The COVID pandemic has brought home the reality of the need for Europe to strengthen its industrial and technological base, write Raül Blanco and Maria Trallero.
Raül Blanco is the Secretary General for Industry and SMEs in the government of Spain; María Trallero is EU Affairs Coordinator at Goethe University, Frankfurt.
The pandemic has brought about multiple changes, one being a strong European call for strengthening our industrial and technological base. Even if it had gradually evolved over time, as EU Commissioner Thierry Breton put it: “with the pandemic, Europe lost its naivety”.
The major shortages of critical supplies during the pandemic coupled with the current semiconductors’ crisis have brought home that reinforcing the EU’s open strategic autonomy will be essential for a sustainable socio-economic growth. This strategy is to be supported by an assertive trade policy that fosters Europe´s investment attractiveness, builds stronger and reliable international partnerships and secures a level playing field.
An informal Competitiveness Council on 1 February focused on tackling vulnerabilities and securing the supply of raw materials to EU industry. Earlier in January, the French Presidency organized an excellent conference in Paris on strategic autonomy. The Spanish Ministry for Industry participated actively in both events, advocating for increased industrial and mining capacities. The joint cooperation on coal and steel was the bedrock of the European project, and we are moving now to the raw materials of the present and the future: lithium, nickel, cobalt and magnesium, amongst others.
These raw materials are key levers for the digital and green transitions. Current production of nickel, lithium, cobalt and rare earths is mainly concentrated in a handful of countries, where China controls from 30% to 80% of their global production. Under this scenario, we may merely shift current dependencies of oil and gas from US, Russia and Saudi Arabia to other countries’ critical supplies in order to produce batteries and magnets for wind turbines.
The EU should tackle these dependencies by diversifying its reliable suppliers, reusing and recycling raw materials and increasing European production through mining and refining. We need all three approaches to overcome current dependencies and there is no time to waste. It is a question of economic and strategic security for the EU and of national security for Member States.
Leveraging these three approaches will entail addressing important challenges. Let´s take mining, as an example. The mining of critical raw materials is afflicted by high technical complexity and costs, an under-developed circularity of the sector, and low levels of public acceptance mostly due to negative past experiences.
However, challenges can be turned into opportunities. We can back the green and digital transformation of the mining sector, which is already enabled by cutting-edge innovation and technological progress; duly implement the EU legislative framework already in place to safeguard environmental and social conditions; and foster long-term investments through the right incentives. Furthermore, we shall rather communicate more and better with our citizens in order to explain the vast potential of mining in the context of Europe’s just transition to climate neutrality instead of creating unnecessary red tape and lengthy national licensing procedures.
Strengthening our production of these critical raw materials, by leveraging competitive capacity and complying with high environmental and labour standards, will prevent us from actually moving towards a false Green Deal.
The European Commission has set out an EU Action Plan on Critical Raw Materials and has laid the foundation for a future European Raw Materials Alliance. In this context, it is asking Member States to identify mining and processing projects within their territories that can be operational by 2025. Spain has targeted a potential mining and industrial cluster of lithium, nickel and cobalt in Extremadura; likewise, we have identified deposits of magnesium and tungsten in other regions, and we support the co-creation of common projects with Portugal with a view to placing the Iberian Peninsula as a key European platform for raw materials. Projects that should promote reindustrialization and the creation of local jobs connected through European value chains.
Spain will continue working with the European Commission, the French Presidency and all Member States to secure increased access to strategic raw materials and to mitigate overreliance. Future work streams should encompass the creation of an IPCEI for Raw Materials; greater flexibility to include mining and processing in the EU taxonomy; and setting higher norms and standards for quality and sustainability that guarantee environmental, social and economic aspects.
We have a compelling task ahead to secure a sustainable socio-economic future, which requires a concerted effort by governments, industry and civil society. Our young generations that firmly advocate for a green and socially just economic pathway will have to reflect on the advantages of making a better use of our own resources through a mining industry that embraces breakthrough innovation and complies with high environmental and social standards.
There is no time for being naïve but for a united strategic vision that helps us build back better in uncertain times. It is certainly not the time for merely moving from old dependencies to new ones. As Breton has said: “It is time to have a discussion, without naivety, and without taboos, on the toolbox we need to guarantee our security of supply for our most critical value chains in case of crisis.”