Ensuring the EU’s long-term access to raw materials

The Critical Raw Materials Act is intended to ensure the EU's access to a secure, affordable and sustainable supply of critical raw materials while reducing its dependence on third countries. The European Parliament’s Committee on Industry, Research and Energy (ITRE) will vote on the proposed legislation today. Dr Johannes Betz explains the positive and negative features of the Act.

The Critical Raw Materials Act (CRMA) sets benchmarks for the EU’s domestic capacities for extraction, processing and recycling of critical raw materials, based on the EU’s overall consumption. The targets are to be reached by 2030. By that date, at least 10% of the EU's annual consumption of critical raw materials should come from its own extraction capacity; the figures for processing and recycling are 40% and now 25%, respectively. Also by 2030, not more than 65% of the Union's annual consumption of each strategic raw material should be sourced from a single third country. Among other things, this aims to reduce dependence on individual countries.

At present, 100% of the EU’s supply of heavy rare earths such as terbium and dysprosium – which are used in electric motors, for example – are sourced from China.

The Act identifies a list of 34 critical raw materials and 17 strategic raw materials. They include resources that are required in the production of lithium-ion batteries for e-mobility, as well as raw materials that are needed in the renewable energy sector or in microelectronic chips. Lithium, cobalt and rare earths are examples of strategic raw materials.

Streamlining the permit-granting process

The CRMA also establishes “approval by default” whereby an application will automatically be regarded as approved if the competent authority has not issued a comprehensive decision on the matter by the applicable time limit. This is intended to significantly expedite permit procedures. At present, these procedures can take 10 years or more in some cases; however, in future, decisions on the issuing of extraction permits should be taken within 27 months in order to shorten the timeframe between the discovery of a deposit and the start of mining. The timeframe for the issuing of processing and recycling permits will be just 15 months. The reductions particularly affect the timeframe for consulting the public, which must not exceed 90 days; they also limit the scope for national authorities to delay Strategic Projects in future for reasons such as a lack of personnel. According to environmental groups, reduced scope for environmental assessment may result in failure to identify possible ecological impacts, with potentially serious repercussions later on.

Stress tests will be performed every three years to identify possible supply chain issues at an early stage. These tests will be conducted by Member States or the European Commission itself. Large companies will be required to perform audits of their supply chains; this process will cover trade flows; demand and supply; concentration of supply; Union production and production capacities; and the different stages of the value chain worldwide. Member States are also required to build up stocks of some critical raw materials.

Social and environmental standards are neglected

One weakness of the CRMA concerns social and environmental standards. The legislation does not initially include any specific provisions relating to the international market; instead, there is a reliance on the provisions being developed in parallel in the EU Corporate Sustainability Due Diligence Directive. Participation in “industry schemes” is deemed sufficient to fulfil these provisions, despite the lack of equivalence between these schemes. Only robust standards with multi-stakeholder governance and transparent and independent audits based on site visits and site-specific checks, such as the Initiative for Responsible Mining Assurance (IRMA), should qualify for consideration here.

The proposed Strategic Partnerships with other resource-rich countries must be based on equality. This means that local communities in partner countries should benefit from the partnership, with sustainable improvements in their living standards. Regrettably, the rights of indigenous populations in resource-rich countries are not mentioned in the Act and the long-term protection of these communities is not advanced by the proposed law. As European environmental and social standards are not applicable in these countries, this could lead to leakage of environmental impacts and social problems. Given that a significant proportion of raw materials will still have to be sourced from countries outside the EU, this is a missed opportunity to embed responsible human and environmental standards in this legislation.

Ambitious targets

Overall, the benchmarks set for increased supply chain resilience reflect a high level of ambition. Apart from the maximum quantity that may be sourced from a single third country, they apply to all strategic raw materials. Specific resources are prioritised in this change of direction, with far more significance attached to raw materials that are defined as strategic, such as aluminium, compared to rare earths. The Act establishes a framework and maps out the future direction of travel. Decisive measures will be required to meet the targets, but these measures are still largely undefined or do not form part of the CRMA. Details of the financial resources that must be invested in reaching the targets are still lacking as well.

Target-setting is welcome in principle. However, negative environmental impacts around mining in the EU must be avoided, and this aspect must certainly be considered in the final version of the legislation and, above all, in its implementation by the Commission and the Member States.

Dr Johannes Betz is a Senior Researcher in the Resources and Transport Division at the Oeko-Institut’s Darmstadt office. He works on critical raw materials and supply security.

Further information


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