Europe: The Russian invasion of Ukraine in 2022 accelerated Europe’s transition away from Russian fossil fuels and toward renewable energy. By 2024, renewables accounted for 46.9% of EU electricity generation, up from 34% in 2019, while fossil fuels fell to a historic low of 29%. For the first time, wind and solar together surpassed fossil fuels, generating 30% of EU electricity in the first half of 2024 compared to 27% of coal and gas. Wind power grew by nearly 10%, and solar by 20%, supported by favorable conditions and capacity additions. Hydropower also rebounded after years of drought, helping renewables exceed half of the EU’s power mix.

Fossil fuel generation dropped sharply, with coal output falling by 24% and gas by 14%, driving a 17% overall decline in fossil-based electricity. This structural shift reduced EU power sector emissions to less than half their 2007 peak and cut reliance on imported gas, saving billions in energy costs. Electricity demand, which had slumped during the energy crisis, rebounded slightly by 0.7% in 2024 but remains below pre-crisis levels.

The European Green Deal continues to anchor this transition. It legally binds the EU to climate neutrality by 2050 and a 55% emissions reduction by 2030, supported by the European Climate Law. Financing comes from the NextGeneration EU Recovery Plan, REPowerEU, and the EU’s seven-year budget, with over €500 billion allocated for climate and energy projects. However, the European Commission estimates an annual investment need of €1.24 trillion—about 7.8% of EU GDP—to meet 2030 targets, leaving a significant funding gap. Legislative updates under the Green Deal include the Carbon Border Adjustment Mechanism (CBAM), an expanded Emissions Trading System, and the Net-Zero Industry Act, aimed at scaling clean tech manufacturing. Despite progress, watchdogs warn of delays and political pushback that could weaken climate ambition during the 2024–2029 term.

In Europe, rare earth imports have declined sharply in recent years. By 2024, EU imports fell nearly 30%, totaling just 12,900 tons. This contraction highlights the region’s heavy dependence on external suppliers, with almost half of its imports coming from China (46%), followed by Russia (28%) and Malaysia (20%). To address these vulnerabilities, the EU passed the Critical Raw Materials Act (CRMA) in 2022, aiming to strengthen supply chains. However, analysts caution that rare earths remain a blind spot in Europe’s broader resource strategy. Despite these challenges, the EU rare earth metals market is forecast to grow modestly at a 1.6% compound annual growth rate (CAGR) through 2035. Still, Europe remains strategically exposed to “economic blackmail” due to China’s near-monopoly in refining and mining.

Asia: Energy demand in Southeast Asia is growing at one of the fastest rates globally, projected to rise 25% by 2035, driven by urbanization, industrialization, and population growth. Currently, fossil fuels dominate the region’s energy mix, accounting for around 80% of primary energy and 72% of power generation in 2024, with coal providing nearly half of electricity. Despite net-zero pledges by eight ASEAN countries—Brunei, Malaysia, Singapore, and Vietnam by 2050; Indonesia by 2060; and Thailand by 2065—progress is slow. Coal remains entrenched, and LNG imports, seen as a cleaner alternative, face cost and supply challenges, especially after Europe’s surge in LNG demand following Russia’s invasion of Ukraine.

South Asia faces similar hurdles. Coal still supplies about 60% of power generation, and plans to shift to LNG were disrupted by soaring prices and competition with Europe during the energy crisis. The region needs $367 billion in investment to stay on track for its 2050 decarbonization goals, but pandemic-related fiscal constraints and rising energy costs have slowed progress. While renewable energy capacity is expanding—solar and wind installations grew 30% between 2020 and 2024, clean energy investment remains far below required levels. ASEAN received only 2% of global clean energy investment in 2023, despite accounting for 9% of the global population.

Asia is investing in advanced technologies to accelerate its transition. Japan’s New Energy and Industrial Technology Development Organization (NEDO) and IHI Corp are leading projects under the Green Innovation Fund, including the development of ammonia-powered gas turbines and hydrogen infrastructure to support carbon-neutral aviation and power generation. Malaysia, through partnerships with IHI and Gentari, is building a green ammonia value chain aligned with its National Energy Transition Roadmap, aiming for large-scale hydrogen adoption by 2030.

Across Asia, China continues to dominate the rare earth sector, controlling roughly 90% of global trade. The Bayan Obo mine in Inner Mongolia remains the world’s largest, rare-earth production site, underscoring China’s vital role. The Asian market is projected to expand at a 3.4% CAGR through 2035, outpacing Europe’s growth. The years 2023 and 2024 brought turbulence to critical minerals markets, with sharp price drops following earlier surges. Yet rare earths retained their strategic importance, particularly for electric vehicles, batteries, and defense technologies. China further consolidated its position in 2023 through mergers and acquisitions, tightening its grip on the sector.

Looking ahead to 2025 and beyond, global demand for rare earths is expected to continue rising, with growth of 6–8% recorded in 2024. Much of this demand is driven by clean energy technologies such as electric vehicles, renewable energy systems, and grid networks. Asia’s production is projected to reach 360 million kilograms in 2025, with annual growth of around 6%. Europe, by contrast, is expected to expand more slowly, relying on recycling, secondary supply, and policy frameworks rather than new large-scale mining projects. Rare earths are increasingly central to geopolitical competition, as nations race to secure supply chains for military and clean technology applications. By 2030, demand for key elements such as neodymium, praseodymium, dysprosium, and terbium—essential for high-performance magnets—is expected to more than double.

Despite these opportunities, significant risks remain. Europe is vulnerable to supply shocks due to its limited domestic mining and refining capacity. Asia faces geopolitical risks stemming from its over-reliance on China, which could destabilize regional supply chains. Globally, environmental concerns and slow permitting processes threaten to hinder the development of new projects. These challenges underscore the delicate balance between growing demand, strategic competition, and the need for sustainable resource management.New Paragraph