Securing a sustainable supply of rare earths for a carbon-neutral future of Europe
Berlin, 30 September 2021: The European Raw Materials Alliance (ERMA) today released its Action Plan to secure access to Rare Earth Elements for European industry. Entitled Rare Earth Magnets and Motors: A European Call for Action, the report outlines current and projected European demand for Rare Earth Elements and steps which should be taken to secure their supply.
The demand for high energy density rare earth permanent magnets is growing exponentially. They are vital for applications like wind power, electric mobility, and communications technology, making their supply crucial to the European Union’s stated ambition to transition to a green, digital economy. While the EU is a world leader in the manufacturing of electric motors, it is almost fully import dependent regarding rare earth permanent magnets, more than 90% of which are produced in China.
The European Raw Materials Alliance (ERMA) is addressing the main challenges connected to raw materials supply for Europe in thematic clusters. The first of these topical clusters is the ERMA Cluster on Rare Earth Magnets and Motors. With the input of more than 180 industry stakeholders, ERMA has developed the Action Plan to highlight the challenges related to the highly vulnerable global rare earth supply chain and to provide specific actions that the EU, its Member States, industry, and innovation communities should implement with the aim of triggering a disruptive change to diversify EU supply chains. The Action Plan contains 12 actions that are summarised in four key recommendations:
- European policymakers will need to create a level playing field, since the cost of EU production is intrinsically higher than the Chinese production cost, which is massively lowered by a set of direct and indirect state subsidies.
- European OEMs (original equipment providers, in this case the producers of components making use of rare earths) will need to consider potential commitments to buying a significant percentage share of rare earth materials from European producers.
- The EU will need to ensure that end-of-life products and waste materials containing rare earths stay in Europe, facilitating their reprocessing and recycling.
- There is a unique opportunity to trigger large private investments in the emerging European rare earths value chain by match funding. For this reason, the EU and its Member States should pull all financial levers including state aid, such as a dedicated Important Project of Common European Interest (IPCEI).
The European Raw Materials Alliance is currently working on a second Action Plan covering materials for energy storage and conversion, such as batteries, fuel cells, solar and hydrogen and other alternative energy storage and conversion systems.