EU’s Critical Raw Materials Act adopted with looser social, environmental rules

Pursuing so-called strategic autonomy, the European Union put together the Critical Raw Materials Act after a substantial delay in the last phase. Lead legislators from the European Parliament aren’t pleased with the final provisions regulating social and environmental impact.

The Council of the EU adopted the Critical Raw Materials Act (CRMA), allowing the regulation to come into force. It aims to ensure a secure and sustainable supply and diversify it, paving the way for what the administration in Brussels calls a strategic autonomy.

Critical raw materials have high economic importance and risk of supply disruption due to their concentration of sources and lack of substitutes. The European Parliament adopted the proposal three months ago and transferred it to the council. After the initial agreement, including the European Commission, the institution consisting of relevant ministers from member states is usually expected to give the green light in a formal manner.

EU aims for 25% share of supply from recycling

CRMA is also designed to strengthen circularity including recycling. Critical raw materials are important for industrial value chains across the board. The EU is especially counting on reindustrialization in cutting-edge technologies and defense.

Officials have promoted the legislation as a tool for achieving climate, energy and environment goals, while critics are warning that ecosystems and local populations in the EU and countries supplying it would be jeopardized due to simplified permitting.

One tenth of critical raw materials needs to come from within the 27-member trade bloc

The production of solar panels, wind turbines, electric vehicles and energy-efficient lighting depends on critical raw materials. The EU has an ambition to reduce overreliance on some countries by establishing strategic partnerships with neighbors and friendly governments.

CRMA establishes three benchmarks for the EU’s consumption: 10% from local extraction; 40% to be processed in the EU and 25% from recycled materials.

There would be no electric vehicles or wind turbines without strategic materials

The final text identifies 34 critical materials, of which 17 are strategic, like copper, aluminum and natural graphite. Some are groups of elements. Strategic heavy rare earth elements are neodymium, terbium, dysprosium and gadolinium. The light ones are praseodymium, samarium and cerium, the Council of the EU noted.

For instance, tungsten is critical for the vibrating technology in phones. The booming electric vehicle sector is requiring more and more lithium, cobalt and nickel, which are all strategic raw materials. Another one, boron, is used in wind turbines.

The council acknowledged that the EU would never be self-sufficient. For some materials, it is solely dependent on a single country… China provides 100% of heavy rare earth elements, 98% of boron comes from Turkey and South Africa provides 71% of the EU’s needs for platinum.

Imminent social upheaval, environmental impacts

Henrike Hahn, who had a leading role in the legislative initiative within the European Parliament, said provisions are strong for the involvement of local communities and on the rights of indigenous people. However, no explicit mention of free, prior and informed consent (FPIC) could be achieved due to resistance of the council, she claimed.

“We would have also hoped for stronger provisions in regard to protected areas, where we needed to make some difficult compromises. Nevertheless, the CRMA explicitly does not change any provisions of the environmental legal framework, which would have been a red line for us Greens,” said the German MEP.

The other co-lead was Cornelia Ernst from the Left in the European Parliament – GUE/NGL. “When the excavators start rolling for strategic projects in Europe and elsewhere, there will inevitably be social upheaval and environmental impacts. Then we will see how robust the law on critical raw materials really is,” she stressed, as quoted by Euronews.

Deadline for permitting for mining projects is 27 months

CRMA allows the European Commission and member states to recognize a project as strategic. Then authorities will be obligated to issue permits for extraction proposals within 27 months, compared to 15 months for recycling and processing.

Serbia is counting on a strategic partnership under the CRMA framework

The European Commission already signed agreements with Chile, Greenland, Ukraine, Canada and Rwanda. In addition, it is in talks with Norway.

Serbia is counting on a strategic partnership as well. In a nation-wide protest campaign in late 2021 and constant resistance on a local level, villagers and activists set back Rio Tinto’s lithium investment and several other exploration projects, including for boron. Tensions are now rising in neighboring Bosnia and Herzegovina, too.

The Critical Raw Materials Act, together with the Net Zero Industry Act (NZIA) and the reform of the electricity market design, is part of the Green Deal Industrial Plan from February of last year.