Stretched Supply Chains
Risks exist along each step of the supply chain
Stakeholders can act to minimize supply chain risks – and seize the opportunities
Potential actions for businesses
The right next steps will vary by the type and the specifics of individual businesses, but the following resilience-boosting actions can be beneficial to businesses along the supply chain:
- Diversify and localize supply chains for critical raw materials and components across multiple suppliers and geographies.
- Explore opportunities for cross-industry pooled procurement of raw materials.
- Invest in recycling, innovation, and research around substitutes for critical materials.
- Explore opportunities for vertical integration to secure critical raw materials and decrease price volatility, either through alliances and partnerships or through targeted acquisitions.
- Optimize procurement strategies by targeting long-term supply agreements or developing streaming agreements with advance lump-sum payments for future production.
- Send clear demand signals via long-term target and volume commitments, such as by announcing target developments in offshore wind to drive the upgrade of vessels.
- Attract and retain workers from the European Union and beyond by conducting early outreach in schools and offering targeted reskilling programs.
- Reduce labor demand through automation and digitalization.
Potential actions for other stakeholders
Other stakeholders could consider the following actions:
- Scale up regional supply chains to a critical minimum; for example, use incentives (including both taxes and subsidies) or insert sustainability and local content criteria into tenders and policies.
- Encourage innovation, including around substitutes for critical and scarce raw materials.
- Harmonize regulations and streamline permitting processes.
- Introduce intra-European Union alliances to source strategic raw materials, including rare-earth materials.
- Increase OEM recycling of raw materials such as aluminum, lithium, and cobalt by creating financial incentives and setting standards regarding higher levels of reuse.
- Communicate and commit on growth plans to build the confidence that will allow businesses to make proactive investments.
- Invest in labor programs for blue-collar energy transition jobs focused on metallurgy and RES manufacturing capabilities. Programs could include skilling and reskilling while also facilitating international and cross-sector utilization.
- Attract and retain workers from the European Union and beyond—for example, by facilitating migration, activating passive workforce segments, and ensuring a predictable and steady project pipeline.