Europe’s drive to achieve strategic autonomy in critical raw materials is increasingly colliding with the reality of limited domestic mining and refining capacity. Despite the entry into force of the EU Critical Raw Materials Act (CRMA), the continent remains heavily dependent on imports of lithium, rare earths, cobalt, nickel, and manganese, particularly at the processing and refining stages, where global supply chains are highly concentrated.
Recent industry estimates underline the scale of the challenge. The European Union currently sources over 90 percent of rare earth refining, around 87 percent of lithium processing, and more than 80 percent of battery-grade nickel from outside the bloc. While the CRMA introduces binding benchmarks—10 percent domestic extraction, 40 percent processing, and 25 percent recycling by 2030—the existing project pipeline suggests that execution risk remains substantial.
Market participants identify several structural bottlenecks slowing progress. Lengthy permitting processes, fragmented financing instruments, and high environmental and regulatory compliance costs continue to delay project development across multiple member states. Although a growing number of Strategic Projects have been formally designated, only a limited share has advanced to financial close, raising doubts about near-term delivery.
The issue is compounded by the sheer scale of required investment. Integrated mine-to-refinery projects typically demand between €600 million and €1.5 billion in capital expenditure per asset. Without accelerated capital mobilisation, clearer long-term offtake agreements from European industrial players, and stronger alignment between policy objectives and market realities, the gap between legislative targets and physical capacity is likely to persist.
Unless these constraints are addressed decisively, Europe risks maintaining a high level of external dependency for materials essential to the energy transition, battery supply chains, and industrial competitiveness—undermining the very supply-chain security that the Critical Raw Materials Act was designed to secure.
