Ecological and digital transition: focus on critical raw materials

The document illustrates the importance of critical raw materials for many strategic technologies in the renewables, electric mobility, defence and aerospace sectors and sets out potential areas where Europe and Italy could intervene with a view to establishing the strategic autonomy that is essential for the ecological and digital transition.

Read the report’s key messages and download the document for further information.

• Critical raw materials, defined as such because of their economic importance and associated supply risk, are crucial for the production of many of the strategic technologies involved in achieving the European objectives of climate neutrality and digital leadership.
• However, EU countries  depend on imports for more than 80% of their critical raw materials and often play a marginal role in other stages of these technologies’ value chains.
• European industry risks failing to take on a leadership role in strategic supply chains for the ecological and digital transition, as well as  undermining its ability to achieve the sustainable, inclusive and lasting development goals that underpin the Green Deal and Digital Compass.
• In fact, looking forward to a scenario compatible with climate neutrality, the European Commission estimates that by 2050 the EU’s annual demand for lithium could be 56 times current levels, demand for cobalt 15 times greater, and demand for rare earth elements ten times greater.
• Against the current backdrop of global volatility, the EU is therefore exposed to potential interruptions in the supply of critical raw materials due to limited domestic production and dependence on supplies from countries with high geopolitical risk.
• The issue is at the heart of European debate and should lead, in March, to the enactment of the European Critical Raw Materials Act, focused on diversifying supplies and promoting circularity.
• The circular economy, in fact, can make a significant contribution to alleviating the mismatch between supply and demand. Through recycling spent batteries, by 2040 the EU could meet more than half the demand for lithium (52%) and cobalt (58%) brought about by electric mobility. In particular, there is interesting potential in recycling the following:
  • discontinued technological products, which are seeing strong growth and feature a high concentration of critical raw materials;
  • extractive waste, stored in large quantities in Italy and a possible alternative source of secondary raw materials.
• Recycling alone is not, however, sufficient to secure the EU's strategic autonomy. Further activities to aid the supply risk mitigation strategy are necessary, such as:
  • investments in technologies, expertise and skills to manage the life cycle of critical raw materials within the EU, increasing the resilience of industrial ecosystems;
  • relaunching mining activities in a sustainable way within the EU;
  • strategic partnerships to strengthen trade relations with third countries rich in critical raw materials