Red tape, bad targets hobble Europe in critical minerals race

As the global race to secure critical minerals intensifies, Europe is already lagging far behind the United States. The European Union (EU) has set ambitious targets to reduce its import dependency on critical raw materials, and in March last year selected 47 strategic projects for fast-track approval and construction. It added another 13 non-EU projects in June. But around 18 months later, 23 of these projects are facing "immediate jeopardy", according to a collective warning submitted to the European Commission. For one EU-backed project, it's already too late. France's Viridian Lithium, which aimed to supply 10% of the bloc's demand for the battery metal, collapsed into bankruptcy in March. The EU says it has mobilised €1.7 billion ($1.97 billion) in financing for strategic projects since December. Contrast this with the U.S., where the Trump administration boasts of approving 160 mineral deals worth over $40 billion. The bloc's inability to finance even its most important projects is symptomatic of its stumbling progress toward achieving its stated goal of "strategic autonomy". "The selection of Viridian as an EU strategic project was a curse," according to Luc Pez, Viridian Lithium's former chief commercial officer. The promised investment never materialised, and private investors lost patience and bailed out. Others are now clearly in similar peril. Independent think-tank ODI could find "no evidence of financial commitment for 40% of the projects" in a June "reality check" on the EU's minerals policy. The core problem, according to a February report from the European Court of Auditors (ECA), is that financing is fragmented across too many Commission directorates. Information on projects and initiatives is "scattered" across different departments, it said, adding there was "no proper tracking of results". While the U.S. has taken an all-of-government approach to building its critical supply chains, the EU has become lost in its own decision-making complexity. The elevation of projects to "strategic" status was supposed to be a way of cutting through the red tape, but it doesn't seem to be working. Conspicuous by its absence in the EU's attempt to rebuild domestic metallic supply chains is any serious investment in exploration. The EU lags competitors in exploration expenditure by a factor of six to seven, according to an analysis by the European Investment Bank. It argues that expenditure would need to rise tenfold to €2 billion per year over the next five years to lay the foundations for future mining operations. Even for those few mining projects with economically viable resources, permitting remains a major bottleneck, with outcomes and processes diverging significantly across member countries. The bloc's metals processing sector, meanwhile, is suffering from high energy prices and intense competition, mostly from China. The chances of the EU getting anywhere near its 2030 targets look remote right now, as it doesn't appear to have found the right policy mix to accelerate its critical minerals strategy. Until it does, it risks becoming ever more vulnerable to external pressures, particularly China's tightening chokehold on metals that sit at the heart of Europe's green manufacturing ambitions. Underlying the immediate financing issue is a more fundamental problem. The EU's ambitions were laid out in its 2024 Critical Raw Materials Act, which set "benchmark" targets of mining 10%, processing 40% and recycling 25% of the bloc's needs by 2030. No more than 65% of imports should come from a single third-country source by that year. But the targets are non-binding, cover only a subset of 17 metals and lack justification, according to the ECA. Neither indium nor tellurium, for example, is deemed strategic, even though both are essential inputs for green technologies and feature on everyone else's critical metals list. Moreover, since the targets are aggregated for all strategic raw materials, there is no differentiation between widely divergent individual supply chains. Copper, for example, accounts for 18% of EU strategic projects, even though the bloc's current production of both mined and refined metal is comfortably above the threshold targets, according to ODI. Rare earth projects number just five, three of them for recycling, despite a near-total import dependency on China for these enablers of modern technology. While the EU's raw materials policy sets a strategic course, "it rests on incomplete foundations," the ECA warned. The incoherent starting point is translating into a scatter-gun approach to investment, even when funds are forthcoming.

Red tape, bad targets hobble Europe in critical minerals race

Europe lags in critical minerals race

Fragmented financing and weak tracking

Exploration and permitting remain bottlenecks

Targets are broad, non-binding and incomplete

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