One Billion Euros for Germany's Raw Material Security
The KfW development bank has provided one billion euros for Germany’s raw material security. One of the most important projects planned by the coalition government to ensure the supply of German industry is thus becoming possible after all: Robert Habeck’s raw materials fund. After it was not permitted to be drawn from the Climate and Transformation Fund last year due to budget cuts, Germany can now finally catch up with its European partners in terms of raw material resilience.
Development of Untapped Commodities in Other Countries
With the equity capital provided by the bank, Germany can support projects domestically and abroad between 2024 and 2028 that serve the extraction, processing, and recycling of production-critical raw materials. This represents a major contribution to the raw material security of our industry. By establishing our own processing capacities in Germany and Europe, dependence on China can be reduced. Furthermore, there are other countries with attractive, previously untapped raw material deposits that Germany could develop.
Dependence as a Means of Pressure
Since the turning point ushered in by the Russian invasion of Ukraine, raw material supply has become a top political issue. Companies still do not adequately factor in the risk of sudden supply disruptions. They can no longer rely on cheap technology metals (such as gallium, indium, or rhenium) and rare earths (such as neodymium oxide, dysprosium oxide, or gadolinium oxide) from China, as China could otherwise use Germany’s dependence as a means of pressure. While France and Italy had already established funds of 2 billion and one billion euros respectively, relatively little has happened in Germany. Just yesterday, proposals from two parties regarding the country’s raw material supply were rejected by the Bundestag.
Germany Soon No Longer at the Bottom?
With Germany, three EU countries now have the opportunity to work toward the EU goal of sourcing a maximum of 70% of their annual demand for a strategically important commodity from a single third country as of 2030. With its three funds, the trio could also become an important building block for the much-discussed international raw materials circle. In this framework, producing countries such as Australia or Canada aim to join forces with major consumer regions such as the EU and the USA. This provides an optimistic outlook for a future in which Germany is no longer the economic laggard but has evolved into an active player in building a supply chain independent of China.