Europe’s push for strategic autonomy in critical raw materials is entering a decisive phase — but recent developments suggest that the bloc still faces a steep climb before turning political ambitions into industrial reality. For SMEs, which sit at the heart of industrial supply chains, the stakes are high.
Momentum has accelerated following the Critical Minerals Ministerial held in Washington on 4 February, hosted by US Secretary of State Marco Rubio and attended by more than fifty countries, alongside a joint Italy-Germany paper submitted to the European Commission calling for deeper cooperation with trusted partners and stronger industrial coordination. Yet a recent European Court of Auditors assessment warns that diversification efforts have so far delivered limited results: 10 of the EU’s 26 critical raw materials remain fully import-dependent, while recycling rates for several materials stand between 1% and 5%. With the Critical Raw Materials Act setting 2030 targets of 10% domestic extraction, 40% processing and 25% recycling, the findings underline the scale of the challenge for European industry — particularly SMEs facing higher costs and persistent uncertainty as supply chains are reshaped.
Three pillars underpin the EU’s strategy: diversifying import partners, boosting European extraction and scaling up recycling. However, auditors warn that imports from several partner countries have declined in recent years, while recycling rates for many materials remain negligible. Exploration activities across Europe are also lagging behind, with new mining projects unlikely to contribute to supply security in the near to medium term.
The Italy-Germany paper reportedly highlights that strengthening resilience will require substantial investments in storage, innovation and processing capabilities, alongside clearer mechanisms for cost-sharing to avoid undermining industrial competitiveness. For SMEs, this shift could be decisive. If new transatlantic frameworks succeed in stabilising supply and financing downstream innovation, smaller firms may gain more predictable access to inputs and new market opportunities. If not, rising volatility risks widening the gap between large industrial groups and smaller players already operating on tight margins.
Strategic autonomy in raw materials will depend less on isolation and more on coordinated partnerships. Yet unless Europe accelerates investment, streamlines permitting and builds a functioning recycling ecosystem, SMEs may continue to bear the brunt of a transition that is geopolitically necessary but economically complex.