Europe’s drive for strategic autonomy in raw materials and electrification metals is entering a decisive phase. The continent’s ability to compete in processing—rather than just extraction or downstream manufacturing—will be tested by volatile electricity markets, reconfigured logistics routes, geopolitical fragmentation and intense global competition for midstream value creation. ReSourceEU has articulated Europe’s ambition, but the coming two decades will determine whether that ambition translates into a competitive industrial reality or leaves Europe structurally dependent on external processors, particularly in Asia.
At the centre of this outlook lies a fundamental question: can Europe align electricity economics, logistics corridors, engineering capacity and diversified raw-material sourcing into a coherent competitive advantage? If the answer is no, processing costs will remain structurally high and investment will gravitate elsewhere. If the answer is yes, Europe can anchor resilient processing clusters across Scandinavia, Central Europe, Iberia and the Balkans—integrated into a continental architecture capable of competing with China, the United States and fast-scaling producers in Southeast Asia.
Electricity Economics: The Decisive Cost Variable
Electricity will be the single most influential factor shaping Europe’s processing competitiveness. Metals critical to electrification—lithium, nickel, manganese, copper, rare earths, graphite and silicon—are all highly energy-intensive. Europe’s electricity prices remain higher and more volatile than those of most competing regions due to constrained baseload capacity, uneven renewable integration, grid bottlenecks and carbon pricing.
For processing investors, electricity exposure is often the difference between bankability and structural loss. Lithium hydroxide refining can consume up to 9 MWh per tonne, nickel sulphate production requires sustained thermal and electrical input, copper electrorefining depends on uninterrupted power, and silicon smelting operates at extreme temperatures. Rare-earth separation and battery recycling further add to the energy burden through solvent regeneration, calcination and drying stages.
Three electricity scenarios dominate. In a baseline scenario, prices remain elevated but manageable, forcing processing plants to rely on power purchase agreements, heat recovery and digital optimisation. In an optimistic scenario, grid modernisation, renewables and selective nuclear extensions stabilise prices, enabling broader geographic distribution of processing capacity. In a stress scenario, geopolitical shocks or delayed energy investments drive volatility even higher, making advanced energy management and flexible load design essential for survival.
Across all scenarios, one conclusion is constant: engineering-led energy optimisation becomes non-negotiable. Processing plants must be designed for low energy intensity, dynamic load control and continuous optimisation. As renewable penetration rises, electricity markets are likely to become more volatile, not less. Plants unable to operate flexibly under fluctuating power conditions will lose competitiveness, reinforcing the importance of advanced process control, digital twins and energy modelling.
Logistics and the Rise of the SEE Corridor
Logistics is the second structural pillar of Europe’s processing outlook. Feedstock competitiveness depends on reliable inbound routes and efficient outbound access to manufacturing hubs. Europe’s logistics map will continue to shift due to port congestion, climate disruptions and geopolitical risks affecting traditional shipping lanes.
In this environment, Southeastern Europe (SEE) and the Adriatic corridor gain strategic importance. Ports such as Trieste, Koper, Rijeka and Bar offer shorter transit times from Africa, Turkey, the Middle East and Central Asia, while avoiding bottlenecks in Northern Europe. Many critical materials—nickel intermediates, manganese ore, rare-earth concentrates, graphite and copper concentrates—naturally align with these routes.
The SEE corridor does more than move materials. It enables preprocessing, testing, blending and conditioning of feedstock before it reaches EU-based processing plants. This step is increasingly valuable as Europe diversifies sourcing away from single suppliers. Different origins bring different impurity profiles, moisture levels and mineralogical characteristics, all of which affect processing stability. Near-shore preprocessing reduces risk, lowers costs and improves feedstock consistency.
Outbound logistics reinforce this advantage. Central Europe’s battery, EV and manufacturing hubs require timely, reliable delivery of high-purity materials. Serbia’s position at the junction of Adriatic ports, Danube corridors and Central European rail networks offers a low-congestion, resilient pathway for both inbound raw materials and outbound processed products.
Engineering Adaptability as a Competitive Advantage
The third and often underestimated pillar of competitiveness is engineering adaptability. Few processing plants will operate on static flowsheets. Instead, plants must continuously adapt to feedstock variability, electricity-price signals, regulatory changes and downstream demand. This flexibility is engineering-intensive, relying on digital twins, modular equipment, advanced automation and continuous optimisation.
Europe’s internal engineering capacity is insufficient to meet this demand at scale. Near-shore engineering ecosystems, particularly in Serbia, provide a solution by offering scalable, cost-efficient expertise in process modelling, energy optimisation, pilot testing and digital integration. This capacity enables European plants to evolve rather than stagnate, improving uptime, efficiency and environmental performance.
Decarbonisation further amplifies the need for adaptability. Tighter CO₂ regulations will force plants to electrify thermal processes, integrate renewable energy, and deploy advanced emissions controls. These transitions are design challenges, not simple operational tweaks. Continuous engineering support becomes essential to remain compliant without eroding competitiveness.
Scenarios: What Changes, What Stays Constant
Scenario analysis highlights that while outcomes differ, structural dependencies remain consistent. In a baseline scenario, Scandinavia anchors electricity-intensive processing, Iberia develops lithium refining under solar-driven models, and Central Europe focuses on downstream manufacturing. The SEE corridor plays a crucial role in logistics and engineering support.
In an optimistic scenario, stabilised electricity markets allow processing clusters to expand across Western and Central Europe. Engineering demand surges, and near-shore capacity becomes indispensable. In a stress scenario marked by energy volatility and logistics disruption, only the most energy-efficient and adaptable plants survive—making engineering quality a determining factor.
Across all scenarios, Serbia’s role remains structural rather than conditional. Energy volatility increases the need for optimisation, logistics fragmentation increases the need for preprocessing and flexibility, and geopolitical uncertainty increases the value of engineering redundancy. Serbia provides all three.
The Strategic Conclusion
Europe’s processing competitiveness will not be defined by resource endowment or political intent alone, but by its ability to operate under variability. Electricity markets will fluctuate, logistics routes will reconfigure, feedstock sources will diversify and environmental standards will tighten. Plants designed for rigidity will fail; plants engineered for adaptation will succeed.
The SEE corridor—anchored by Serbia’s engineering ecosystem—emerges as a backbone of Europe’s industrial architecture. It combines diversified logistics access, proximity to manufacturing hubs and scalable engineering capacity in a way few EU regions can replicate. Serbia is not merely a near-shore option; it is an engineering stabiliser that underpins Europe’s processing resilience.
Serbia and the SEE corridor are no longer peripheral. They are indispensable to Europe’s processing ambitions, industrial sovereignty and long-term competitiveness in strategic metals.
