's strategic partnerships with third countries have not yet produced measurable commercial effects.

Trade agreements with provisions regarding critical raw materials have so far been the most effective external tool.

The authors recommend a dedicated investment facility, realistic verification of projects, and off-take agreements with supplier countries.

Critical raw materials are metals and minerals without which the green and digital transition cannot advance. Lithium, cobalt, graphite, nickel, copper, and rare earths are used in batteries, electric vehicles, wind turbines, solar panels, semiconductors, electrical networks, robots, and industrial equipment. Global demand for these materials is expected to grow significantly by 2050.

Bruegel shows that lithium is the most visible case. Global demand could increase by 470% to 800% by 2050, depending on climate and technology scenarios. Demand for graphite and nickel is also expected to grow significantly, with estimates between 130% and 250%.

The problem is not just the increase in demand, but also the concentration of supply. A small number of countries dominate extraction and processing. China processes over 90% of the graphite used in battery anodes, refines over 75% of the world's cobalt, and controls 60% of global rare earth production and 90% of refining. The Democratic Republic of Congo supplies over 75% of the extracted cobalt, while for lithium, Australia, Chile, and China together account for 80% of extraction.

This concentration creates vulnerabilities for the EU. China has shown that it can use supply chains as a geopolitical tool, through export restrictions on rare earths in 2009 and 2012 and through controls on critical minerals and related products starting in 2023 and 2025. For the Union, the risk concerns not only raw materials but also intermediate stages, such as processing, magnets, or components used in clean technologies and electronics.

The EU adopted the Critical Raw Materials Act in 2024, which sets four benchmarks for 2030. At least 10% of annual consumption of critical raw materials should come from domestic extraction, 40% from domestic processing, 25% from recycling, and no more than 65% of the supply of a critical raw material, at a relevant stage of processing, should come from a single third country.

Bruegel, however, states that the current strategy is not sufficient. The first list of strategic projects includes 60 projects, of which 47 are in the EU. They benefit from faster authorization procedures, administrative support, and facilitated access to financing. However, the authors say that the practical advantages of the strategic project label remain limited, especially for projects outside the EU, where the label has mainly reputational value and does not guarantee funding.

The projects mainly cover lithium, nickel, copper, cobalt, and graphite, followed by rare earths. Most are in extraction, processing, or integrated extraction and processing projects, exactly the areas where European capacities are weaker. Recycling also plays a role, but Bruegel says that the recycling target seems harder to achieve.

The authors' estimates show that strategic projects could allow the EU to achieve some extraction and processing targets in a low-demand scenario for five critical raw materials. But these estimates are fragile, as they rely on figures reported by project promoters, not independently verified, and many data are missing. Developers also have an incentive to present optimistic future production to obtain strategic project status.

Another problem is that project allocation prioritizes estimated demand growth over dependency risks. Bruegel finds a positive relationship between future demand and the number of projects, with the exception of graphite, but does not find a systematic relationship between dependency on China and the number of projects. The projects do not sufficiently cover dependencies for magnesium, germanium, bismuth, barite, and vanadium, although there are many projects for graphite, cobalt, and rare earths.

Funding is another weak point. Bruegel identified at least 21 strategic projects that have received public support, totaling approximately 1.26 billion euros. Of this amount, 576 million euros come from EU instruments, 461 million from state aid, and 218 million from international financial institutions. The authors say that this level is far below the scale of the challenge and below the resources mobilized by the United States and Japan.

The EU also has strategic partnerships with third countries. By 2025, the Union had signed 15 partnerships regarding critical raw materials. These cover value chains, investments, processing, recycling, ESG standards, research, and infrastructure. Partners include Canada, Ukraine, Kazakhstan, Namibia, Argentina, Chile, Zambia, the Democratic Republic of Congo, Greenland, Rwanda, Norway, Uzbekistan, Australia, Serbia, and South Africa.

Bruegel states, however, that the strategic partnerships do not seem to have produced measurable increases in exports of critical raw materials to the EU so far. The reason is that many are more declarations of cooperation than binding commitments. In contrast, trade agreements with specific provisions for critical raw materials are associated with clearer outcomes. Exports of critical raw materials to the EU from partner countries with such agreements are, on average, 62.4 percentage points higher after the agreement is introduced.

