Critical raw materials explained

What are critical raw materials and what are they used for?

Metals, minerals and natural materials are the building blocks of many products that are part of our daily lives. Those raw materials that are most important economically and have a high supply risk are called critical raw materials.

Critical raw materials (CRMs) are essential to the functioning and integrity of a wide range of key industries across the EU. These industries include renewable energy, automotive manufacturing, digital technologies and defence. CRMs can also be found in many everyday appliances such as smartphones, electric cars, wind turbines, plant fertilisers or aircraft.

Vibrating technology in phones = tungsten

Electric vehicles = lithium, cobalt and nickel

Wind turbines = boron

Out of the 34 critical raw materials identified, a specific list of strategic raw materials (SRMs*) (see the 17 strategic raw materials in dark yellow below) has been created for the materials whose demand is expected to outpace supply in the coming years, owing to their economic importance (stimulating demand) and complex production requirements (constraining supply).

This list will be reviewed regularly.

*SRMs in HREEs and LREEs: Nd, Pr, Tb, Dy, Gd, Sm, and Ce

The economic importance of critical raw materials

Critical raw materials are essential to Europe's economy and to the technologies driving the green and digital transitions. They are key components in batteries, electric vehicles, wind turbines, semiconductors, AI technologies and defence systems.

As demand within these sectors grows, in Europe and across the world, secure access to these materials is becoming increasingly important for the EU's industrial competitiveness, innovation and economic security.

Material demand in the European Union (high demand scenario)

The data represents a forecast of CRM demand for five strategic EU sectors: renewables, electric mobility (e-mobility), industry, information & communications technology (ICT) and aerospace and defence.

The global supply and demand

Critical raw materials are mostly sourced from outside the EU owing to their uneven distribution across the world, differences in social acceptance (linked to local territorial impacts) and the competing land uses between economic activities.

At present, the EU is highly dependent on a limited number of countries for several CRMs. In some cases, the EU relies almost entirely on a single supplier. This is particularly the case for certain rare earth elements and other strategic materials such as lithium, which are imported from a very small number of producing countries.

Major EU suppliers of CRMs

This concentration of global supply chains for CRMs in a small number of countries exposes the EU to supply disruptions linked to geopolitical tensions, trade restrictions or rising and competing global demand. Because these materials are essential for strategic sectors, disruptions can affect European industry, competitiveness and economic stability.

Furthermore, since 2024, third-country export restrictions on rare earth elements and other critical materials have increased to need to accelerate the EU's diversification strategy.

For instance, since 2023, China has adopted a series of export control measures, covering CRMs such as graphite, gallium, tungsten, bismuth, germanium and rare earths. These measures also apply to certain battery products and equipment used to process rare earths elements.

China is further developing its export control regime, including for certain CRMs and related products. This increases uncertainty for EU industrial operators and has implications for the EU's economic security and its efforts to reduce strategic dependencies.

In parallel, other global players have stepped up their action to secure access to CRMs for their industries by financing CRM projects and diversifying their supplies through partnerships.

The EU critical raw materials act

The European critical raw materials act entered into force on 23 May 2024. Its main objective is to reduce the EU's dependency on third-country suppliers for strategic raw materials.

The act sets four non‑binding benchmarks for 2030:

• at least 10% of annual EU consumption to be mined within the EU
• at least 40% to be processed domestically
• at least 25% to come from recycling within the EU
• and no single third country to account for more than 65% of EU supply.

The act also promotes technological progress and resource efficiency to help moderate the expected increase in EU demand for critical and strategic raw materials.

• Strategic autonomy: Council gives its final approval on the critical raw materials act (press release, 18 March 2024)