WORLD ENERGY TRANSITIONS OUTLOOK
7.6 CASE STUDY: THE EUROPEAN UNION
The European Union is in the midst of a green transformation; the energy transition is a key objective of its recovery agenda and its Green Deal. In 2021, it committed to reduce its greenhouse gas reduction objectives by 55% by 2030 with respect to 1990 and to achieve net zero emissions by 2050. It also aims to increase the share of renewable energy generation to 40% by 2030, a much larger share than previously proposed (Chestney, 2021). These ambitious objectives will imply a massive increase in the deployment of renewable energy and EV technologies, increasing demand for critical materials. The European Union will need critical materials for electric transportation, the production of green hydrogen and renewable-based electricity generation. To meet its growing demand, it will need to increase its imports of such materials. As concerns over the supply of critical materials mount, the European Union is looking to secure its supply. European companies are securing contractual supply agreements that help ensure an undisrupted supply of critical materials. Such contracts reduce pressure in the short term, but they do not provide a solution to long-term structural issues. For this reason, European leaders are seeking to produce critical materials domestically. The European Union has sizable reserves of several critical materials, such as copper and nickel. Important reserves include copper in Central Europe, lithium reserves in Saxony (Germany), and nickel in Finland (NS Energy, 2021). These resources have not been mined in recent years because of strong local and environmental opposition. Another reason why mining has been limited is that current prices are not sufficiently high for these mines to be economically viable. Solutions need to be found to increase national production and ensure the supply of critical materials. They may arise from international partnerships, which can help reopen mines in a sustainable way, as well as from increases in prices, which would warrant reconsideration of these projects.
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