EU auditors warn of raw materials risk to energy transition
Kelvin Ross
Posted on: 3 February 2026
European Union must “up its game and reduce its vulnerability” over raw materials for renewable energy technologies says report.
A report is warning that the EU’s energy and climate goals are under threat because of difficulties in securing raw materials for renewable energy technologies.
The study by the European Court of Auditors (ECA) finds that the bloc is facing a raw materials trilemma: action on import diversification is not producing tangible results, domestic production is hitting bottlenecks, and recycling is still in its infancy.
And the ECA warns that against this backdrop, many EU-backed energy projects are set to fail because of the lack of materials.
“Without critical raw materials, there will be no energy transition, no competitiveness, and no strategic autonomy,” said Keit Pentus-Rosimannus, the ECA Member responsible for the audit.
“Unfortunately, we are now dangerously dependent on a handful of countries outside the EU for the supply of these materials,” she added. “It is therefore vital for the EU to up its game and reduce its vulnerability in this area.”
Equipment including energy storage and electric vehicle batteries, wind turbines and solar panels all need critical raw materials such as lithium, nickel, cobalt, copper and rare earth elements. And most of these are currently concentrated in either one or a handful of non-EU countries such as China accounting for 97% of the EU’s magnesium used in hydrogen-generating electrolysers), Türkiye (99% of the EU’s boron used in solar panels) and Chile (79% of lithium).
Securing supply
The EU attempted to address this in 2024 with its Critical Raw Materials (CRM) Act, which aimed to ensure a long-term secure supply of 26 minerals it identified as critical for the energy transition.
This securing of supply is intended to be achieved via the routes of diversified imports, increased domestic production and recycling.
However, the ECA report states that the CRM Act sets only non-binding targets by 2030, and these apply only to a small number of raw materials, regarded as ‘strategic’ due to their high economic importance and supply risks.
Without critical raw materials, there will be no energy transition, no competitiveness, and no strategic autonomy.
It adds that “it is also unclear how the levels to be reached by 2030 were determined. In addition, there is still a long way to go to meet the targets, the auditors say, and the EU will struggle to secure the supply of the strategic raw materials it needs by the end of the decade.”
The auditors note that efforts to diversify imports have “yet to produce tangible results”.
They highlight that in the past five years the EU has signed 14 strategic partnerships on raw materials, seven of them in countries with low governance scores. Imports from these partner countries fell between 2020 and 2024 for around half of the raw materials examined.
The report also notes that “some other EU actions are at a standstill, such as the negotiations with the US which were paused in 2024, while others are yet to materialise, such as the EU-Mercosur agreement with CRM-rich Argentina, Brazil, Paraguay and Uruguay, which has still not been ratified by each EU country”.
Focus on EU circularity projects
Exploring the applicability of circularity in power electronics
How circularity projects could change European industries
Developing circular solutions for wind turbines
The CRM Act envisages that at least 25% of the EU’s strategic raw materials should come from recycled sources by 2030, but the ECA states that “the outlook is not promising: as things stand, seven out of 26 materials needed for the energy transition have recycling rates between 1% and 5%, while 10 are not recycled at all”.
It adds that most EU recycling targets are not specific to individual raw materials and as a result, “they fail to incentivise the recycling of individual materials – especially those that are harder to extract, such as rare earth elements in electric drives or palladium in electronics”.
The auditors also highlight European recyclers suffer from high processing costs, the small quantities available, and technological and regulatory barriers which hinder their competitiveness.
Underdeveloped activities
The EU also aims to boost domestic extraction of strategic materials to cover 10% of its consumption, but the ECA says that “the reality is that exploration activities are underdeveloped. And even when new deposits are found, it can take up to 20 years for an EU mining project to become operational.”
This, they add, makes any concrete contribution by the 2030 deadline “hard to imagine. Processing capacities – for which the EU aims to reach 40 % of its consumption by 2030 – are shutting down, partly due to high energy costs which can seriously hamper competitiveness.”
The report concludes that the EU may be trapped in a vicious circle, “where a lack of supply hinders the development of processing projects, which in turn reduces the impetus to secure supply”.
To break out of this ‘vicious circle, the ECA recommends five action points:
- Strengthen the foundations of the its raw materials policy;
- Ensure that efforts to diversify imports lead to more secure supply of critical raw materials;
- Address the financing bottlenecks which hamper the progress of critical raw materials production in the EU;
- Make better use of the sustainable resource management to reduce dependence on primary critical raw materials;
- and increase the added value of EU strategic projects.
In December, the EC announced the adoption of the RESourceEU Action Plan in an effort to secure the EU's supply of critical raw materials.
The plan builds on the Critical Raw Materials Act and will introduce measures to protect industry from price and geopolitical shocks, expedite critical raw materials projects and create partnerships to diversify supply chains.
