Europe has set bold industrial ambitions for the coming decade: leading the electric mobility revolution, deploying massive renewable-energy capacity, building a resilient power grid, advancing hydrogen technologies, and reshoring key manufacturing sectors. Yet these ambitions face a formidable obstacle: Europe’s institutions move far slower than its industrial needs demand.
Critical raw materials (CRMs) starkly expose this tension. Europe knows what is required—domestic mining, processing, strategic partnerships, stockpiles, and recycling—but cannot mobilize these solutions fast enough. Institutional drag has become the primary bottleneck in Europe’s industrial transformation.
The Forms of Institutional Drag
This drag appears in three key areas:
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Regulatory inertia: Europe’s permitting systems were designed for a slower-growth era when mining was peripheral and environmental protection dominated policy. Today, mining is central to the green transition, yet projects can take a decade or more to secure approval. Renewable-energy targets assume a pace of mineral supply that current regulations cannot support.
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Public resistance: While citizens broadly support climate action, they often oppose the infrastructure needed to achieve it. Mining sites, processing plants, waste facilities, and high-voltage transmission lines face local opposition regardless of strategic importance. Policymakers, wary of backlash, and cautious regulators contribute to prolonged delays.
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Financial conservatism: Early-stage mining and processing projects require significant capital and risk-sharing. Yet European financial institutions favor low-risk, mature technologies, even when strategic imperatives demand bolder investments.
These constraints create a widening gap between industrial ambitions and operational reality. Europe risks building factories without securing the raw materials to power them, setting targets it cannot achieve, and relying on external powers for essential minerals.
Reducing Drag: Five Strategic Decisions
Europe can close this gap—but it requires decisive, often uncomfortable choices:
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Prioritize strategic projects: Critical mineral sites must receive expedited permitting. Streamlining administrative processes does not mean lowering environmental standards but removing redundant hurdles to enable timely project execution.
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Engage the public transparently: Citizens need to understand that the green transition requires domestic mining. Extracting minerals in Europe under the strictest environmental standards is far preferable to depending on foreign sources with weaker safeguards. Clear communication is essential.
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Mobilize financial ambition: Public investment must de-risk mining and processing projects. Strategic autonomy demands strategic spending. Public funds can leverage private capital, but state leadership is essential.
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Coordinate industry and supply chains: Europe must align automakers, battery manufacturers, grid operators, and policymakers. Fragmented planning wastes resources and delays outcomes. Integrated supply-chain strategies are critical.
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Strengthen geopolitical mineral diplomacy: Partnerships with resource-rich regions must go beyond raw-material extraction. Co-processing, joint investment, skill development, and governance support should form part of a long-term strategic approach.
The next decade will hinge on how Europe navigates the race between industrial acceleration and institutional drag. Reforming regulatory, financial, and industrial systems can preserve Europe’s status as a global industrial leader. Failure to act risks making its targets aspirational, with industries gradually relocating to regions with more agile infrastructure.
Critical raw materials are more than commodities—they set the pace of Europe’s industrial future. And at present, Europe’s institutions are moving too slowly to keep up.
