Renewable Energy

The expansion of these technologies is increasing worldwide. In the European Union alone, the share of renewable energies in gross final energy consumption rose from 12.5% in 2010 to 24.6% in 2023 (European Commission, n.d.). 

Countries such as Sweden, Finland, and Denmark lead the way in Europe with shares of over 40% (EU Commission, n.d.). However, renewable energies are often resource-intensive technologies. Their production requires so-called critical raw materials including, lithium, cobalt and nickel. These minerals often come from regions outside Europe, and sourcing these materials often contributes to adverse impacts on people and the environment. 

• For instance, the countries with the largest lithium reserves are Bolivia, Chile, Argentina, China, the USA and Australia (Arief et al., 2025).
• A similar geographic concentration can also be found for cobalt, where the Democratic Republic of the Congo is the major producer, accounting for 62% of global output since 2010 and 70% by 2021. Other major cobalt producers are Russia, Australia, the Philippines, and Cuba (Howard et al., 2023).
• The same goes for Nickel, this resource is predominately produced and sourced in a small number of countries, such as Indonesia, the Philippines, New Caledonia (France) and the Russian Federation (Reichl et al., 2025).

All three minerals have various fields of application and are equally significant for the development of renewable energy systems.  Cobalt is mostly utilized in rechargeable battery manufacture.  It is a major material for batteries, smartphones, laptops, and electric vehicles (Howard et al., 2023). For lithium, their application ranges from glass and medicines to batteries, particularly those used for grid energy storage and electric vehicles (Jones, 2024).  Nickel is the most utilized material in traction batteries, which is the central component used to power electric vehicles (Betz et al., 2021). 

Since the demand for electric vehicles has risen over the past few years, the production of lithium-ion battery cells has increased significantly over the last few years (Betz et al., 2021). With more and more people switching to fully electric vehicles, the demand for cobalt will also consequently grow.  Such a surge in demand makes the cobalt supply chain extremely vulnerable to supply shortages. Cobalt has been identified as one of the most vulnerable raw materials in supply chains (Howard et al., 2023).

The Union's economy and how the European market works depend on access to raw materials (European Parliament & Council of the European Union, 2024). However, research shows that raw materials are becoming a climate issue, too. All three mentioned minerals are essential for the expansion of renewable energy (Bobba et al., 2020). Since many of these raw materials come from a small number of third countries, this creates structural dependencies. 

On the political level the EU Battery Regulation and the Critical Raw Materials Act address this resource reliance: 

To overcome the increasing dependence on critical raw materials such as lithium, cobalt, and nickel from countries outside Europe, a systematic, preventive due diligence approach is necessary to effectively address these challenges. The European Union Directive on Corporate Sustainability Due Diligence requires large companies to identify and assess human rights and environmental risks along their supply chain. Companies shall cease and prevent adverse impacts and track the implementation and effectiveness of the enterprise’s due diligence activities.

There are similar regulations in other parts of the world that head in the same direction, such as Australia’s Modern Slavery Act or Canada’s Bill S-211. Global regulations are necessary to prevent risks such as human rights violations or environmental damage. As global supply chains are complex and fragmented, national regulations are inconsistent, without central guidelines risks remain undetected and are often insufficiently managed (IHRB, 2023). 

Despite the ambitious and necessary European Union requirements of the Corporate Sustainability Due Diligence Directive and the Critical Raw Materials Act, many companies find it challenging to obtain the necessary resources, guidance and knowledge on this topic. With many regulations in place, it can be difficult for companies to maintain an overview and implement them correctly due to a lack of or missing guidelines on due diligence practices. 

The DiliCHANCE project offers a One-Stop Shop for successful Due Diligence in mineral supply chains. 

Arief, M., Alonso, Y., Oshiro, C., Xu, W., Corso, A., Yin, D. Z., Caers, J. K., & Kochenderfer, M. J. (2025). Managing Geological Uncertainty in Critical Mineral Supply Chains: A  POMDP Approach with Application to U.S. Lithium Resources. arXiv (Cornell University). https://doi.org/10.48550/arxiv.2502.05690

Betz, J., Stefanie Degreif, Degreif, S., & Dolega, P. (2021). State of Play and  Roadmap Concept:  Mobility Sector. In Re-Sourcing Project. Retrieved July 31, 2025, from https://re-sourcing.eu/content/uploads/2022/11/sop_mobility_sector-1.pdf

Bobba, S., Carrara, S., Huisman, J., Mathieux, F., & Pavel, C. (2020). Critical Raw Materials for Strategic Technologies and Sectors in the EU - a Foresight Study. In European Commission (ET-04-20-034-EN-N). https://doi.org/10.2873/58081

European Commission. (n.d.). Renewable Energy Directive. Retrieved August 19, 2025, from https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-directive_en

European Parliament & Council of the European Union. (2024). Regulation (EU) 2024/1252 of the European Parliament and of the Council of 11 April 2024 establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1724 and (EU) 2019/1020 (Text with EEA relevance). In EUR-Lex (No. 32024R1252). Retrieved July 31, 2025, from https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32024R1252

Howard, M., Gifford, S., Faraday Institution, Cobalt Institute, USGS Mineral Commodity Summaries, Katanga Mining Limited, Department for Business, Energy and Industrial Strategy, European Commission, & Faraday Institution. (2023). Building a responsible cobalt supply chain. In Faraday Insights: Vol. Issue 7 [Journal-article]. https://www.faraday.ac.uk/wp-content/uploads/2023/01/Faraday_Insights_7_Jan23_Final.pdf

IHRB. (2023, January 11). What is the Proposed EU Corporate Sustainability Due Diligence Directive. Retrieved July 31, 2025, from https://www.ihrb.org/resources/what-is-the-proposed-eu-corporate-sustainability-due-diligence-directive?utm_source=chatgpt.com

Jones, E. C. (2024). Lithium Supply Chain Optimization: A global analysis of critical minerals for batteries. Energies, 17(11), 2685. https://doi.org/10.3390/en17112685

Reichl, C., Schatz, M., & Federal Ministry of Finance. (2025). World Mining Data 2025. In Federal Ministry of Finance (No. 978-3-901074-58–5). Retrieved July 31, 2025, from https://www.bmf.gv.at/dam/jcr:b778238b-9952-4fee-84ab-f3293b00c4e9/WMD%202025.pdf