In March 2023, the EU Commission proposed a package of measures on critical raw materials. The aim is to secure supplies in the future. As the EU is heavily dependent on imports in this area, strategic risks along the value chain are to be reduced. The EU Commission assumes strong increases in consumption. A current AK EUROPA position paper demands that more attention has to be paid to the consequences of massive encroachments on nature and negative impacts on the local population.
In March 2023, the EU Commission proposed a package of measures on critical raw materials. The aim is to secure supplies in the future. As the EU is heavily dependent on imports in this area, strategic risks along the value chain are to be reduced. The EU Commission assumes strong increases in consumption. A current AK position paper demands that more attention has to be paid to the consequences of massive encroachments on nature and negative impacts on the local population.
In the proposal the EU Commission distinguishes for the first time between critical and strategic raw materials, which are specified in a list. Critical raw materials are characterised by a high supply risk. Strategic raw materials are necessary for strategic areas such as defence or digitalisation. The Covid-19 pandemic and the war of aggression on Ukraine have once again highlighted the dangers posed by shortages and the need for action. Strategic raw materials are also crucial for achieving the climate targets.
EU Commission assumes strong increase in consumption of critical raw materials
In addition, the Commission defines benchmarks for EU capacities along the supply chain. By 2030, 10 per cent of European consumption of strategic raw materials is to be covered by domestic extraction, 40 per cent by domestic processing and 15 per cent from recycling. The planned strengthening of European capacities in mining and processing is to be welcomed. However, due to the focus on security of supply in the EU and the minimisation of strategic risks, the proposal does not do justice to the problem of global raw material shortages. The fair distribution of these raw materials and their efficient use have not been addressed.
The recycling plans are also not ambitious enough. More important than the overarching goal of obtaining 15 per cent of critical raw materials from recycling would be concrete and binding recycling targets. Raw materials that already have a high recycling share should achieve even higher shares. Overall, there should be a focus on research and development in the areas of resource efficiency, recycling and substitution of critical raw materials. Accompanying labour market and education policy targets would also be necessary for the development of a European circular economy.
Strategic projects for more extraction of raw materials within the Union
In order to rapidly expand mining and processing in the Union, it should be possible in future to define strategic projects for which simplified approval procedures apply. These projects should also receive financial support. From AK’s point of view it must be ensured that any form of aid is linked to the fulfilment of social conditionalities. Companies violating labour or social provisions should be excluded from subsidies.
In contrast, the planned time limit for approval procedures threatens to undermine the participation of local communities and the public and the influence of important actors. According to AK’s assessment, giving preference to strategic projects will lead to a large number of project applicants seeking this status, while a new category of approval procedures will quickly lead to complications for many in the practical implementation.
Since the legal act is in the form of a regulation, it is directly and fully binding on all Member States once it comes into force. This eliminates the possibility of coordinating the requirements with national legislation. This can lead to legal uncertainties and thus quickly overload the authorities. Hence, in AK’s opinion, an enactment in the form of a Directive would make more sense.
A Raw Materials Board is to accompany the strategic projects and their funding. However, according to the proposal, this board will be composed primarily of the EU Commission and the Member States, and stakeholders can also be involved. Trade unions are not explicitly mentioned in the draft regulation. AK, on the other hand, in order to ensure that compliance with labour and human rights as well as environmental risks can be well assessed and taken into account, demands a structural involvement of trade unions and civil society.
International engagement and the North-South divide
The EU Commission's proposal also envisages diversifying imports of critical raw materials through international engagement and thus securing supplies. This includes the expansion of trade relations with countries rich in raw materials. The further increase in the Union's high consumption of raw materials will further intensify global competition for raw materials. The plan to crack down on export restrictions by resource-rich countries is particularly problematic. Making it more difficult for countries to build up their domestic industries contributes to the further entrenchment of unequal trade and production structures.
While the massive interference with nature in the course of raw material extraction tends to increase negative environmental impacts, the increasing pressure will hardly improve the situation of the workers involved in raw material extraction. Exploitative and unhealthy working conditions are particularly widespread in mining. It would therefore be desirable to give greater consideration to reducing the consumption of raw materials and increasing energy and material efficiency in order to curb the negative consequences.
What happens next?
At the beginning of September, the responsible European Parliament’s Committee on Industry, Research and Energy (ITRE) adopted its report and introduced important amendments. For example, raw material consumption is to be reduced compared to the reference scenario and communities affected by raw material extraction are to be more involved. Overall, the sustainability and circularity requirements have been strengthened. The Council too has already defined its position. Among other things, the targets for processing and recycling capacity in the EU were increased. Following a vote in Parliament, negotiations between the institutions are to begin - probably in October 2023. It is the goal of the Spanish Presidency to conclude these by the end of the year.
AK EUROPA Position Paper: The Critical Raw Materials Act
EU Commission: European Critical Raw Materials Act
EU Parliament: Short video on the Critical Raw Materials Act
EU Council: Critical Raw Materials Act: Council adopts negotiation position
EU Parliament: Critical raw materials: MEPs back plans to secure EU own supply and sovereignty