Canada could help meet Europe's need for a diversified supply of critical minerals, but it has to be more strategic and proactive.

[The authors of this piece are Joanna Kyriazis, Clean Energy Canada’s director of policy and strategy, and Evan Pivnick is Clean Energy Canada’s associate director of public affairs. Clean Energy Canada is a think tank at Simon Fraser University.]

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Canada has significant reserves of critical minerals. But with the Americans failing to play fair, Canada has an opportunity to take its business elsewhere, chiefly by prioritizing trade with jurisdictions where we have reliable and functioning free trade agreements. Enter the European Union.

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The EU ... is actively seeking countries like Canada to solve a growing problem: a reliance on a small handful of non-allied countries — China in particular — for its critical minerals supply.

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The EU is leading the field when it comes to the energy transition, making big moves to cut dependence on (pricey and usually imported) fossil fuels by supporting electrification and building more domestic renewable power. EU lithium demand from EVs and energy storage is projected to increase nine- to 12-fold by 2030, for example.

And yet the EU does not have sufficient domestic resources to meet the increasing demand for critical minerals. In fact, it is aiming to supply just 10% of its extraction needs domestically and, for the remaining 90%, has set ambitious targets to reduce its reliance on any one single country. The EU is also specifically seeking global partners that meet its high environmental, social and governance standards.

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The last year or so has seen a flurry of memorandums of understanding and agreements on critical minerals, with Canada signing deals with numerous EU partners, including Italy, Germany and Sweden.

While these represent real progress, we need to move past the MOU stage and focus on key areas of EU demand while leveraging Canada’s existing strengths. The upcoming Canada Investment Summit on September 14 and 15 represents a key opportunity to get these wheels turning, provided the right people are at the table.

To more effectively woo European interest, Canada needs to do a better job of promoting its ample advantages and tailoring them to the EU’s requirements. Canada has a number of specific opportunities that it could seize, from sending our low-carbon raw cobalt to refineries in Finland (reducing the EU’s dependence on the Congo) to exporting graphite to German EV battery manufacturers (limiting their reliance on Chinese supply).

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Additionally, Canada should stop splitting Canadian public investment resources across tens of critical minerals and focus a greater share on just six that are essential to the global energy transition and the EU’s growing clean-energy sector: cobalt, copper, graphite, lithium, nickel and rare earth elements.

By being proactive, Canada could also unlock new EU financing opportunities. Canada already has a letter of intent with the European Investment Bank — one of the biggest multilateral financial institutions in the world — to cooperate on critical minerals. The next step is to convert this into a signed framework and first transaction as soon as possible. Canada could also work to get more Canadian projects onto the EU’s strategic projects list, which could further unlock European investment.

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