Brussels, 13 November 2023
The Council and the European Parliament today reached a deal on the proposed regulation establishing a framework to ensure a secure and sustainable supply of critical raw materials, better known as the Critical Raw Materials Act. The agreement is provisional, pending formal adoption in both institutions.
The political agreement reached today keeps the overall objectives of the original proposal but strengthens several elements. It includes aluminium in the list of strategic and critical materials, reinforces the benchmark of recycling, clarifies the permitting procedure for strategic projects, and requires relevant companies to perform a supply-chain risk assessment on their sourcing of strategic raw materials.
Today’s agreement lays the foundation of Europe’s strategic autonomy. Our dependency on raw materials is the Achilles’ heel of our competitiveness, but with the Critical Raw Material Act we can turn this weakness into strength. We can create a truly European extracting sector; we can turn our waste into a resource; we can build closer ties to third countries and we can secure the life-line of our industry in a truly sustainable way.
Teresa Ribera Rodríguez,
acting Spanish minister for ecological transition
Ensuring the supply of raw materials locally and globally
The Commission’s proposed regulation establishes a list of 34 critical raw materials (including 16 strategic ones) and sets targets to increase the EU contribution of these substances (10% for the extraction; 40% for the processing and 15% for the recycling). To achieve this, the proposal called for a quick and simplified permit procedure for strategic extracting projects, to be dealt by a single national contact point. It also called for risk analysis of possible dependencies, member states’ exploration plans, higher investment in research, innovation and skills; and protection of the environment by promoting the circularity and sustainability of raw materials.
On the global stage, the regulation identified measures to diversify imports of critical raw materials ensuring that not more than 65% of the Union’s consumption of each strategic raw material comes from a single third country.
Main elements of the agreement
The provisional agreement adds one critical raw material (aluminium) to the list of strategic raw materials (hence, 34 critical raw materials and 17 strategic raw materials). The compromise text also considers that in addition to the natural graphite (which already in the list) the synthetic graphite will also be a strategic raw material during a period of three years, until the Commission makes the first revision of the list.
Furthermore, the agreement allows that projects able to produce innovative raw materials that substitute strategic raw materials in relevant technologies can be candidates to become strategic projects
Member states will have the possibility to object on whether a project will be developed in their member states.
Realistic benchmarks
The provisional agreement keeps the benchmarks of 10% for extraction of raw materials and 40% for processing but increases the benchmark for recycling to at least 25% of EU’s annual consumption of raw materials. In addition, there should be substantial increase on the recovery of raw materials present in waste.
Promoting technologies to moderate consumption
The co-legislators propose that 18 months after the entry into force of the regulation, the Commission shall present a report on the estimated consumption of each critical raw material for the next three decades.
Points of single contact
According to the different administrative systems of each country, member states will be able to designate one or several “Points of single contact”, at the level they decide (local, regional or national) and the different stages of the value chain (mining, processing, recycling). Promoters of strategic projects will have a “relevant administrative unit” in these points of single contact who will facilitate the permit granting process for the project.
Permitting procedure
The provisional compromise also unifies the timings of the permit procedure. The total duration of the permit granting process should not exceed 27 months for extraction projects and 15 months for processing and recycling projects. While the first step of the environmental impact assessment (the production of the report, which must be conducted by the project promoter) will be not included in the time-line for the project approval, the public consultation needed for an environmental impact assessment will be part of the total duration of the permit process.
Company risk preparedness
Large companies exposed to shortages of strategic raw materials in strategic technologies (i.e. battery manufacturers, hydrogen producers, renewable energy generators, data transmission and storage, or aircraft production) will have to regularly carry out a risk assessment of their supply chain of strategic raw materials, which they may present to their board of directors, mapping where the materials come from, what can affect their supply and what are the vulnerabilities to supply disruptions.
Infographic – An EU critical raw materials act for the future of EU supply chains: See full infographic
Background
The Critical Raw Material Act, together with the Net Zero Industry Act and the Reform of the electricity market design is one of the flagship legislative initiatives of the Green Deal Industrial Plan that the Commission presented on 1st February 2023. The three were presented as a package on 16th March. The Council adopted the negotiation mandate on 30th of June.
Next steps
The provisional agreement reached with the European Parliament now needs to be endorsed and formally adopted by both institutions.
