The European Union's transition to clean energy could be slowed by its lack of success in finding new sources of critical raw materials, according to a report from the European Court of Auditors, or ECA.

The analysis found the EU's inability to diversify supply means it must continue to rely on imported critical raw materials from a small number of countries.

The report, which was published on Monday, said the EU had worked hard to find new suppliers and had signed 14 major new trade deals in a bid to diversify supply, but that the 27-nation bloc was "unlikely to succeed in time" and that its efforts to find additional sources by the end of the decade were "yet to produce tangible results".

The drive to diversify the supply of 34 critical raw materials and to increase their recycling and reuse was demanded by 2024's Critical Raw Materials Act. It calls for new reliable sources of the materials, which are crucial for clean technologies, including electric vehicle batteries, wind turbines, and solar panels. The materials are also needed by the defence sector.

Euronews quoted Keit Pentus-Rosimannus, a member of the ECA, as saying: "Without critical raw materials, there will be no energy transition, no competitiveness, and no strategic autonomy."

She said the EU is dependent on a handful of countries outside the bloc for the supply of these materials.

China supplies 97 percent of the EU's magnesium, which is used in hydrogen-generating electrolyzers. Other critical raw materials imported in large quantities include arsenic, barite, gallium, germanium, graphite, and tungsten, the ECA report added.

Other countries, including Chile and Turkiye, also have significant quantities of some critical raw materials, including boron and lithium, but the report noted that China produces most of the materials, thanks to its efficacy in extraction and refining.

The ECA said the recently signed EU-Mercosur trade deal with countries including Argentina, Brazil, Paraguay and Uruguay should open up new sources in the long term.

To maximize its purchasing power and efficiency in locating supplies, the EU is setting up a centralized raw materials department to coordinate acquisitions, in the face of competition from other nations, including the United States, which has reportedly been stockpiling imports in recent years.

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