Tue. Jun 25th, 2024

29 January 2022

On 31 January and 1 February 2022, the French Presidency of the Council of the European Union will bring together the EU’s 27 Industry and Internal Market Ministers in Lens, France, to discuss how Europe can strengthen its strategic autonomy by identifying and reducing the vulnerabilities that affect the region. The meeting will focus in particular on securing the supply of raw materials for European industry.

In the short term, supply problems impact production conditions, schedules and costs, while also putting a drag on Europe’s competitiveness and putting at stake businesses and jobs. In the long term, they pose a threat to our ability to green and digitalise our economy, respond to crises and develop sectors key to the future, including renewable energy, electric mobility, healthcare, and cloud and 5G infrastructure.

For example, today Europe relies heavily on Asia for active pharmaceutical ingredients, importing 80% of such products, and optical fibre cables (China produces 25% of the world’s supply), among others. Raw materials, however, represent our most critical vulnerability: China currently ensures 60% of the global supply of rare-earth elements and meets 98% of Europe’s demand for these materials, which are essential components used in producing electronics and renewable energy.

In its May 2021 Industrial Strategy update, the European Commission identified a list of 137 products that put Europe in a vulnerable position. They mainly concern sectors such as healthcare, defence and digital technology. The European Commission should present the results of its analysis of the EU’s strategic dependencies with the publication of its Annual Single Market Report in the first quarter of 2022.
The EU has already taken tangible steps to strengthen its autonomy in strategic sectors by:

  • Launching transformative industrial projects at EU level: In 2019, Member States began undertaking Important Projects of Common European Interest (IPCEIs) in areas like electric vehicle batteries and microelectronics, and are working on new IPCEIs on hydrogen, cloud computing, electronics and connectivity, and healthcare.
  • Improving our crisis-response capabilities: The EU created the European Health Emergency Preparedness and Response Authority (HERA) to foster research and innovation for critical medical products.
  • Rolling out new funding programmes: The €750bn NextGenEU recovery plan provides support to a number of critical industrial ecosystems. For one, it plays a central role in the France Relance recovery plan, which provides funding for decarbonising and digitising industry, while propping up our most critical sectors.
  • Expanding European industry in a fair competitive environment: Trade defence instruments (TDIs) shield Member States from unfair trade practices used by non-EU countries when exporting key inputs like steel. The EU established in October 2020 of a framework for the screening of foreign direct investments (FDIs) which has improved the Union’s ability to monitor investments made by non-EU countries. Lastly, the May 2021 proposal for a regulation on foreign subsidies distorting the internal market seeks to remedy the distortions caused by subsidies granted by non-EU governments to their firms.

Maroš Šefčovič, Vice-President for Inter-institutional Relations and Foresight at the European Commission, and Thierry Breton, Commissioner for the Internal Market, will present the Commission’s work on strengthening the Union’s strategic autonomy, a goal which is at the heart of the May 2021 EU Industrial Strategy update.

EU Ministers and Commissioners will meet for a series of events, including:

  • A plenary discussion on strengthening Europe’s strategic autonomy and which will allow us to:
    • agree on a clear course of action for reducing our vulnerabilities and take stock of the EU’s efforts to reduce the region’s dependencies, under way since March 2020 aimed at decreasing ;
    • consider alternative steps that can be taken to reduce these dependencies, such as the upcoming EU Chips Act, which seeks to increase our semiconductor production capacity;
    • address the issue of securing and sustaining the EU’s supply of raw materials;
  • A working lunch with Philippe Varin, former Chair of France Industrie, who will provide an overview of the issue of raw material access and discuss what the EU can do to secure its supply, building on the report submitted to the French government on 10 January 2022;
  • Three breakout sessions which will further explore:
  1. what action can be taken to secure the supply of non-EU raw materials while remaining in compliance with labour and environmental standards;
  2. what benefits can be derived from the circular economy, innovation and less intensive consumption patterns in order to reduce our reliance on raw materials;
  3. how the Union can increase its domestic production of raw materials and what requirements must be met on the labour and environmental front.
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