Europe and North America are facing a critical shortfall in the raw materials essential for clean energy, semiconductors, and defense. The challenge extends beyond mining – it’s about having a competitive edge in refining, advanced manufacturing, industrial know-how, and the ability to scale key technologies.
GLOBSEC GeoTech Center’s new report, The innovation imperative: Bridging the supply-demand gap for critical raw materials by 2030, presents a comprehensive, innovation driven strategy – grounded in rigorous data and forward-looking policy – to help bridge this gap. Europe and North America must act decisively to leapfrog technologically, invest strategically, and forge global partnerships that address these vulnerabilities.
“By 2030,Europe and North America are likely to experience significant gaps between demand and local supply in many critical raw materials (CRMs) required in strategic industries, as strategic industries like semiconductors and defense grow rapidly, while the energy transition advances. Growth in demand for these materials is expected to far outpace growth in local supply resulting in European local supply of less than 20 percent of demand in nickel, lithium, copper, natural graphite, and rare earth elements and North American local supply of less than 50 percent of demand in copper, lithium, and synthetic graphite.”
Key topics include:
- Surging Demand Across Regions: Europe and North America will see sharp increases in CRM demand due to the energy transition, electrification, increased defense spending, and efforts to localize semiconductor and manufacturing capacity.
- Severe Supply Gaps by 2030: Europe is expected to cover less than 20% of local demand for nickel, lithium, copper, rare earths, and natural graphite; North America will fare better, but still fall short for key materials like copper, lithium, and synthetic graphite.
- Strategic Risk: Limited extraction capacity and a weak project pipeline present high supply risks, especially for Europe under current trajectories.
- Vulnerability to Export Controls: Heavy reliance on a few countries makes global supply chains vulnerable to disruptions from export bans—such as those enacted by Indonesia (nickel), Zimbabwe (lithium), and China (gallium, tungsten, etc.).
- China’s Dominance in Refining: China controls over 70% of global processing capacity for four of the six key CRMs, making Europe and North America heavily dependent on a single supplier.
- Supply-side approaches include:
- New and expanded sites – expanding existing mining and processing sites and accelerating projects currently in the pipeline through simplifying permitting and ensuring sufficient financing.
- Primary supply innovation — improving mining material yield through AI-enabled process optimization, innovative chemical processes like direct lithium extraction, and recovery of metals from mining tailings (i.e., residual resources from the processing of mined ore).
- Demand side approaches:
- Technology mix shift — adopting alternative technologies, for example, using battery chemistries, such as sodium-ion batteries, that would require less CRMs than lithium-ion batteries with some types of sodium-ion technologies being uniquely suitable for large-scale battery storage applications due to high power densities and cycle life
- Material substitution — leveraging alternative materials for common use cases, such as deploying alternative motor technologies that have lower demand for rare earth elements.
Five years ago, many of these solutions would’ve been dismissed as unviable. Now, they’re not only possible — they may be essential.