EU Critical Raw Materials Bill Unveiled

by | 16. Mar 2023 - 14:39 | Politics

Access to critical raw materials crucial for competitiveness. Draft Critical Raw Materials Act does not go far enough for associations.

The European Commission on Thursday presented a proposal for a European law on critical raw materials. The European Critical Raw Materials Act is intended to address the limited diversification of critical materials supply chains to date. The EU sources 98 percent of its rare earths supply and 93 percent of its magnesium from China, Commission President Ursula von der Leyen told the European Parliament the previous day. Accordingly, the community of nations is vulnerable to shortages in this area.

As already leaked out in advance, the Commission is therefore aiming for ten percent of the annual demand for strategic raw materials to be covered by its own production, currently three percent, said Thierry Bretton, EU Commissioner for Internal Market and Services at the press conference. 40 percent of the annual demand should be processed in the EU. The recycling of critical resources also needs to be expanded, because currently only 12 percent is returned to industry, Breton said. In addition, only 65 percent of a given raw material may come from a single third country to counteract the high country concentration.
The EU’s plan for greater independence is flanked by a whole series of other measures. These range from raw material partnerships and the acceleration of approval procedures for relevant projects to the monitoring of raw material supplies and stress tests on the corresponding supply chains.

Associations already voicing criticism

The regulation must be discussed and approved by the European Parliament and the Council of the European Union before it is adopted and enters into force, so there is already criticism from associations, such as the Federation of German Industries (BDI), which says the draft does not go far enough. According to Wolfgang Niedermark, a member of the BDI’s executive board, the necessary instruments for successful implementation of the plan are lacking, in particular a financing offensive for raw materials extraction and processing. Meanwhile, the German Association of the Automotive Industry (VDA) speaks of a missed opportunity for the EU to “demonstrate strength and influence through unity and joint action.” Rather, it says, there is a threat of new competition among the member states if responsibility for financing strategic projects does not lie at the EU level. Criticism also comes from the German Electrical and Digital Manufacturers’ Association (ZVEI). It said the draft “falls well short of its potential,” especially when it comes to establishing a circular economy for critical raw materials.

Net-Zero Industry Act to promote green industry

The Net-Zero Industry Act was also presented on Thursday. This provides for the EU to be able to produce 40 percent of the technology for the transition to climate neutrality itself by 2030. The legislation focuses on easing permitting procedures. As in the case of the supply of rare earths and other critical raw materials, Europe is heavily dependent on imports, particularly from China, for solar cells, for example. No wind energy without rare earths, stated EU Commissioner Bretton on Thursday.

Photo: iStock/DutchScenery

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