Australia and the European Union have established an impressive web of agreements and frameworks over the past two years to strengthen critical-minerals cooperation. Yet the ultimate test will be whether these commitments can deliver the regulatory stability, commercial predictability and enduring political alignment required to catalyse large-scale private investment.
The EU’s Critical Raw Materials Act (CRMA), which entered into force on 23 May 2024, sets ambitious targets for domestic production to satisfy the bloc’s consumption of critical minerals by 2030: 10 percent from extraction; 40 percent through processing; and 25 percent through recycling. It further states that ‘not more than 65 percent of the EU’s annual consumption of each strategic raw material at any relevant stage of processing should come from a third country.’
Complementing the CRMA, the EU’s Competitiveness Compass lays out a strategic roadmap to boost innovation, decarbonise the economy and reduce external dependencies. Earlier regulation such as the 2023 battery regulation sets out sustainability, safety, labelling and due diligence requirements for all battery types placed on the EU market, including provisions on waste management, extended producer responsibility and green public procurement.
In addition, a material and digital traceability project aims to enhance the traceability and certification of critical raw materials by developing integrated digital and geo-based tracking solutions across complex supply chains, from extraction to recycling.
Against this regulatory backdrop, on 25 October, European Commission President Ursula von der Leyen announced the RESourceEU scheme. Under the scheme, the bloc will deepen partnerships with Australia, Canada, Chile, Greenland, Kazakhstan, Ukraine and Uzbekistan to lessen a dependence on China for critical raw materials, while securing supplies for the clean energy, defence and electric vehicle industries. Britain, Canada and the EU are also considering a G7-level coordinated response to China’s critical-minerals export controls.
With the EU sharpening its critical-minerals strategy, Australia–EU engagement has accelerated. Just five days after the CRMA came into force, the EU and Australia signed a memorandum of understanding on sustainable and critical minerals, underscoring shared goals for resilient, transparent and ethical supply chains.
The European Commission has since also approved 47 new projects under the CRMA, a key initiative to bolster the bloc’s supply chains for critical and strategic materials vital to the green, digital, defence and aerospace sectors. Several Australia-linked companies’ projects are involved, including Vulcan Energy’s Lionheart project in Germany, Talga Group’s graphite mine in Sweden, and Jervois Finland’s cobalt refinery expansion. These three projects reflect a shift from raw material extraction to value-added processing within the EU’s battery and electric-vehicle supply chains. They emphasise low-carbon, sustainable production, aligning with the EU’s decarbonisation and ethical sourcing goals.
In contrast, Arafura Rare Earths’ five-year offtake agreement with Traxys focuses on exporting Australian-produced neodymium-praseodymium oxide to Europe. It reinforces Australia’s role as an external supplier supporting Europe’s diversification, rather than participating directly in EU-based processing expansion.
In addition, Australia also participates in broader European initiatives. For example, the Australian Trade Commission, the Western Australian government and several Australian companies and universities actively contribute their expertise in raw materials, advanced materials and processing through the European Raw Minerals Alliance.
Australia has also deepened bilateral partnerships with individual EU member states. Australia and France signed a bilateral agreement in September 2023 to deepen cooperation on critical-mineral supply chains. The partnership includes a joint study to assess both countries’ needs for materials essential to clean energy, defence and medical technologies such as batteries and rare earth magnets.
Similarly, Australia and Germany signed a joint declaration in April 2023 to conduct a feasibility study on establishing sustainable, resilient critical-minerals value chains between the two countries. The study will assess key raw materials; project opportunities; company involvement; and environmental, social and governance standards with the goal of identifying joint investment opportunities.
Geopolitical pressures are accelerating cooperation. China’s continued dominance in midstream processing, expansion of export controls and leverage over technology transfer have made diversification a strategic priority for both Brussels and Canberra. This shared incentive has opened political space for deeper alignment. But it also raises the importance of ensuring that new supply chains are economically and operationally sustainable.
A central challenge for the Australia–EU critical-minerals partnership is the structural cost of aligning two highly regulated systems. Europe’s regulatory rigidity and Australia’s high-cost operational environment together raise production expenses, prolong the issuing of permits and complicate project delivery in an already competitive global market. These pressures risk weakening the commercial case for joint ventures and export pathways, underscoring that genuine progress will require practical policy innovation and shared risk-mitigation mechanisms, not just high-level political declarations.