EUROPEAN CRITICAL RAW MATERIALS LAW
On March 16, 2023. The European Commission has published a draft regulation on critical and strategic raw materials for the European Union economy, along with an updated list of critical raw materials (CRM). This document should help develop research and innovation activities, negotiate commercial agreements, and implement new projects in CRM reconnaissance and exploitation. The regulation establishes clear production, processing and recycling levels for internal markets, and implies diversification of the supply of critical raw materials.
In order to facilitate the identification of raw materials to which reliable and unrestricted access is crucial for the EU economy and at the same time the risk of problems with their supply is high, the EC is creating a list of critical raw materials (CRM – Critical Raw Materials). Critical raw materials are a defined catalog of raw materials of high importance to the European economy and high supply risk. Initially, the critical raw materials list was established as a priority action under the EU’s “Raw Materials Initiative” in 2008, and the first CRM list was released in 2011. At the beginning, the list contained 14 raw materials, which the EC pledged to update every three years. There are now 30 such raw materials identified – among the most important are lithium (used in electric batteries) and rare earth metals (a group of chemical elements used in wind turbines, among other things).
The real test for the European Critical Raw Materials Act will be whether it can be successfully integrated into the emerging European Industrial Strategy. It is of little use to mine and recycle more lithium and rare earth elements in Europe if they are exported abroad for processing into end products that Europeans then buy. Reports indicate that the old continent could meet most of its raw material needs from local sources, but European photovoltaic production, for example, has so far accounted for only 3% of installations. Therefore, Europe needs to invest now in both production capacity (of current and next-generation technologies) as well as in stocks of critical raw materials that could be released to the domestic market in the event of supply shocks.