European critical raw materials act
In “A Europe Fit for the Digital Age”
Critical raw materials (CRMs) are the raw materials that are both important economically and present a high supply risk (such as lithium for batteries).
The Commission adopted the proposal for a CRMs act in March 2023. The general objective of the proposed regulation would be to ensure the EU’s access to a secure and sustainable supply of CRMs by pursuing four specific objectives:
- To strengthen the EU’s capacities along the different stages of the value chain. The aim would be to ensure that by 2030:
- The EU extraction capacity covers at least 10% of the EU's annual consumption of strategic raw materials.
- The EU processing capacity covers at least 40% of the EU's annual consumption of strategic raw materials.
- The EU recycling capacity covers at least 15% of the EU's annual consumption of strategic raw materials.
- To diversify the EU’s imports of raw materials: no third country should provide more than 65% of the EU's annual consumption (for each strategic raw material).
- To improve monitoring and risk mitigation capacities and
- To ensure a well-functioning single market while improving the sustainability and circularity of CRMs.
The CRMs act would establish lists of 16 'strategic raw materials' (SRMs) and 34 CRMs. The list of CRMs was prepared by the Commission based on their economic importance and supply risk. SRMs were identified based on their relevance for the green and digital transition, as well as for defence and space applications.
"Strategic projects" would be eligible for streamlined permitting processes and easier access to financing. Some provisions would aim to speed up the permit granting process for critical raw material projects. Furthermore, each Member State would have to draw up a national programme for general exploration targeted at critical raw materials.
The proposed act would also establish a mechanism for coordinated monitoring of CRMs supply chains and provide measures to mitigate supply risks. It also includes provisions to support the development of the circularity of CRMs markets and to lower the environmental footprint of CRMs. The proposal would also set up a framework for cooperation on strategic partnerships with third countries. A "European CRMs Board" would also be set up, composed of representatives from Member States and the Commission. The Board would give advice to the Commission and assist with coordination, cooperation and information exchange to support the implementation of the proposed regulation.
The Council adopted its negotiating position on 30 June 2023. In particular, it raises the level of ambition for processing and recycling capacity: from 40 to 50% for processing and from 15 to 20% for recycling and adds Bauxite/Alumina/Aluminium as strategic raw and critical materials.
In Parliament, the file was allocated to the Committee on Industry, Research and Energy (ITRE). The Committee on the Environment, Public Health and Food Safety (ENVI) is associated under Rule 57 with exclusive and shared competences.
Nicola Beer (Renew, Germany) was appointed rapporteur in ITRE in April 2023. Her draft report was released on 15 May. A total of 1172 amendments were tabled in ITRE (including the Rapporteur's amendments). The vote in ITRE took place on 7 September 2023. Parliament adopted its position on 14 September (see the EPRS legislative briefing for more detail). In particular, the plenary adopted amendments that introduce a new article stating that the Commission would have to submit to the Parliament and the Council a list of strategic secondary raw materials, including ferrous scrap, by six months after the adoption of the proposed regulation. Aluminium would also be added to the list of SRMs.
On 13 November 2023, the Council and Parliament found a provisional agreement.
Under the agreement, aluminium is added to the list of SRMs. The benchmark for EU recycling capacity of SRMs is increased to 25 % of its annual consumption of SRMs by 2030. The EU should be able to recycle significantly increasing amounts of each SRM in waste. The Commission and Member States will undertake efforts to incentivise technological progress and resource efficiency to moderate the expected increase in EU consumption of CRMs. By 1 January 2027, the Commission will adopt recycling benchmarks for each SRM in relevant waste streams, through a delegated act. The permit-granting process for strategic projects should not exceed 27 months for extraction, and 15 months for processing or recycling. Where an environmental impact assessment is required under Directive 2011/92/EU to examine projects' effects on the environment, preparation the report will not be included in the duration of the permit granting process.
There will be one point of contact per administrative level and stage of the CRM value chain, per Member State. Member States will be able to object to granting 'strategic project' status to a project on their territory. The agreed text clearly states that Member States cannot be obliged to hold or release strategic stocks. The Commission will adopt delegated acts setting minimum recycled content in permanent magnets for some CRMs recovered from waste by 31 December 2031 (certain products may be excluded from this obligation). The CRMs board char will invite European Parliament representatives to attend its meetings as observers. The board will also set up subgroups on the promotion of public participation in CRMs projects and on the promotion of circularity, resource efficiency and substitution of CRMs.
The Parliament adopted the agreement on 12 December 2023 with 549 votes in favor, 43 against and 24 abstentions. The Council gave its final approval to the agreement on 18 March 2024 (closing the decision-making procedure). The new regulation was signed on 11 April 2024.
The CRM act was published in the Official Journal of the EU on 3 May 2024, and entered into force on 23 May 2024.
References:
- Regulation (EU) 2024/1252 of the European Parliament and of the Council of 11 April 2024 establishing a framework for ensuring a secure and sustainable supply of critical raw materials
- EP Legislative Observatory, Procedure file on the framework for ensuring a secure and sustainable supply of critical raw materials, 2023/0079(COD)
- Council mandate for negotiations with the European Parliament, 30 June 2023
- European Commission, Proposal for a regulation establishing a framework for ensuring a secure and sustainable supply of critical raw materials, COM(2023) 160
- European Commission, Green Deal Industrial Plan for the Net-Zero Age, COM(2023) 62
- European Economic and Social Committee, Opinion on CRM act, EESC 2023/01573
- Committee of the Regions, Opinion on the Critical raw materials package, CDR 2188/2023
- European Commission, REPowerEU Plan, COM(2022) 230
- European Parliament, Resolution on a European strategy for critical raw materials, 2021/2011(INI)
- European Commission, Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability, COM(2020) 474
Further reading:
- European Parliament, EPRS, Critical raw materials act, Briefing, June 2024
- European Parliament, EPRS, EU critical raw materials act: Initial Appraisal of a European Commission Impact Assessment, Briefing, May 2023
- European Parliament, EPRS, Securing Europe's supply of critical raw materials: The material nature of the EU's strategic goals, March 2023
Author: Guillaume Ragonnaud, Members' Research Service, legislative-train@europarl.europa.eu