Industry alliance warns raw materials could become Europe’s “Achilles heel”

Germany’s government should cooperate more closely with industry to increase raw material supply independence by promoting domestic extraction, prioritising circular economy approaches such as recycling, and creating new partnerships, a joint alliance of industrial players said in a position paper.

“The increasing demand for raw materials from a sustainable industry, coupled with growing dependence on raw materials, threatens to become Europe's Achilles heel,” the 19 alliance members of trade unions and industry associations said, which includes the metalworkers' union IG Metall, and industry lobby groups BDI and DIHK.

“The situation is serious: we are currently losing tens of thousands of good jobs in industry. This must stop. Businesses and politicians have a duty to act,” said IG Metall head Jürgen Kerner following the first summit meeting of the “Alliance for the Future of Industry”.

In their joint position paper, the alliance called for the government to support the diversification of raw material sources by expanding and promoting advisory services, as well as introducing long-term investment schemes for the use of raw materials extracted, refined or recycled in Europe. The government should also expand partnerships with countries rich in raw materials outside Europe as part of its foreign and development policy, the alliance said.

“Strategic raw materials policy must be geared towards strong demand for future technologies, promote the ramp-up of a circular economy, and provide alternatives to high dependence on imports for almost all critical raw materials, the low diversification of supply sources, and the inadequate recycling structure and low recovery rates.”

Germany's economy ministry and the European wind industry recently launched a new "resilience roadmap" aimed at reducing the bloc's dependence on Chinese permanent magnets used in wind turbines. “Raw materials policy is now a question of national resilience,” said economy minister Katherina Reiche, who met with the alliance. Germany imports 39 of the 46 most relevant raw materials needed to achieve strategic targets in energy and industrial policy, according to a 2022 report. 

The EU is working on a "Clean Industrial Deal" and a “Critical Raw Material Act” to boost competitiveness and support decarbonisation efforts amid concerns it is losing the global clean tech race, as China maintains a dominant grip on both technology production and critical raw materials.