More active raw material policy could see German govt buy resources and manage stocks

A new resource strategy that includes stronger state involvement could be forthcoming in Germany after a report commissioned by the economy and climate ministry (BMWK) found that the vast majority of critical raw materials have to be imported and the country is even more dependent than previously thought, newspaper Der Tagesspiegel reported. According to the report, Germany imports 39 of the 46 most relevant raw materials needed to achieve strategic targets in energy and industrial policy, with China being the dominant supplier for 23 of these. More than 90 percent of rare earth minerals used by Gemany come from China, but relations have soured in recent months due to the war on Ukraine, China’s ambition to annex Taiwan, and broader concerns in western countries about Chinese economic dominance and infiltration of strategic sectors. Many of the imported resources are crucial for energy transition technologies and to build solar panels, wind turbines and batteries. “If the energy transition and the transformation to a climate neutral economy are to succeed, we have to secure access to critical raw materials long-term,” said Franziska Brantner, Green Party state secretary in the economy and climate ministry.

The report is supposed to lay the groundwork for a new resource strategy that aims to improve resource supply security. It could copy an approach already applied in Asian countries like Japan or South Korea whereby state agencies get involved in the exploration and purchasing of raw materials and supply bottlenecks or price hikes are cushioned by creating large resource stocks, Tagesspiegel reports. “An active resource policy benefits companies who then have cheaper access to raw materials,” Brantner argued. However, industry lobby group BDI said the “Japanese model” could not be simply imitated by Germany. The country’s large and important sector of small and medium sized enterprises would make it much more difficult to organise bulk buying and joint stock management. The BDI said improving recycling rates and circular economy concepts for critical raw materials still held a large potential for improving resource supply.