Germany Addresses Critical Materials

Germany Addresses Critical Materials

Germany’s economy and climate ministry (BMWK) Issued a report showing that Germany was very dependent on critical materials, more so than previously thought.

An article, referring to the report, in Clean Energy Wire (CLEW) said:

According to the report, Germany imports 39 of the 46 most relevant raw materials needed to achieve strategic targets in energy and industrial policy, with China being the dominant supplier for 23 of these. More than 90 percent of rare earth minerals used by Germany come from China,

As a result, there is a proposal for the German government to purchase critical materials and create large inventories of critical materials from which industry could draw.

While this approach has been used in South Korea and Japan, the large number of small industrial companies in Germany might make this approach unworkable.

What’s fascinating is that Germany would source these materials, for its exclusive benefit, in competition with other European countries. No mention about how competition for these materials would drive up their cost.

It’s more likely that the EU would approach the issue of procurement as a group to prevent cut-throat competition that would harm every European country.

And this raises another interesting concern.

If Germany has recognized it will be dependent on other countries, especially China, for critical materials, it’s obvious the United States would also be dependent.

A European consortium buying critical materials would mean the United States would be in competition with the EU for the same materials.

China would be the kingmaker and benefit from the world beating a path to its door to buy the materials.

Germany’s sudden realization on how dependent it will be on these materials should be a wakeup call for the United States, where the government is blithely implementing policies that require the US to be reliant on the same materials.

The forthcoming book, Clean Energy Crisis, available in January, will review the issue of critical materials in detail.

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