From Batteries to Battleships: Navigating the Critical Raw Materials Challenge

Critical raw materials are becoming increasingly prominent on the global stage. Their role in transformative policies such as the U.S. Inflation Reduction Act (IRA) and the European Union's Critical Raw Materials Act (CRMA) underscores their significance. Critical raw materials are defined as resources with high economic importance but subject to important supply risks. The classification of these materials depends on specific regions and their economic landscapes, which evolve over time. The European Union, for example, revises its list every three years. Since its inception in 2011 with 14 materials, the list has grown to 34 in 2023, including a subset known as strategic raw materials. The accompanying figure illustrates these 34 materials: blue for regular critical raw materials and green for strategic ones.

Critical raw materials and defense

In the European Union’s criticality assessment, economic importance spans across sectors like clean technologies (e.g., electric vehicle batteries, windmills, and solar panels), digitalization, medical devices, and defense systems. Last week, NATO underscored the defense dimension by introducing a list of 12 critical raw materials crucial for modern weaponry and strategic systems (highlighted with a red border in Figure 1). These include aluminum, cobalt, graphite, platinum, titanium, and others critical to producing advanced military equipment. Aluminum and graphite stand out as particularly vital. They are used in both vehicles (aircraft, tanks, battleships, and submarines) and ammunition (missiles, artillery, and torpedoes). Aluminum is lightweight yet robust, thereby enhancing agility and performance, while graphite provides high strength and resistance to high temperatures. In submarines, graphite also contributes to the stealth of submarines because its structure absorbs sound waves. This absorption reduces both the reflection of sonar signals as well as the noises of the engine and machinery inside the submarine. Cobalt’s contribution to superalloys ensures jet engines, missiles, and submarines can endure extreme conditions.

 

The case of cobalt

Cobalt is a good example of the problem the European Union is now facing.  The current cobalt situation is already critical, as the world heavily relies on one major supplier – the Democratic Republic of Congo – which accounts for over 70% of the global cobalt production. This dependency poses significant geopolitical risks, especially as demand continues to grow.

The pressure on cobalt supply will only intensify due to two converging trends: the rapid rise in electric vehicle production and the increasing demand from the defense sector. For the European Union, this raises a pressing question: how can access to this critical material be secured sustainably? Recycling solutions, among others, are on the table and are explored further in the policy paper written by Ortelius, where we outline how far the different solutions can bring us.

 

The Ortelius policy paper

As geopolitical tensions rise and global transitions toward clean and digital technologies accelerate, the demand for critical raw materials is set to surge. As they lie at the intersection of innovation and security, ensuring their availability in the European Union is critical to maintaining economic resilience and technological leadership. Recognizing this urgency, Ortelius has authored a policy paper on critical raw materials for electric car batteries in the European Union. Based on ten key messages, it presents some new or underexposed insights aimed at fostering decisive and forward-looking policy measures to secure strategic resources for a sustainable future. This paper will be released very soon, so stay tuned! If you want to be among the first to be notified when the paper is released, you can subscribe here.