After months of deliberations, the European Parliament voted in the second week of December 2023 to adopt the Critical Raw Materials Act.
The key aim of this legislation, aside from reducing the EU’s overdependence on imported raw materials key to strategic industries, such as energy transition and transport, is to co-ordinate action on raw materials supply among EU member states, so that diverging laws, regulations and investment strategies do not distort its internal market. It opens the door to a collective waste recycling policy and a joint purchasing system for strategic raw materials among EU member states.
It also opens up support to not only EU domestic projects to boost the supply of raw material deemed strategic (i.e. used in strategic industries such as renewable energy of defence) or critical (i.e. at risk of supply disruption), or to technology projects to substitute less available materials, but also to enable such investment in partner third countries. Such overseas projects could be eligible for EU investment under the CRM Act, so long a the projects fall within its framework and meets the EU’s social, environmental and transparency criteria, including for meaningful consultation with and potential compensation of indigenous communities affected, adherence to labour rights and prevention of forced and child labour.
Some notable points include cutting the EU’s own red tape, so that the time from application to decision on granting a permit to a strategic project that involves only processing and recycling, rather than mining, should be no longer than 15 months. For mining projects that timescale would be 27 months, including environmental impact assessments.
Notably, also there is a precautionary principle approach to deep sea mining. Under the CRM Act, the European Commission
cannot grant the strategic status to a deep sea mining project before the effects of deep-sea mining on the marine environment, biodiversity and human activities have been sufficiently researched, the risks are understood and technologies and operational practices are able to demonstrate that the environment is not seriously harmed”.
The legislation in its final form recognises the reality that the EU cannot meet its own raw material demand on its own. But while it acknowledges the need to import, it aims for no single country to account for more than 65% of any given strategic raw material to come from a single country by 2030. This is something of a challenge, given that China – not expressly mentioned in the text – accounts for most of global supply of magnetic rare earths and much of the battery raw materials, not only metallic ones but also graphite, key to anode production.
By 2030, under the CRM Act, the EU aims to expand its capacity to mine at least 10%, process at least 40% and recover from recycling at least 25% of its annual consumption of strategic raw materials. It also aims to diversify the EU supply chain from third party countries so that no single non-EU country provides more than 65% of the EU’s annual consumption of each strategic raw material. The raw materials defined as strategic are:
- Boron – metallurgy grade
- Lithium – battery grade
- Magnesium metal
- Manganese – battery grade
- Graphite – battery grade
- Nickel – battery grade
- Platinum Group Metals (PGMs)
- Rare Earth Elements for magnets (Nd, Pr, Tb, Dy, Gd, Sm, and Ce)
- Silicon metal
- Titanium metal
Looking beyond 2030, the CRM Act empowers the European Commission to “evaluate the need for benchmarks targeting 2040 and 2050 and for individual strategic raw materials, the consistency between the Union environmental legislation and this regulation, in particular in relation to the priority status of the strategic projects, the impact of the Joint purchasing system set up pursuant to Article 25 on competition in the internal market and the appropriateness of establishing further measures to increase the collection, sorting and processing of waste, in particular with a view to metal scraps.”
You can read the full text of the CRM Act as adopted on 12th December 2023 HERE