30 Jun The Dual Challenge of Critical Raw Materials: Advancing the Green Transition Without Compromising Industrial Competitiveness

Giulia Colleoni

School of Politics, Economics & Global Affairs, IE University, Madrid, Spain.

Dual Degree Master’s in Management and International Development.

E-mail: giulia.colleoni@student.ie.edu.

Abstract

This report examines the role of Critical Raw Materials (CRMs) within the context of SDG 12, the UN Sustainable Development Goal aimed at ensuring sustainable patterns of production and consumption. According to the emerging European narrative, CRMs are considered key resources for the ecological transition, as they are essential for the development of renewable technologies, electric mobility, and digitisation. However, their use presents a paradox: although they appear crucial for reducing global environmental impact, the extraction and processing of these materials generate significant environmental harm, conflicting with the sustainability goals of SDG 12. This paradox is further intensified by the phenomenon of outsourcing mining activities, which, although it reduces direct environmental impacts in Europe, shifts these impacts to countries with weaker environmental regulations. This also jeopardises the competitiveness of European industry, which faces protectionist policies from supplier countries, risks of supply disruptions, and potential price shocks. This raises the central question of the report: is it possible to reduce dependence on foreign CRM suppliers and enhance the competitive advantage of European industry without compromising the sustainability principles of SDG 12? T o address this question, the report explores potential solutions, including increasing domestic extraction of CRMs in Europe, while considering the negative environmental impacts of mining. Several policy measures are suggested, such as promoting a stronger circular economy, investing in technological innovation, and diversifying supply sources. These actions could help mitigate the paradox, improve the competitiveness of European industry, and make the supply process of critical raw materials more sustainable.

READ THE FULL ARTICLE HERE

Keywords: Critical Raw Materials (CRM), SDG 12. Green Transition, European Industry sector, Industry competitiveness,