Nearly Complete Import Dependency for Key Raw Materials

German industry is highly dependent on imports of key materials required for future technologies.
For raw materials such as lithium, nickel, and rare earth elements, import dependency is close to 100%.
These materials are essential inputs for batteries, semiconductors, wind turbines, electric vehicles, and the defense industry.
In 2024, China accounted for 66% of Germany’s rare earth imports, significantly above the EU average.
These raw materials are deeply embedded in industrial production processes, often already at the level of intermediate products, and their use continues to grow.
Even in small quantities, they can have a significant impact on production processes and are indispensable for many industrial applications, such as permanent magnets used in the automotive industry.

The Circular Economy is more than a sustainability concept for German industry.
It is a strategic lever for strengthening the resilience of Germany’s industrial base.

Import Dependency Threatens Germany’s Industrial Base

The prosperity of Germany as an export-oriented nation is largely based on secure and competitive access to raw materials. At the same time, with imports accounting for around 40% of its gross domestic product, Germany is one of the most open economies in the world and has one of the highest import ratios among major industrialized countries in Europe.

This strong dependence on imports is accompanied by growing risks. Volatile raw material prices increase working capital requirements and make investment and production planning more difficult. For example, copper and aluminium prices have risen by around 60% over the past five years, while copper prices fluctuated by as much as €2,500 per tonne between 2020 and 2024. Similar price volatility can be observed for lithium and nickel.

At the same time, the geopolitical dimension of raw material supply is becoming increasingly important.
Critical raw materials are increasingly being used as instruments of political influence, for example through export restrictions or new tariff regimes. In response, the EU adopted the Critical Raw Materials Act, which identifies critical and strategic raw materials and requires companies to systematically assess risks within their supply chains.

Supply Bottlenecks Increase the Urgency for Action

These structural risks are expected to intensify further. Demand for critical and strategic raw materials is rising significantly, driven by the energy transition, digitalization, electromobility, and geopolitical security requirements. Germany already imports more than 8 million tonnes of critical raw materials each year.

At the same time, the supply of primary raw materials is increasingly reaching its limits.
The combination of rising demand, limited extraction capacities, geopolitical tensions, and long lead times for new projects increases the risk that future demand for critical minerals can no longer be met through primary supply alone. This development is exacerbating existing dependencies and increasing the vulnerability of linear value chain models to disruptions and crises.