2023-05-09 06:30:14
Faced with the global race for critical raw materials, the European Commission has presented a new regulation which aims to guarantee supplies to Member States. Extraction, recycling and transformation targets are set for 2030. The text will have to be approved by the European Parliament and the Council of the European Union.
Over the next few decades, the transition to renewable energies and the digitalization of economies will cause a drastic increase in demand for critical raw materials. Lithium, for example, should see its global demand multiplied by 89 by 2050. As for rare earths, European demand should be multiplied by six to seven by the same deadline. Europe is heavily dependent on imports for its supplies, and these raw materials often come from suppliers from a third country in a quasi-monopoly situation. Faced with this situation, the European Commission is proposing a regulation to ensure a secure, diverse, affordable and sustainable supply of critical raw materials. Before it comes into force, it will have to be approved by the European Parliament and the Council of the European Union.
In the appendix to this text, a list of critical raw materials has been updated, as well as another relating to so-called strategic ones. These have the particularity of being essential for Europe’s ecological and digital ambitions as well as for space and defense applications, but their future supply is not certain. This new regulation then provides quantified targets for reducing imports. Thus, by 2030, extraction should allow Europe to produce at least 10% of its annual consumption, and recycling, 15%. The transformation of critical raw materials carried out on European territory must also represent at least 40% of annual consumption.
Member States will have to implement national measures to improve the collection of waste rich in critical raw materials and ensure their recycling. They will also have to study the possibilities of recovering these materials from extraction waste from current mining activities, but also from former mining sites. Products containing permanent magnets, such as those used in wind turbines or electric vehicles, will have to meet circularity requirements and be accompanied by information on their recyclability and recycled content.
97% of magnesium supply comes from China
Another important point concerns dependence on supplier countries. In 2030, the Union’s annual consumption of each strategic raw material must not come more than 65% from a single third country, regardless of the stage of processing. You should know that currently, the EU buys 97% of its magnesium in China and the heavy rare earths, used in permanent magnets, are exclusively refined in this country.
The committee also stresses the need to consolidate European supply chains. To do this, it wants to reduce the administrative burden and simplify the authorization procedures for projects linked to critical raw materials. Selected strategic projects will also benefit from support for access to financing and authorization times will be shortened: 2 years for extraction permits and 1 year for processing and recycling permits. In addition, Member States will have to draw up national programs for the exploration of geological resources.
To mitigate supply-related risks, the text provides for the monitoring of supply chains of critical raw materials and the coordination of stocks of strategic raw materials between Member States. In particular, some large companies will have to carry out an audit of their supply chains of strategic raw materials, which includes a company-wide stress test.
Create an international critical raw materials club
It is also a question of investing in research, innovation and skills. The deployment of advanced technologies will need to be strengthened and a raw materials academy will be created to promote the upskilling of the workforce working in supply chains. Environmental protection is also included in this text, with in particular a request to increase the circularity and sustainability of critical raw materials.
Given that Europe will never cover its own needs and will continue to depend on imports for most of its consumption, this new regulation provides for the development of commercial actions on an international level. For example, there are plans to create a critical raw materials club with all like-minded countries and those willing to improve global supply chains. Another point concerns the strengthening of the role of the WTO, with the desire to expand its network of agreements to facilitate sustainable investment and free trade, but also to place greater emphasis on the application of legislation to combat against unfair trade practices.
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