Source – EU Council
EU Parliament background: Critical raw materials: deal on securing the EU’s supply and sovereignty
- Strategic partnerships with third countries on critical raw materials
- Cutting red tape, boosting innovation and developing alternative materials
- Enhanced circularity and ambitious recycling goals
MEPs and the Spanish presidency of the Council agreed on plans to boost the supply of strategic raw materials, on Monday.
The Critical Raw Materials Act is intended to make the EU more competitive and sovereign. It aims to cut red tape, promote innovation along the entire value chain, support SMEs and boost research and the development of alternative materials and more environmentally-friendly mining and production methods.
The legislation will set up economic incentives and a more stable and secure business framework for the deployment of mining and recycling projects, with faster and simpler authorisation procedures.
Strategic Partnerships
During negotiations, MEPs highlighted the importance of securing strategic partnerships between the EU and third countries on critical raw materials, in order to diversify the EU’s supply, with benefits for all sides. They secured measures to pave the way for long-term partnerships with knowledge- and technology-transfer, training and upskilling for new jobs with better working and income conditions, as well as extraction and processing on the best ecological standards in partner countries.
MEPs also pushed for a stronger focus on research and innovation concerning substitute materials and production processes that could replace raw materials in strategic technologies. They secured the establishment of circularity targets to foster the extraction of more strategic raw materials from waste products. MEPs also insist on the need to cut red tape for companies, in particular small and medium-sized enterprises (SMEs).
Quote
Lead MEP Nicola Beer (Renew, DE) said:
“The agreement is an industrial policy blueprint for a secure and sustainable supply of raw materials in Europe. With targeted economic incentives, we are creating project-planning certainty for private investors – through single points of contact for companies and fast and simple authorisation procedures with clear deadlines for national authorities. This will boost mining, processing and recycling in Europe”.
“At the same time, we are stimulating research and innovation along the entire value chain. A framework for strategic partnerships on raw materials with third countries on equal terms will also make the EU an attractive partner in geopolitical competition – with real benefits for both sides and strong protection for local communities and nature. With a clear signature from the EU Parliament, the course has been set for Europe’s open, economic and geopolitical sovereignty” she added.
Next steps
The informal agreement now needs to be approved by both Parliament and Council in order to become law. It will be put to a vote in the Industry, Research and Energy committee on the 7th of December.
Background
Electric cars, solar panels and smartphones – all of them contain critical raw materials. For now, the EU is dependent on certain raw materials. Critical raw materials are pivotal for the EU’s green and digital transitions, and securing their supply is crucial for the European Union’s economic resilience, technological leadership, and strategic autonomy. Since the Russian war against Ukraine and an increasingly aggressive Chinese trade and industrial policy, cobalt, lithium and other raw materials have also become a geopolitical factor.
With the global shift towards renewable energies and the digitisation of economies and societies, the demand for these strategic raw materials is set to rapidly increase in coming decades.
Renew Europe on the Critical Raw Materials Act: deal significantly paves the way for European Industrial Sovereignty
The Renew Europe Group welcomes today´s interinstitutional agreement on the Critical Raw Materials Act (CRMA). It aims to tackle the EU’s access to secure, diversified, affordable and sustainable supplies, enabling Europe to pursue its twin climate and digital transition and ensure its open strategic autonomy.
The final agreement strengthens EU resilience, reduces our dependencies on materials used for strategic technologies and thereby lays strong foundations to accelerate towards more European sovereignty and competitiveness, crucial given the current geopolitical upheavals.
MEP Nicola Beer (FDP, Germany), Vice-President of the European Parliament and Rapporteur on the Critical Raw Materials Act, states:
“The agreement, which has been reached in record time, is an industrial policy blueprint for a secure and sustainable supply of raw materials in Europe. The European Parliament has successfully pushed for fewer reporting requirements, especially for SMEs, and more European raw materials projects in Europe. With targeted economic incentives, we are creating project-planning certainty for private investors – through single points of contact for companies and fast and simple authorisation procedures with clear deadlines for national authorities. This will boost mining, processing and recycling in Europe. At the same time, we are stimulating research and innovation along the entire value chain. A framework for strategic partnerships on raw materials with third countries on equal terms will also make the EU an attractive partner in geopolitical competition – with real benefits for both sides and strong protection for local communities and nature. With a clear signature from the EU Parliament, the course has been set for Europe’s open, economic and geopolitical sovereignty”.