Europe is trying to reduce its dependence on foreign suppliers of critical minerals, but funding shortages, fragmented decision making and slow project development are threatening the European Union’s efforts to build more secure supply chains.
The EU has set 2030 benchmarks under its Critical Raw Materials Act to extract at least 10% of its annual consumption of strategic raw materials within the bloc, process 40% and recycle 25%. It also aims to ensure that no more than 65% of its annual consumption of any strategic raw material comes from a single third country.
To help achieve those goals, the European Commission selected 47 strategic projects inside the EU in March 2025 and another 13 projects outside the bloc in June. The projects were intended to strengthen European supply chains for minerals considered important to the green transition, digital technologies and defence.
But progress has been slow.
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In August, 23 of the 60 selected project developers issued an urgent warning that their projects faced serious financing, market access and permitting difficulties. The developers said delays were putting projects at risk at a time when Europe is seeking to reduce its dependence on China.
One project has already collapsed. France’s Viridian Lithium, which was selected as an EU strategic project, went bankrupt in March after failing to secure the financing needed to continue developing its lithium processing plans.
The European Commission says it has mobilised €1.7 billion ($1.97 billion) in financing for strategic raw materials projects since December. But project developers argue that access to financing remains one of the biggest obstacles to turning the EU’s strategy into operating mines, processing facilities and recycling capacity.
The contrast with the United States is increasingly visible. The Trump administration says it has approved nearly $40 billion in mineral related developments as Washington seeks to expand domestic production and secure alternative sources of critical materials.
For the EU, the challenge is not simply setting targets. It is creating a financial and regulatory system capable of turning those targets into functioning supply chains.
Fragmented financing
The financing problem has become particularly visible among projects that were supposed to benefit from the EU’s strategic designation.
The selection was intended to give important projects greater political support, easier access to financing and faster permitting. Yet several developers say that designation has not translated into the funding required to move projects forward.
An analysis by the Overseas Development Institute published in June found that there was no evidence of financial commitment for 40% of the selected projects. It also noted that the EU portfolio was heavily concentrated in a small number of materials, particularly lithium, graphite, nickel and cobalt.
The European Court of Auditors has identified a broader institutional problem.
In its 2026 assessment of the EU’s critical raw materials strategy, the auditors found that EU funding for critical raw materials was fragmented across different programmes and institutions. The report called for stronger coordination, better monitoring and more effective use of available financial instruments.
That fragmentation matters because mineral projects require substantial capital long before they generate revenue. Mining, refining and processing facilities can take years to develop, while investors must commit money before there is certainty about permitting, demand and long term prices.
The EU’s strategic project designation was intended partly to overcome these obstacles. But the problems facing several projects suggest that regulatory recognition alone cannot guarantee financial viability.
Targets do not necessarily match supply needs
The EU’s Critical Raw Materials Act provides a clear framework, but the targets themselves have limitations.
The bloc’s 10% extraction, 40% processing and 25% recycling benchmarks are designed to increase domestic capacity and reduce supply risks. However, the targets apply across the strategic raw materials portfolio rather than providing identical requirements for every individual mineral.
This creates a potential mismatch between aggregate targets and specific vulnerabilities.
Some minerals may already have relatively strong European production or processing capacity, while others remain heavily dependent on imports. As a result, the distribution of investment across individual minerals becomes as important as the overall percentage targets.
The ODI analysis found that copper accounted for a significant share of the EU’s strategic project portfolio despite European production and refining capacity already being comparatively strong. At the same time, the number of rare earth projects remains limited despite Europe’s heavy dependence on China for many rare earth elements.
The European Court of Auditors has similarly warned that the bloc’s strategy needs a stronger connection between its objectives, the materials most exposed to supply risks and the projects receiving support.
Exploration remains a major gap
Another weakness is that Europe’s strategy has focused heavily on developing identified projects while spending relatively little on discovering future mineral resources.
The European Investment Bank has highlighted Europe’s limited investment in mineral exploration compared with competing regions. Increasing exploration would be necessary to establish a larger pipeline of economically viable deposits that could eventually support new mines and processing facilities.
Without new discoveries, Europe’s ability to expand domestic production will remain constrained even if existing projects receive faster pe
With information from Reuters.
