Sustainable supplies of critical raw materials crucial for EU industry

MEPs want Europe to be less dependent on the imports of critical raw materials that are crucial for its strategic industries.

A man works on photovoltaic panels during the launch of the work for the construction of the first solar road at a factory in Tourouvre, northwestern France
Several critical raw materials such as indium are needed to produce photovoltaic panels ©CHARLY TRIBALLEAU / AFP

To become climate neutral, energy efficient and more competitive in the digital age, the EU will need more critical raw materials such as lithium and cobalt to manufacture batteries and electric engines. These technologies allow for the development of strategic sectors: renewable energy, electric cars, and digital technologies.

The green and digital transitions will also drive increased demand for critical raw materials (by 2050, EU demand for lithium could be up to 21 times the level in 2020).

Global supply chains that were already stretched were hit further by the Covid-19 pandemic, leading to shortages of critical raw materials in Europe and leaving the industry facing challenges in securing access to resources.

The Russian war on Ukraine and an increasingly aggressive Chinese trade and industrial policy mean cobalt, lithium and other raw materials have become a geopolitical issue.

Reversing EU dependence on imports


The EU faces bottlenecks and vulnerabilities along the supply chain due to its heavy reliance on imports from single sources and the shrinking number of suppliers. China currently produces 86% of the world's rare earth minerals. The EU imports 100% of its supply of heavy rare earth elements from China, 98% of its boron from Turkey and 71% of its platinum from South Africa.

Although China remains a major EU supplier, some raw materials are sourced from within the EU. For example, coking coal and copper come from Poland, arsenic from Belgium, hafnium from France, strontium from Spain and nickel from Finland.

The European Commission presented the Critical Raw Materials Act in March 2023. Parmliament negotiators reached an informal agreement with the Council, which was adopted by MEPs on 12 December 2023. The text aims to make sure that more raw materials are extracted, processed and recycled in the EU.

The rules set some benchmarks for the EU’s annual consumption by 2030:

  • The EU should extract at least 10% of the raw materials it consumes
  • The EU should produce, through processing, at least 40% of its annual consumption of strategic raw materials
  • Through recycling waste, the EU should be able to produce at least 25% of its annual consumption


The EU will also:

  • Diversify supply sources of critical raw materials and reduce its reliance on a few non-EU countries
  • Reduce red tape, allow for more innovation and increase the role of substitute products along the value chain
  • Support more smaller companies, provide economic incentives for companies to invest and produce in Europe, more research and development of alternative materials and more environmentally friendly mining and production methods
  • Secure strategic long-term partnerships with non-EU countries to improve knowledge and technology transfer, training and upskilling for new jobs


By 2030, no country from outside the EU should provide more than 65% of the EU’s annual consumption of any strategic raw material, in either unprocessed form or at any stage of processing.


Recycling raw materials in the EU


Raw materials that can be recycled from older products are known as secondary raw materials. The new legislation will promote the recycling and recovery of critical raw materials from mining, processing and commercial waste streams to ensure reliable, secure and sustainable access to them and increase the deployment of substitute raw materials.

Learn more about the importance and benefits of a circular economy

The raw materials sector provided nearly 3,5 million jobs in the EU in 2017. Moving towards a more circular economy could create a net increase of 700,000 jobs in the EU by 2030.

Background


The final text adopted by Parliament in December 2023 also need to be formally approved by the Council before it can become law.

Read more about the circular economy