The European Union is struggling to secure the supply of raw materials needed to meet its energy and climate targets, according to a new report by the European Court of Auditors (ECA). Efforts to diversify imports are failing to deliver tangible results, domestic production is hindered by persistent bottlenecks, and recycling remains at an early stage. As a result, many EU-funded projects are unlikely to materialise on time, the auditors warn.

Europe’s transition to renewable energy relies heavily on technologies such as batteries, wind turbines and solar panels, all of which require essential raw materials including lithium, nickel, cobalt, copper and rare earth elements. The supply of most of these materials is currently concentrated in just a handful of non-EU countries, notably China, Turkey and Chile, exposing the bloc to significant geopolitical and economic vulnerabilities.

To address this dependency, the EU adopted the Critical Raw Materials Act (CRMA) in 2024, aiming to secure long-term access to 26 minerals deemed essential for the energy transition.

“Without critical raw materials, there will be no energy transition, no competitiveness and no strategic autonomy. Unfortunately, we now depend dangerously on a few countries outside the EU for the supply of these materials,” said Keit Pentus-Rosimannus, the ECA member responsible for the audit. “It is therefore vital that the EU steps up its efforts and reduces its vulnerability in this area.”

Diversification, recycling and domestic production lag behind

According to the auditors, securing supply requires a combination of import diversification, increased domestic production and higher recycling rates. However, the CRMA sets non-binding targets for 2030, which apply only to a limited number of strategic raw materials. Moreover, the methodology used to define these targets remains unclear.

The report concludes that the EU still has a long way to go to meet its objectives and is unlikely to secure sufficient supplies of strategic raw materials by the end of the decade.

Despite signing 14 strategic partnerships on raw materials over the past five years — seven of them with countries that score low on governance indicators — tangible results remain limited. Imports from these partner countries actually declined between 2020 and 2024 for around half of the materials examined. Other initiatives have stalled, including negotiations with the United States, which were suspended in 2024, while the EU-Mercosur agreement with Argentina, Brazil, Paraguay and Uruguay — all rich in critical raw materials — has yet to be ratified by all EU member states.

Recycling targets remain out of reach

The CRMA also requires that at least 25% of the EU’s strategic raw materials come from recycled sources by 2030, but current trends suggest this goal will be difficult to achieve. At present, seven of the 26 materials needed for the energy transition have recycling rates of just 1% to 5%, while ten are not recycled at all.

Moreover, most EU recycling targets are not material-specific, limiting incentives to recycle particularly challenging elements, such as rare earths used in electric drives or palladium in electronics. European recyclers also face high processing costs, limited material availability, and significant technological and regulatory barriers, all of which undermine their competitiveness.

Domestic extraction faces long delays

The EU aims to meet 10% of its strategic raw material consumption through domestic extraction, yet exploration activities remain underdeveloped. Even when new deposits are identified, mining projects in the EU can take up to 20 years to become operational, making any meaningful contribution by 2030 highly unlikely.

Processing capacity, which the EU hopes to raise to 40% of its consumption by 2030, is also under pressure, with facilities closing partly due to high energy costs that erode competitiveness. The auditors warn that Europe could become trapped in a vicious circle, where supply shortages discourage processing investments, which in turn further weaken incentives to secure raw material supplies.

A growing strategic vulnerability

Overall, the ECA warns that unless decisive action is taken, Europe’s ambitions to lead the global energy transition could be severely constrained by raw material shortages, leaving the bloc increasingly exposed to external dependencies and supply chain disruptions.