These trade provisions can include bans or limits on export restrictions, rules regarding export taxes, monopolies, double tariffs, state-owned mining companies, transparency of licenses, and cooperation for sustainable mining. For the EU, these seem to work better than political memoranda without strong legal effect.

External competition is intensifying. Japan has begun to strengthen its policy for critical raw materials after Chinese restrictions on the export of rare earths from 2010-2011. Tokyo uses strategic stocks, foreign investments, guarantees, recycling, and substitution, through instruments such as JOGMEC. Bruegel says that Japan offers a model of stability and continuity for reducing dependence on China.

The United States has accelerated significantly since 2017. Laws such as the Bipartisan Infrastructure Law and the Inflation Reduction Act have supported extraction, processing, and recycling, especially for battery materials and clean technologies. Since 2022, over 19.2 billion dollars in federal support for mining and processing projects have been approved or are under review. Since early 2026, the U.S. administration has announced over 30 billion dollars in letters of interest, investments, loans, and other forms of support for critical mineral projects.

At the same time, the U.S. has intensified critical raw materials diplomacy through partnerships, funding for projects, and initiatives such as the Minerals Security Partnership, FORGE, and Project Vault. Bruegel says that the American model is more pragmatic, focusing on individual projects and large financial support, including in third countries.

The European Union is also involved in multilateral initiatives. The MSP Forum, co-chaired by the EU and the U.S., the G7 Critical Minerals Action Plan, the EU-U.S. agreements on critical materials, and initiatives such as Pax Silica show that major economies are trying to coordinate supply. But Bruegel warns that this diplomacy remains fragmented and overlapping.

One of the new discussions concerns minimum prices or price caps for critical minerals, promoted by the United States. The idea is to guarantee a price that makes investments in supply chains alternative to China viable. Bruegel says that the EU should be cautious: such mechanisms can support diversification but may increase trade tensions, reduce the competitiveness of downstream European producers, and create captive markets in favor of American investments.

The authors recommend that the EU prefer bilateral off-take agreements, i.e., long-term commitments whereby buyers agree to purchase a certain production from projects in supplier countries. These contracts can provide price stability without the EU entering into a formal minimum price regime with hard-to-control commercial effects.

Bruegel also recommends a dedicated investment facility for critical raw materials, with real resources, not just a combination of existing instruments. The authors say that the 3 billion euro funding hub for strategic projects is a first step, but its adequacy needs to be demonstrated.

The EU should make more use of public participation in capital and state guarantees for high-risk mining and processing projects, following models used by Japan and the United States. Support should focus on bottlenecks, especially for materials with low volume but high risk, where dependence on China creates the greatest economic threat.

The authors also call for credible verification of the volumes and timelines announced by strategic projects. Without independent validation, projects may appear sufficient on paper but fail to deliver the necessary production on time.

Recycling remains important, but it cannot replace primary sources and external supply. Bruegel says that recycling targets should be more ambitious, and product design should facilitate the recovery of raw materials, including through the future Circular Economy Act and the implementation of the Battery Regulation.

On the external side, the recommendation is that strategic partnerships be transformed, where possible, into binding commitments or integrated into trade agreements. These frameworks should include financing, off-take contracts, investment guarantees, and environmental and human rights standards, especially in countries with weaker governance.

Coordination among member states is equally important. Bruegel shows that national initiatives can double the EU's efforts, create competition among European states for the same resources, and weaken the Union's negotiating power with supplier countries.

The conclusion of the report is that the EU has strategies and tools, but still lacks a policy sufficiently focused on real risks. Strategic projects help, but do not seem to be funded enough and are not always aligned with the most dangerous dependencies. Political partnerships are useful, but without firm commitments produce few visible effects. Trade agreements, dedicated funding, and off-take contracts may count more for supply security.

The policy brief "Competing for inputs: how the European Union can improve critical raw materials supply security" was published by Bruegel on July 9, 2026. The authors are Madalena Barata da Rocha and Camille Reverdy.

https://2eu.brussels/ro/news-articles/ue-risca-sa-nu-isi-asigure-singura-materiile-prime-critice-iar-bruegel-spune-ca-acordurile-comerciale-au-livrat-mai-mult-decat-parteneriatele-strategice