Skip to main content

The Europeans

Menu
An interactive briefing · Europe & the AI supply chain

Anatomy of an answer

The refined minerals the hardware is built from, and the electricity it runs on.

LAYER 06 / 08 · RESOURCES

Resources: minerals and electricity

IN PLAIN TERMSEverything above this point is manufactured. This layer is what gets consumed: refined minerals to build the hardware, and electricity to run it. Minerals are traded globally, and an exporting country can restrict them. Electricity is also traded — European interconnectors move large volumes across borders — but transmission losses and grid capacity mean it is bought regionally rather than shipped between continents, so a data centre is built where the power already is.
6A · CRITICAL MINERALS

Critical minerals

China’s share of global refining capacity, by material Gallium 98% Graphite (anode) 95% Rare earths (refining) 90% Magnesium 89% Germanium 60% EU target: refine 40% of strategic materials at home by 2030
Indicative; shares vary by source and year. Verify against USGS and the EU Critical Raw Materials Act annexes.
IN PLAIN TERMSBefore any chip exists, someone must turn raw ore into ultra-pure materials: gallium for power electronics, germanium for optics, rare earths for the magnets in cooling systems and drives. Mining happens in many countries. The hard, dirty, low-margin step — refining — was largely ceded to China over three decades.
WHO CONTROLS IT — refined gallium supply
China ≈98%Rest of world
0%
of the EU's gallium has come from China, which also refines around 90% of the world's rare earths.

What's being done — and will it work? The EU's Critical Raw Materials Act (2024) sets 2030 targets: refine 40% of strategic materials domestically, source no more than 65% of any one from a single country. Concrete projects exist — Solvay is restarting rare-earth processing in La Rochelle; Sweden's Per Geijer deposit near Kiruna is Europe's largest known find. One project is further along than the rest. In Greece, METLEN Energy & Metals is building integrated gallium production at the Aluminium of Greece complex in Agios Nikolaos, Viotia — a €300m investment, recognised as a strategic project under the Critical Raw Materials Act and backed by European Investment Bank financing. Output is due to begin in 2027 and reach 50 tonnes a year by 2028, a volume that would cover the entire EU demand for gallium. In July 2026 METLEN signed a long-term agreement to supply about a quarter of that output to an unnamed leading US technology company — the first commercial gallium supply deal between a European producer and an American buyer, and a sign that the material has passed the customer qualification testing that sinks many new critical-minerals projects. But the targets are not binding, refining margins are thin without price guarantees, and new mines take 10–15 years to open. The conventional wisdom among specialists is that these dependencies might ease somewhat after 2030, but will not disappear within the decade.

6B · ELECTRICITY

Electricity

0 250 500 750 1000 2018 2022 2026 2030 ~945 TWh by 2030 more than Japan’s total electricity consumption today 415 TWh, 2024 ≈1.5% of world demand World electricity consumed by data centres, terawatt-hours Projection dashed. Source: IEA, Electricity 2026.
Projection dashed. Source: IEA, Energy and AI, April 2025.
IN PLAIN TERMSTraining a single frontier model consumes electricity on the scale of tens of thousands of households for a year; serving it to millions of users consumes more still. Data centres already use around 1.5% of the world's electricity, heading towards roughly double by 2030. Power — cheap, reliable, low-carbon — is becoming the scarcest AI input of all.
What industry pays for electricity, euro cents per kilowatt-hour European Union 19.9c China 8.2c United States 7.5c EU industry pays roughly 2.5 times US prices and about 2.4 times Chinese prices. Within Europe, Nordic and French prices sit well below the EU average.
2024 industrial electricity prices, BusinessEurope. The IEA’s Electricity 2026 report finds EU prices for energy-intensive industry in 2025 still above twice US levels and around 50% above China.
0%+
of global electricity demand could come from data centres by 2030 — roughly double today's share.

Europe’s advantage here is not price. On price it is at a clear disadvantage: the IEA found that in 2025 EU electricity for energy-intensive industry averaged more than twice US levels and around 50% above China’s, and the cost was cited among the reasons OpenAI paused its planned UK data-centre project. What Europe does have is a low-carbon supply mix — French nuclear, Nordic and Alpine hydro — and specific regions where power is both clean and cheap by European standards, which is why Nordic and French sites attract AI investment while Germany and Italy do not.

What’s being done: the constraint most often reported is the wait to connect. Grid connection queues now run to years across much of Europe: Ireland has frozen new data-centre connections in the Dublin area until 2028, the Netherlands has declared grid congestion across large parts of the country with waiting lists for industrial connections, and analysis of local price effects suggests concentrated data-centre growth can raise regional electricity costs by 20–40% in hotspots such as Slough or the Paris region. The Commission’s Grid Action Plan and the 2026 grids package aim at faster permitting and more cross-border transmission; both address the queue rather than the price, and neither changes the tax and levy structure that accounts for much of the European price gap.

Europe imports almost all of its refined gallium and rare earths, and the 2030 targets are unlikely to change that materially. Its position on electricity is stronger: low-carbon generation is abundant, and the constraint is the speed of grid connection rather than supply.

Next in the series · Part 4People and money

Who does the research, who employs the researchers, and who funds the companies.

Coming soon.