Critical insecurities? The European Union's strategy for a stable supply of minerals

Abstract

The green transition is creating exponential needs for critical minerals. As demand currently exceeds supply for many of these minerals, governments worldwide are devising strategies to secure stable procurements of the minerals they lack as well as to ensure that they reap the benefits of their own natural wealth. The European Union (EU) is in a difficult position in this regard due to limited domestic reserves and, thus, serves as an ideal case study to explore developments in international economic law on this issue. Internally, the EU has been reforming its financing mechanisms, developing risk management tools, and enhancing recycling. Externally, the EU has been using international trade tools to focus on access to supply rather than traditional market access issues while also developing new investment rules to open doors and protect its foreign investors in extractive industries. Both internal and external actions are being coordinated with allies through new cooperative mechanisms. However, challenges abound. These strategies will face resistance from resource-abundant economies in view of their growing demand for policy space to protect their own mineral sector. Such strategies are also inherently competitive and, hence, might lead to growing tensions among resource-seeking economies themselves.