4.2 Necessary measures and open issues

The high demand coupled with limited supply will increase prices. According to a study by the German Institute for Economic Research (DIW Berlin) 19, the prices for cobalt could well increase by up to 500 percent until 2030, for lithium up to 180 percent, for nickel around 160 percent, and for copper around 70 percent. As a buyer, Europe is in competition with other global economic powers.

Price trends in a net zero emissions scenario*

70 percent. As a buyer, Europe is in competition with other global economic powers.

217

2020 2030 2040

6 10 8 14 37 44

35 38

6 16 13

Kupfer Copper Nickel Kobalt Cobalt Lithium

* in thousand US dollars per tonne

Sources: DIW/Boer, International Energy Agency, Schwerhoff und Stuermer, US Geological Survey, IMF

4.2 Necessary measures and open issues

We need to identify the reasons why these strategic dependencies have developed in order to counter them: Alongside the globally increasing demand for raw materials and the geographical concentration of reserves, extraction and processing facilities, other factors include consolidation processes in the European mining sector, the lack of a global level playing field, the increase of state intervention and low investment in new exploration projects. Additional challenges in the mining industry include the long and high-risk timelines of projects, possible changes in demand and disruption caused by innovations, of the lock-in to deposits, high entry barriers and pricing monopolies. Finally, there is a lack of social awareness and acceptance for the domestic extraction of raw materials.

The three-pillar strategy for a sustainable supply of raw materials

In order to reduce its strategic dependencies, the EU and its member states need to pursue all three pillars of a sustainable supply of raw materials: first, strengthening domestic extraction of raw materials; second, securing fair access to raw materials from abroad; third, expanding recycling and the circular economy.

19 DIW (2022). DIW Weekly Report No. 4/2022. Data based on International Energy Agency sources, Schwerhoff and Stuermer (2020), US Geological Survey, IMF.