Raw Materials Club

European Competitiveness

In a recent report on European competitiveness, Mario Draghi pays significant attention to the manufacturing sector. The EU’s research and innovation policy is not sufficiently linked to its industrial policy. The Horizon Europe program has not prioritized manufacturing processes and the EU faces barriers in bringing innovations to market and scaling up in the field of clean technologies. The EU must orchestrate and develop industrial applications once the key problems have been framed. More research teams and early-stage start-ups are needed to solve technical, industrial, and commercial problems and applications relevant to increasing the competitiveness of Europe.

In the field of materials, Europe relies on a handful of suppliers for critical raw materials, especially China, even as global demand for those materials is exploding owing to the clean energy transition. In many of the cleantech sectors, the EU had an industrial “first-mover” advantage and established leadership but was unable to maintain that lead. In certain sectors, such as solar PV, the EU has already lost its manufacturing capacities.

Critical raw materials are needed to deliver clean energy technologies for the green transition (e.g. lithium, cobalt, and nickel for producing batteries), advanced technologies for the digital transition (e.g. gallium for semi-conductors), and defense and space applications (e.g. titanium and tungsten). The EU’s share of the global production of most critical raw materials is lower than 7%. In 2023, the European Commission identified 34 critical raw materials and 16 strategic materials that are crucial to technologies essential for Europe’s green and digital transitions and for defense and space applications, while being subject to potential supply risks in the future.

Draghi suggests that the EU should develop a genuine “foreign economic policy” based on securing critical resources and implementing the Critical Raw Materials Act rapidly and fully. To ensure a broader global impact, the EU should develop joint strategies with other buyers from strategically aligned countries, for example through a G7+ Critical Raw Materials Club (including Japan, South Korea, and Australia).

The Critical Raw Materials Club would promote free trade in critical raw materials, support joint initiatives in technological transfer, research, and development, offer a long-term perspective on fair prices for raw materials, and create instruments for investment in downstream and energy capacities. This should be based on knowledge sharing, whereby beneficiaries would disseminate findings among the EU’s industrial community to scale innovations up to the commercial level. By being proactive in this area, Finland could ensure the competitiveness of Finnish manufacturing in the field of materials.

Compared to many European countries, Finland has a relatively favorable position in the material sector as we possess significant mineral resources and mining activities. In addition, Finland also has considerable refining capacity e.g., in cobalt and nickel. Nonetheless, the same vulnerabilities that characterize Europe at large also concern Finnish manufacturing companies. In response to these challenges, MEX Finland has initiated discussions among its members and stakeholders regarding joint efforts to deal with the topic of material resilience in the face of unexpected changes in the market for raw materials. We would aim to develop deep know-how in relevant material technologies and use this as a basis for manufacturing companies to improve their competitiveness and increase their sales and exports. Establishing a national innovation community to support the efforts would make the material supply for the Finnish manufacturing sector more resilient.

Three types of activities could be undertaken to promote material resilience:

First, provide a digitally supported Collaboration Platform to enhance the ability of the Finnish manufacturing sector to resiliently handle their material supplies focusing on critical metals and metal processing supplies.

Second, research and development together with a growing number of partners to strengthen the Finnish ability to flexibly reconfigure industrial raw material supply arrangements in pace with changing security and sustainability demands through a new Material Resilience Competence Center.

Third, Pilots & Proofs of Concept to build capabilities and strengthen the competitiveness of the participating companies considering, too, the potential for funding from Business Finland.

Against this background, MEX Finland and Synocus have engaged MEX Finland members specialized in developing state-of-the-art knowledge in this area to identify focus areas that should be addressed by the Finnish manufacturing sector to ensure future material resilience.

Examples of new initiatives among the MEX Finland members include Sacometal’s Resilient Bronze project including the development of lead-free bronze alloys and Metlab’s major expansion of its premises. These efforts would also prepare the Finnish manufacturing sector to participate in possible upcoming discussions around a Critical Raw Materials Club, in accordance with the principles outlined in the Draghi report. Such participation would also call for new collaboration models and technological capabilities, which could be provided by leading Finnish companies according to the European aim of knowledge sharing and joint strategies.

Engaging innovation partners

Synocus and MEX Finland will continue to support this work, and if you are interested in participating in the discussions around this topic, and the possible development of a new development project in this area, please contact

Niklas Koski
Project Manager, Synocus
niklas.koski(at)synocus.com