The EU’s Race for Clean Energy: At What Cost?

In the rush to clean energy, transition minerals are attracting major geopolitical and corporate interest. In the EU, where domestic mineral production is relatively low, concerns over the need to secure access to minerals – essential for European industry, the onshoring of renewable energy, and battery manufacturing capacity – have reached a critical point for policymakers. These concerns led to the EU Critical Raw Materials Act (CRMA) earlier this year. Meanwhile – existing policy options to reduce demand for new minerals – while achieving the objectives of the energy transition – are largely being ignored.

This article was orginially published in Business & Human Rights Resource Centre with Robin Roels, Caroline Avan, and Tommy Pratama.

Human rights too received relatively scant consideration in the CRMA. This has been a major source of concern for many civil society observers, given the mining sector’s track record. In contrast, the Corporate Sustainability Due Diligence Directive (2024) and the Battery Regulation (2023) have introduced new requirements for companies in the EU market to work to ensure their mineral supply chains are free from human rights and environmental harms.

This leaves EU policy at the point of trying to incentivise the production or import of transition minerals, whilst also increasing corporate accountability. This raises the question: how do the EU’s corporate human rights commitments co-exist with mechanisms to speed up the supply of raw materials, and in this balance, whose interests win out? Furthermore, what are the incentives for mineral-producing countries to embrace these new human rights due diligence requirements for companies placing products or operating in the EU?

The communities around Rio Tinto’s proposed lithium mine in Jadar, Serbia – on Europe’s doorstep and slated to become a designated ‘strategic project’ under the CRMA – know this tension all too well. This development, however, comes despite years of resistance to the project. In late 2021, concerns over the mine and changes to Serbia’s expropriation regime ignited a protest movement, leading to the government annulling the environmental licence in January 2022. Despite this, local residents remained concerned that Rio Tinto was playing a waiting game. They were proven right just over two years later: the project was reinstated in July 2024, with the strategic partnership between Serbia and the EU on raw materials, battery production and electric vehicles signed four days later – the Jadar mine said to be a driver of the agreement. The protest movement has been reinvigorated and one leading activist has faced threats for his resistance to the project.

On the other side of the world, in Indonesia, widespread mining and coal-fired smelting of the world’s largest nickel reserves and other transition minerals for EV batteries has already caused human rights harms, substantial deforestation, coastal destruction, and water and air pollution. The livelihoods and cultures of Indigenous Peoples on Sulawesi, North Maluku and surrounding islands are particularly impacted. Earlier this year, allegations of impacts on the isolated Sawai people led two European companies – BASF and Eramet – to withdraw from a nickel and cobalt refinery project. The livelihoods, health and way of life of Indonesia’s ‘sea nomads’, the Bajau people, around Kabaena Island have also been negatively impacted by nickel mining.

Indonesia’s government is aware of the global demand for sustainable sourcing. It already has good engagement with the Initiative for Responsible Mining Assurance, to begin the long process of strengthening the nation’s mining standards and governance. However, Indonesia’s priority is to optimise the economic potential of nickel and other transition minerals as quickly as possible. This is why the EU must provide sufficient technical and financial support to producer countries like Indonesia, to use the opportunities for more sustainable production that come with the EU Battery Regulation and other similar due diligence regulations.

Widespread community opposition, allegations of violations of the right to access information, threats to human rights defenders, to the rights of Indigenous Peoples and severe environmental degradation have to be an immediate red flag for any company conducting human rights due diligence. Sustainability issues at Jadar and nickel operations in Indonesia would likely be covered by the supply chain due diligence requirements that the Battery Regulation places on manufacturers, importers or distributors of batteries placed on the EU market. Eventually, European corporate end users of the lithium produced in Serbia and the nickel produced in Indonesia will need to demonstrate that they are taking action to address human rights and environmental harms in their mineral supply chain.

The effectiveness of new corporate accountability legislation – which has the potential to firmly establish the EU as the world’s only real sustainable market – will be constrained if at the same time the CRMA is facilitating a rollback of environmental and social safeguards under the name of accelerating implementation, and if producer countries like Indonesia or Serbia are not incentivised to ensure compliance with new legislation on responsible supply chains.

For the EU to avoid sending mixed signals, it needs stronger policy coherence, ensuring environmental and social commitments do not become secondary to supply concerns. It must also consider how to reduce overall demand for primary raw materials by embracing a sufficiency-first approach: focusing on reducing consumption, enhancing circularity, and prolonging product lifespans.