EU: Commission consults in preparation for a Critical Raw Materials Act

In her State of the Union 2022 address, European Commission President Ursula von der Leyen warned about the EU’s heavy dependence on the supplies from a few third countries for several critical raw materials (CRM), including those which are key to the green transition. She stressed the need to build up strategic reserves of CRM where supply is at risk and announced a forthcoming European Critical Raw Materials Act. This would be the first legislative act targeted at securing access to CRM.

The initiative follows the recent calls to secure EU supply of CRM from the European Council in the Versailles Declaration (March 2022) and the European Parliament in its Resolution on a European strategy for critical raw materials (November 2001).

On 30 September 2022, the European Commission launched a call for evidence and a public consultation in preparation for the European Critical Raw Materials Act. Both the call for evidence and the consultation close on 25 November 2022. 

Interested parties are invited to provide comments and evidence and reply to questions in relation to the CRM supply chain within and outside of the EU. The questions cover current EU policies, supply chain vulnerability, EU value chain, permitting, circularity, possible measures to ensure a secure and sustainable supply, investment, sustainability, and skilled workforce.

The initiative will consist of both regulatory and non-regulatory actions, built around four pillars:

1. defining priorities and objectives for EU actions - this would include identifying strategic CRM based on pre-set criteria;
2. improving the EU’s monitoring, risk management and governance of CRM, including by creating a European network of raw materials agencies;
3. strengthening the EU’s critical law materials value chain (mining, refining, processing, recycling) in a global context - this envisages identifying strategic projects in the EU and ensuring their better access to funding and streamlined permitting procedures; and
4. ensuring a sustainable level playing field across the Single Market - this may include, among others, setting recycling obligations or an information requirement on the carbon footprint of the production process inside and outside the EU of the critical raw materials-based products and components that are crucial to the green transition such as rare earth permanent magnets.  

The German Federal Ministry of Economic Affairs and Climate Action and the French Ministry of Industry had already submitted their Position on an EU Critical Raw Materials Act to the Commission on 29 September 2022, indicating that they would favor CRM legislation built on the following:

1. strengthening the crisis management of CRM supplies;
2. checking and evaluating existing financing instruments to support the necessary investments and consider the creation of a sovereign public/private investment fund;
3. ensuring a global level-playing field based on high ESG standards, including the extension of key provisions of the EU regulatory framework for batteries to other product groups.

The Commission will publish a summary of the public consultation within eight weeks after its closure. The European Critical Raw Materials Act package is expected to be launched in Q1 2023.