The European Commission has issued new guidance urging EU Member States to redirect up to €1 billion in cohesion-policy funding toward domestic raw-materials value chains, marking a significant escalation in Europe’s strategy to secure critical minerals. The initiative reflects mounting pressure on the EU to reduce dependence on external suppliers for materials essential to electric vehicles, renewable energy systems, battery manufacturing and advanced technologies, amid intensifying competition with the United States and China.
At the core of the Commission’s message is a broader vision that extends well beyond mining alone. While mineral extraction remains important, Brussels is placing increasing emphasis on processing, refining, chemical conversion and recycling, where Europe’s vulnerabilities are most pronounced. Without strong mid-stream and downstream capabilities, domestic mining cannot deliver true strategic independence, leaving European industry exposed to global supply disruptions.
From Regional Development Funds to Strategic Industrial Policy
Cohesion-policy funds have traditionally supported infrastructure development, employment and regional growth. The Commission now argues that critical raw materials align directly with these goals. Mining and processing projects are highly capital-intensive and often located in structurally weaker regions, making them suitable candidates for cohesion funding. Eligible investments include feasibility studies, engineering and design work, infrastructure construction, environmental-impact mitigation and the development of local industrial ecosystems around new production hubs.
To guide implementation, the Commission has released technical documentation detailing how Member States should structure financial support while complying with state-aid rules, environmental regulations and long-term monitoring requirements. The guidance underscores that public funding must be tied to responsible operations and robust environmental safeguards, reflecting Europe’s determination to avoid repeating the environmental legacies of past industrial cycles.
Linking Financing, Regulation and Supply Security
This financing push is closely linked to the EU’s wider regulatory framework. The Critical Raw Materials Act sets binding targets for mining, processing and recycling, while initiatives such as REPowerEU and ReSourceEU provide complementary investment pathways. By connecting these policy objectives with concrete financial instruments, the Commission aims to mobilise public and private capital at a scale matching Europe’s growing demand for materials such as lithium, nickel, copper and other strategic metals.
Still, funding alone will not eliminate the structural challenges facing Europe’s raw-materials ambitions. Lengthy permitting processes, community opposition, complex geology and limited domestic expertise continue to delay projects. High environmental-compliance costs and long development timelines make investors cautious, reinforcing the need for predictable policies and long-term financial backing.
By steering cohesion funds toward the sector, Brussels hopes to reduce investment risk and demonstrate sustained political commitment. Governments can use public financing to co-fund essential infrastructure such as transport links, power connections and water-management systems, lowering upfront costs and improving project economics. These measures are designed to unlock private investment while encouraging Member States to integrate mining and processing into broader regional development strategies.
The Commission’s guidance also highlights stockpiling and supply-security mechanisms as a growing priority. As global supply chains tighten and geopolitical uncertainty rises, strategic reserves of critical minerals are gaining importance. Cohesion funding may support storage facilities, logistics networks and digital tracking systems that ensure reliable material availability for European manufacturers.
Ultimately, the success of Europe’s raw-materials strategy will depend on close coordination between national governments, regional authorities, industry players and financial institutions. The proposed €1 billion mobilisation is less about the headline figure and more about signalling that raw materials are now central to European industrial policy. If effectively deployed, it could accelerate the creation of a resilient, integrated mineral ecosystem capable of supporting Europe’s clean-energy transition and long-term economic competitiveness.
