Sustainable Development of the Supply Chain of Critical Materials: Flaws and Obstacles

For many years the European Union has been striving to take a leading role in the process of ecological transition. To this end, in 2019 the European Commission produced the Green Deal, a set of initiatives for sustainable development aimed at making the European market more competitive and efficient. However, the road to achieve the ambitious objectives set in this proposal encounters many obstacles, which are progressively being addressed by the European Union, in order to make the Green Deal a tangible reality.

The first substantial difficulty, starting from the very beginning of the production process, concerns the functioning of the supply chain of critical materials for the digital transformation and energy transition. In fact, there are numerous obstacles that this first phase of the ecological transition process presents, beginning with the search for deposits of rare raw materials. The so-called Exploratory Phase can in fact take a long time and requires huge high-risk investments which, even when successful, take a long time before beginning to generate a profit. The Extraction Phase is certainly not simpler or less expensive, and even before the beginning of this stage many bureaucratic obstacles must be overcome in order to obtain the required authorizations.

Moreover, deposits of critical materials are very rare on European territory, and therefore the Union is forced to import these materials from abroad, often without the possibility of diversifying the roster of importing countries. This brings the European countries to rely on few nations (especially China and South Africa), and put themselves in a weak position of dependence compared to them. As a matter of fact, in addition to a considerable list of other consequences, bureaucratic and fiscal, that trade with third countries entails, such a strong supply dependence generates a real weakness in the scenario of international relations (a painful lesson of this principle was imparted by the war in Ukraine, when the European Union had to manage the breakdown of relations with the largest natural gas exporter in the world).

To solve these problems, as well as modernize and improve the efficiency of the supply chain for critical materials for the digital transformation and energy transmission, the European Commission has developed a strategic plan called the “Critical Raw Materials Act”.

Bibliography:

Green Deal

https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal _it

Green Supply Chain

https://www.esg360.it/digital-for-esg/materie-prime-critiche-e-esg-non-ce-transizione-sosteni bile-senza-una-green-supply-chain/

Report by the European Commission

https://eur-lex.europa.eu/legal-content/IT/TXT/HTML/?uri=CELEX:52023DC0165&from=EN