The year 2022 was difficult.

War, crises and conflicts have constantly accompanied us over the past twelve months, have pushed us to our limits, mercilessly exposed our weaknesses - and made us emphatically aware of the need for economic transformation.

The successful transition to a climate-neutral future has long been a premise of industry, politics and society.

The concrete design moves – necessarily and finally – to the fore.

The analysis of the current framework conditions reveals many problems.

One of them was – at least to the general public – almost unknown until recently: the availability of raw materials.

It is now clear that the industrial shift towards more climate protection requires a new raw material basis.

Some even speak of an “age of raw materials”.

In fact, specific raw materials form the basis for the transformation - and thus for the future of our industrial value creation.

Raw materials policy is also location policy.

Their design determines our competitiveness and thus our role and relevance on the way to climate neutrality.

The automotive industry has long since set out to take a consistent path towards electromobility.

A central factor for further successful ramp-up is the availability of raw materials: Batteries primarily need lithium, nickel, graphite and cobalt, the electric motor needs rare earths for permanent magnets.

Monitoring the availability of raw materials and the expected demand is therefore essential and impressively illustrates the urgent need for action: In all forecasts, demand will increase enormously.

With the battery raw materials mentioned, it will increase at least fourfold, in some cases sevenfold.

Recycling alone is not enough

The automotive industry is also already investing massively in the development of recycling technologies in order to build up a circular economy.

However, it will be a long time before this potential can develop sufficiently.

In ten years, the recycling processes will probably be able to cover just 10 percent of the total raw material requirements in Europe.

We are therefore still dependent on imports.

It is crucial to have diverse sources of supply worldwide that cover the increasing demand in a crisis-proof manner.

However, a look at the current situation shows no picture of independence.

Germany and Europe are dependent on a few countries for both mining and further processing.

This is mainly due to the fact that Berlin and Brussels have failed in recent years to underpin the ambitious goals in climate policy with strategic, economic policy decisions.

Politically, the need for an active raw materials policy was ignored for a long time - and has not been pursued with the necessary determination to this day.

This contradicts the legitimate expectation that companies should be more diversified and resilient!

The problem is exacerbated by the committed approach of other regions of the world - the markets for raw materials are currently being distributed as far as possible without us.

A major omission that, without a massive course correction, will slow down our transformation or, in the worst case, slow it down.

That doesn't have to happen if Berlin and Brussels act decisively now.

Raw materials are an economic policy challenge

Preventing raw material shortages is not a geological challenge - it is an economic one.

This central insight must ensure more political speed.

Europe now needs a strategic raw materials agency and a commitment to providing venture capital for strategic raw materials projects.

The ball is in politics: it is only at this level that the framework agreements can be concluded, which will then enable the industry to start appropriate entrepreneurial initiatives and projects with legal certainty.

We are ready!

A recent example: Africa.

All raw materials for electromobility can be found there, but are often not processed locally, but primarily in China.

An opportunity for us: Germany and the EU must support the on-site processing of the raw materials.

We have to enable part of the value chain locally in order to set ourselves apart from our competitors.

In this way, we not only ensure a sustainable supply of raw materials, but also promote local economic development.

The fact is: time is against us.

In order to give us new options on the global raw materials market, we now need large-scale stimuli from politicians.

Raw materials policy means creating options.

The strategies from Brussels and Berlin must not get bogged down in bureaucratic details, but must be implemented as quickly as possible.

Raw material and trade agreements are the supporting pillars for a crisis-proof, robust and successful transformation of the economy.

Let's work together to face the challenges ahead!

Hildegard Müller is President of the German Association of the Automotive Industry (VDA).