Critical raw materials are a central factor in the energy transition and the decarbonization of the economy, as they are indispensable for the expansion of renewable energies, electrification, and circular economy. The demand for these raw materials is rising sharply with the transition to sustainable technologies such as wind turbines, solar panels, and electric vehicles.
Relevance of Critical Raw Materials for the Energy Transition
- Critical raw materials such as lithium, copper, or rare earths are essential for batteries, electric motors, and other key technologies of the green transformation.
- However, the extraction of these materials is often associated with significant ecological, social, and economic challenges. For example, the lithium extraction in Portugal (Covas do Barroso) highlights the tension between necessary resource extraction and environmental protection as well as social acceptance.
- Sustainability thus requires not only responsible extraction under strict environmental standards but also increased recycling and the development of alternatives to reduce the demand for critical raw materials.
Strategic Importance for Investors
- For investors in the field of sustainable investments, the security of supply with critical raw materials is a central issue. The EU is pursuing a dual strategy: on the one hand, expanding its own capacities in Europe along the entire value chain (extraction, processing, recycling), and on the other hand, establishing strategic partnerships with raw material-rich countries like Chile.
- Financial incentives are intended to promote new projects; almost half of the 47 strategic EU projects focus on lithium extraction – an indication of its high importance for energy storage technologies.
- At the same time, Spain is also gaining significance as a potential supplier due to its geological diversity. There, a holistic approach is being pursued (“360° approach”), which includes demand assessment, recycling, and traceability – important factors to ensure sustainable supply chains within Europe.
Global Challenges
- China plays a dominant role in rare earths; its export controls can threaten global supply chains. This increases the pressure on Europe and other regions to diversify their sources and build their own capacities.
In summary, critical raw materials are indispensable for the decarbonization of the economy and are therefore of high relevance for sustainable investments. Ensuring a sustainable supply requires both technological innovations and political strategies to promote domestic resource development as well as international cooperation – all of which are crucial factors in the context of a successful energy transition.