Can European strategic autonomy be achieved without sufficiency? Modelling the implications of the Critical Raw Materials Act on the lithium value chain
Pauline Bucciarelli and
Vincent d'Herbemont
No 2025-36, EconomiX Working Papers from University of Paris Nanterre, EconomiX
Abstract:
The transition towards low-carbon and digital technologies is set to profoundly reshape metals markets, particularly those required for battery manufacturing. Amid growing geoeconomic fragmentation, this shift is accelerating the implementation of public policies aimed at securing supply and strengthening the resilience of strategic technology value chains. In this context, we explore the design of the recently adopted Critical Raw Materials Act (CRMA) in the European Union, focusing on the feasibility of its reshoring targets for battery-grade lithium.By integrating the entire lithium value chain into an Integrated Assessment Model, we analyse the interplay between lithium supply, demand, and recycling within decarbonisation scenarios. Our findings suggest significant challenges in meeting the CRMA targets without reducing industrial demand. We show that sufficiency strategies could help achieve these benchmarks, while cutting European lithium imports by at least 44% between 2030 and 2050 and reducing cumulative final demand by 1.2 Mt, a 46% decrease relative to current policy trajectories.More broadly, our analysis highlights sufficiency as a lever to reconcile ecological ambition with supply security, notably by enhancing the robustness of the lithium value chain. Finally, we recommend shifting the CRMA’s recycling benchmark towards an end-of-life recycling rate, as it is better suited to the dynamics of the lithium market.
Keywords: Critical raw materials; Lithium; Integrated assessment model (IAM); Low-carbon scenarios; Sufficiency (search for similar items in EconPapers)
JEL-codes: C61 Q32 Q38 (search for similar items in EconPapers)
Pages: 83 pages
Date: 2025
New Economics Papers: this item is included in nep-eec, nep-env and nep-inv
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2025-36
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