How Dependent Is Germany on Raw Material Imports? An Analysis of Inputs to Produce Key Technologies
Key Messages
- The production of key technologies such as electric motors, batteries and wind turbines is often dependent on imported raw materials.
- Using German data, we analyze important raw materials that are re-quired to produce key technologies in Germany. We identify nine critical raw materials (1) with a high degree of supplier concentration and (2) which are used in the production of more than four key technologies.
- Except rare earths, Germany imports all critical raw materials from at least four of the top 5 exporters worldwide, which indicates a high diver-sification of sourcing. However, it is crucial to deepen existing trade rela-tionships and to acquire new sourcing partners to increase resilience.
- China is among the top 5 exporters worldwide in seven out of the nine listed critical raw materials.
- We evaluate working conditions, environment, and democracy in the sourcing countries. Germany’s sourcing countries score better than those of the US and China. However, raw materials such as boron or rare earths are often imported from countries that perform poorly in those categories.
The Ukraine war and geopolitical tensions pose major challenges for supply chains. Whereas shortages of microchips became a symbol of supply chain disruptions during Covid-19, a survey from June 2022 from the ifo Institute shows that over 74% of German manufacturing firms report production disruptions due to shortages of different types of inputs and raw materials. The production of key technologies that are necessary, for instance for the energy transition, often depends on imported raw materials. Therefore, it is important to evaluate Germany’s raw material dependencies at the product level to identify the risk of future supply chain disruptions. This paper identifies nine critical raw materials, which have a high degree of supplier concentration and are used in more than half of the key technologies. For these raw materials, we provide a detailed analysis on Germany’s dependency on imports.
Lisandra Flach, Isabella Gourevich, Leif Grandum, Lisa Scheckenhofer, Feodora Teti: “How Dependent Is Germany on Raw Material Imports? An Analysis of Inputs to Produce Key Technologies,” EconPol Policy Brief 43, July 2022.