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The Critical Raw Materials Act was only passed towards the end of the last parliamentary term and is still in its infancy. Will the new European Parliament and European Commission continue to work to reduce the EU’s reliance on the building blocks of the green economy?
In March this year, the EU adopted a landmark Critical Raw Materials ActThis was one of the last pieces of legislation to be formally adopted by the end of the 2019-2024 term. Since then, the results of the European Parliament elections have been significant. The political spectrum shifts to the right.
With much of the entire critical raw materials strategy yet to be implemented, what should the EU do next to reduce its dependence on this cornerstone of the modern economy?
The first plenary session of the European Parliament for the 2024-2029 term was held in Strasbourg, and appointment hearings for commissioners nominated by the 27 EU member states will begin in September.
By November, the composition of the new committee will be announced and its priorities will be spelled out during confirmation hearings. MEPs call on the Commission to start implementing the strategy.
One of the main areas where the new Parliament and Commission terms are likely to have an impact on the EU Critical Raw Materials Directive is in the prioritization of the identification and classification of critical raw materials. Parliament determines which materials are considered critical based on factors such as economic importance, supply risk and strategic significance.
Changes in the composition of Parliament after the elections could lead to changes in the list of critical raw materials and adjustments to EU policies to promote responsible sourcing and sustainable use.
Currently, there are 34 materials on the list, including 17 strategic raw materials (SRMs). The latter category includes materials whose demand is expected to grow exponentially, which have complex production requirements and are therefore at higher risk of supply issues. Which materials will be included on the list and which will be designated as SRMs is a controversial process that will still be subject to more debate.
For example, the interim agreement reached between the Council and Parliament added aluminum to the list of minerals and metals covered by the CRMA. This metal and its upstream raw materials bauxite and alumina were included at the last minute because of their applications in clean technologies. Currently, materials designated as SRMs include lithium, silicon metal, gallium, manganese and cobalt.
Using Lists
Now that the list has been adopted, companies in the raw materials sector have been pushing for its use. Guy Thiran, director general of Eurometaux, the European metals industry association, said: “We have more than 70 projects in the pipeline to meet the 2030 benchmarks of the code, from mining to processing to recycling.”
“Europe faces a two-year challenge to translate these ambitions into final investment decisions amid fierce global competition. This requires fast-tracked local licensing, a dedicated EU fund for critical raw materials, and improvements in European competitiveness across the board – from energy prices to regulatory burdens,” Thielan said.
Electric vehicles drive demand
Electric vehicles are expected to increase demand for currently scarce materials in the EU. For example, lithium demand in the EU is expected to increase 12-fold by 2030.
As it stands, the EU cannot meet this demand without significantly increasing imports, thereby increasing its dependence on the rest of the world. The International Energy Agency (IEA) estimates that global energy sector demand for critical minerals could increase fourfold by 2040.
To meet growing demand, the International Energy Agency estimates that 388 new mines will need to be opened by 2030.
There is strong skepticism within the European Parliament about new mines, which are seen as potentially damaging to the environment, but the new right-wing parliament may have a different view of mining.
Furthermore, the election results could affect the implementation of measures aimed at reducing the EU’s dependence on external sources of critical raw materials, especially metals.
Parliament’s decisions on issues such as recycling targets, resource efficiency standards and trade policy will have a direct impact on the EU’s efforts to diversify supply chains, promote domestic extraction and processing, and develop a circular economy for critical raw materials.
Raw materials trade concerns
Another area that will affect critical raw materials is trade, and one that the new Parliament and Commission are likely to have a significant impact on. The Commission negotiates trade deals with third countries, and these must be approved by the European Parliament and national governments.
There are concerns that the European Commission’s recent negotiations are not fully aligned with the objectives of the Critical Raw Materials Directive. The European Metalworking Industry Association has written to the European Commission to express this concern. “This inconsistency could undermine the existing production of strategic raw materials in Europe,” they said in a position paper.
They recommend that the new Commission adopt a tailored approach to tariff liberalisation and pay close attention to the EU’s existing industrial capacities for strategic and critical raw materials when negotiating trade agreements with third countries. “To realise the full potential of future free trade agreements, a tailored approach to the raw materials prioritised under the Critical Raw Materials Act is needed in trade negotiations,” they said.
Eurometaux added: “The Commission should differentiate between critical raw materials, for which the main objective is to protect existing manufacturing in Europe, and raw materials for which the EU currently lacks sufficient industrial capacity.”
Carbon neutral industry
Citing the EU-India Free Trade Agreement as an example, they said opening the EU market to duty-free Indian aluminium would hamper the bloc’s goal of a carbon-neutral industry and undermine its efforts to promote higher sustainability standards.
The industry also wants to see stricter rules of origin for metal products, as relaxing them could disrupt metal producers and recyclers in the EU. They also called on the Commission to prioritize the inclusion of clear sustainability criteria in new free trade agreements.
Looking ahead, the challenge for the EU is to balance its desire to ensure access to critical raw materials with its commitment to environmental sustainability, social responsibility and international cooperation.
After the European Parliament elections, the EU needs to continue working towards a comprehensive raw materials policy approach that combines economic competitiveness with environmental protection and social welfare.
(Author: Dave Keating I Editor: Brian Maguire | Euractiv Promotional Lab ）
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