Italy’s Iren SpA will build plants to recycle rare metals, as part of the country’s broader effort to cut dependency from China for the supply of minerals that are crucial for the energy transition and for digitization.

“It’s a highly strategic sector both for us and for Italy, which is totally dependent from abroad,” the utility’s chairman, Luca Dal Fabbro, said in an interview. “By 2040, Italy could meet as much as 30% of its need of rare metals through recycling.”

The European Union and the US want to challenge China’s undisputed leadership in the extraction, refining and delivery of “critical minerals” used in clean technologies such as electric vehicle batteries and solar panels. The EU in March launched a Critical Raw Materials Act with the aim of easing financing and permitting for new mining and refining projects.

Iren plans to invest more than €10 million ($10.8 million) to build a new site to recover gold and palladium, and another one to recycle solar panels. The utility, which is is based in the Emilia-Romagna region and manages gas, electricity and water services, is already recycling metals from old television sets and monitors in a plant in northern Italy.

Italy’s need for 17 metals including copper, silica and lithium may increase as much as five times in the next decade from 2,782 tons in 2020, according to a paper by think thank The European House-Ambrosetti and Iren. China is by far the largest  supplier of components for data storage units and servers, as well as for drones construction, the study says.

“It’s a matter of giving crucial support to the Italian industrial supply chain, which relies heavily on raw materials for its day-by-day functioning,” Dal Fabbro said. “Not acting on now securing a national supply would be a crucial mistake,” he added.

Overall, Italy will need 7 new plants to reach an annual recycling capacity of 105,000 tons by 2040 and meet a European Union target of reusing 15% of its rare metals, according to the Ambrosetti study, for an investment of about €336 million.