In order to develop domestic sources of essential raw materials for the energy transition, European companies, including automakers and financial institutions, are being called upon to ramp up investment in critical minerals. Bernd Schaefer, CEO of EIT RawMaterials, emphasized the need for greater equity investment from financial institutions and increased commitment from downstream players, stressing that this shift is crucial for advancing in accordance with the Critical Raw Materials Act (CRMA) and the EU’s ambitious roadmap to accelerate the production of minerals essential for electric vehicles (EVs) and wind turbines.
Under the CRMA, the European Union has set 2030 targets for domestic production of critical minerals, aiming for 10% of annual needs to be mined, 25% to be recycled, and 40% to be processed within Europe. The demand for raw materials such as copper, nickel, and rare earths is projected to surge, with the EU estimated to require significantly greater quantities of lithium and cobalt by 2030 to support its green transition.
While countries like France, Germany, and Italy have initiated national investment funds to support critical mineral projects, Schaefer emphasized that more action is necessary. He highlighted the contrast with the U.S., where the Inflation Reduction Act offers substantial tax breaks for domestic production in the electric vehicle and renewable energy sectors.
Schaefer pointed out the collaboration between Germany’s Vacuumschmelze (VAC) and General Motors (GM) in building a North American factory for rare earth permanent magnets, underscoring the significance of implementing an EU action plan for permanent magnets proposed in 2021. He emphasized the need for European companies to overcome risk aversion and adapt to the evolving landscape, expressing optimism that they will rise to the challenge.