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Critical Raw Materials Act
The Critical Raw Materials Act is a regulation proposed by the Commission on the 16th March 2023, with the aim to set the basis for a renewed European approach to the use of key materials, focusing on the extraction, processing, recycling, monitoring and diversification of critical ores, minerals and concentrates, while strengthening its international outreach to current and future partners. In November 2023, the co-legislators came to an agreement regarding the final regulation.
The Act targets several issues related to critical raw materials, such as low diversification of EU supply sources, the untapped potential of local supply, weak monitoring and risk management capacity to anticipate and prevent supply disruptions of critical raw materials, adverse social and environmental impacts of production of CRMs, insufficient support for circularity and insufficient research and innovation.
The key targets in the proposed regulation are:
- To strengthen the EU’s capacities along the different stages of the value chain. Ensuring that by 2030:
- EU extraction capacity covers at least 10% of the EU's annual consumption of strategic raw materials;
- EU processing capacity covers at least 40% of the EU's annual consumption of strategic raw materials;
- EU recycling capacity covers at least 25% of the EU's annual consumption of strategic raw materials.
- To diversify the EU’s imports of raw materials, where no third country should provide more than 65% of the EU's annual consumption (for each strategic raw material).
Furthermore, the CRMA includes he establishment of a two-tier criticality list of materials: 17 Strategic (SRMs, highest priority for the clean transition) and further 17 Critical (CRMs, other raw materials with considerable economic importance and supply risk, mild level of disruption). The text provides for further Commission revision of this list in three years.
The possibility of granting the status of Strategic Projects to those with a demonstrated ability to bring meaningful contribution to EU security of supply of SRMs, a certain degree of technical feasibility and proof of sustainability practices. These Strategic Projects are to be treated as a matter of priority in their respective Member States, with quicker and streamlined permitting procedures. With proposed timelines for approval not exceeding 15 months for processing and recycling projects, and 27 months for extraction projects in Europe, according to the priority status.
Large companies exposes to potential shortages of strategic raw materials in key technologies, such as batteries or hydrogen producers will have to regularly carry out risk assessment of their supply chain regarding their strategic raw materials, including reference to vulnerabilities to supply chain disruptions.
In case of urgency and disruption of the international market, the EU would be able to organise Joint Purchases on behalf of European undertakings. The overall process to be managed by a CRM Board, which would be a joint institution composed of representatives from Members States and the Commission (chair). The Board would advise and support Commission and Member States in relation to their actions to improve the security of the Union’s supply of critical raw materials.
What’s in it for hydrogen?
Hydrogen technologies such as electrolysers and fuel cells are dependent on CRMs, thus their availability and future price will be a crucial aspect affecting the speed at which the hydrogen market can grow. Certain technologies are heavily dependent on Platinum Group Metals (PGMs, such as platinum and iridium), which are fundamental for the manufacturing of key components like membranes and stacks. PGMs may represent a bottleneck for EU supply chain as they are concentrated in specific geographies (e.g. South Africa, Russia) and are extremely scarce.
Europe’s goal to produce 10 Mtons of renewable hydrogen by 2030 will require more than 100GW of electrolysers capacity by 2030. This will increase demand for platinum group metals (e.g., platinum, iridium) and other base metals such as nickel and copper that may be subjected to shortages and price spikes due to competition with other clean tech sectors (electric motors, batteries, photovoltaic, wind…).
The EU’s Critical Raw Materials Act establishes synergy with the other pivotal elements of the Green Deal Industrial Plan, such as the Net-Zero Industry Act (NZIA). The package awards hydrogen and its related technologies, components and materials, the status of strategic importance for Europe’s competitiveness, energy security and resilience, in the path towards a net-zero economy.
Links to the original document and additional information:
European Parliament Legislative Observatory: Framework for ensuring a secure and sustainable supply of critical raw materials
European Critical Raw Materials Act Proposal
