NOVEMBER 28, 2024
By Bernhard Tröster, Karin Küblböck, Simela Papatheophilou, ÖFSE – Austrian Foundation for Development Research
In a world increasingly focused on green energy and digital innovation, the European Union (EU) faces a substantial challenge: securing a stable and resilient supply of essential raw materials. Since 2008, the EU has developed various strategies to enhance the supply of critical raw materials (CRMs) that are vital for industries and strategic technologies. In 2024, the EU introduced its first legislation specifically addressing this issue ⎼ the Critical Raw Materials Act (CRMA). The legislation puts a strong emphasis on reducing reliance on external suppliers by promoting extraction, processing and recycling within Europe’s borders. But will the Act effectively mitigate the EU’s dependence on non-EU suppliers? Or does it simply continue extraction to supply a green transformation that is actually resource-intensive? Let’s explore what the CRMA proposes, its potential impact, and the challenges it faces.
What is the Critical Raw Materials Act (CRMA)?
The Critical Raw Materials Act is the legislative measure by the EU designed to ensure more diverse supplies of CRMs. The CRMA spotlights a select group of 17 “strategic” minerals (SRMs) out of the long list of 34 CRMs, essential for powering renewable energy, digitalization, and defense systems. With global demand surging, these materials are being prioritized to secure the EU’s technological future and to strengthen resilience and reliability in supply chains. For these strategic minerals, ambitious – but non-binding – benchmarks are defined. By 2030, the CRMA aims to achieve that:
- EU extraction capacity meets 10 % of its annual strategic raw material consumption;
- EU processing capacity covers 40 % of its annual consumption; and
- EU recycling capacity handles 25 % of the bloc’s annual consumption.
To achieve this, the CRMA introduces a range of measures in four areas:
- Facilitating Strategic Raw Materials Projects: The Act creates a category called Strategic Projects, which are initiatives deemed crucial for the EU’s SRM supply. These projects are defined as being in the “public interest”, aiming to fast-track their approval through shorter permitting processes.
- Recycling and Circularity: The CRMA promotes increased recycling and circularity, mandating member states to implement national measures to recover and recycle CRMs from waste.
- Data and Risk Monitoring: The CRMA requires comprehensive data collection and risk monitoring at both national and EU levels to anticipate and mitigate potential supply shortages.
- Transparency: The CRMA aims to boost transparency and gain community support by requiring public disclosure of Strategic Project details.
Strategic Projects and Streamlined Permitting – A Game Changer?
One of the central elements of the CRMA is its focus on Strategic Projects. The regulation aims to streamline approval procedures, arguing that Strategic Projects within the EU will have “overriding public interest”. As a result, they should benefit from a simplified permitting process and less bureaucracy. Notable changes are shortened public consultation periods when projects require Environmental Impact Assessments, limiting opportunities for participation by NGOs, citizen initiatives, and neighbors.
By the end of year 2024, the European Commission (EC) will designate the first Strategic Projects, having received 121 applications for projects in the EU, with most focusing on extraction (see for instance examples in Sweden, Finland or Czech Republic).
Whether the public interest status of Strategic Projects will result in faster permitting depends on the capacities of public authorities and the decisions made by administrative courts. Most importantly, the permitting process represents only a fraction of the overall lead-time required to establish mines and different forms of extraction (typically up to 15 years) and will probably not significantly reduce the total time required for full implementation.
Recycling and Circularity in the CRMA
Recycling and circularity are signaled in the CRMA in a significant way. The Act mandates member states to develop national recycling measures for all CRMs, implement circularity measures, and introduce labeling systems for materials like permanent magnets.
However, beyond the technical and economic challenges of recycling, the effectiveness of these measures depends largely on the level of commitment from member states, who are granted significant discretion in how they implement their programs at a national level.
Transparency – A Step Toward Trust?
More transparency around the permitting process and mandatory reports about the impacts and benefits of Strategic Projects are at the center of the CRMA’s approach to securing public trust and acceptance of projects that source raw materials in the EU, and process them. Generally, strategic projects are intended to have signaling effects for European industry and the general public, emphasizing the importance of mining and processing for resilient supply chains and for creating “real jobs” and a “viable economy”. Thus, the CRMA also aims to shift the public debate towards recognising the necessity of extraction for a green and digital transformation in the EU.
However, the intended measures are most likely not enough to overcome public resistance, especially against mining and other forms of extraction on European soil. In particular, as the CRMA potentially limits opportunities for community engagement and inputs into projects now deemed ‘strategic’, there will be less space for dialogue in the permitting phase. This could be particularly problematic with regards to the high percentage of CRMs located on Indigenous peoples’ lands in the EU and the ambiguity of the CRMA’s call for meaningful consultation with affected Indigenous peoples without concrete definitions of what constitutes such a consultation. Moreover, political influence in decision-making and a lack of transparency in the criteria used to select SRMs are current concerns.
No end to dependency
The CRMA’s ambitious targets to secure critical raw materials within the EU face significant challenges, particularly when taking into account additional economic barriers like high energy and labor costs in the EU, and the extra staffing and expertise required to accelerate administrative processes. While the Act does lay additional groundwork for fostering recycling in EU member states as a key element for a circular economy, the rather vague obligations it proposes in this area raise concerns about its true impact.
One key shortfall of the CRMA is the lack of emphasis on reducing resource consumption – a critical point, given the known social and ecological toll of extraction and processing of CRMs and rising demand for wind, solar, and EV batteries. Framing increased extraction as essential for a green transformation in the debate around the CRMA seems to us to be inherently problematic, without a recognition that this is not suggesting less use of energy, but only a shift in its production away from fossil fuels.
Ultimately, the CRMA subtly highlights that the EU will continue to rely heavily on sources outside Europe for raw materials, even if all the targets listed in the Act are fulfilled. This prompts the need for careful oversight of the EU’s activities around raw materials diplomacy, to prevent the shifting of the environmental and social costs of European resource consumption onto other world regions, often in the global South, as currently occurs.
This blog post is based on a previous ÖFSE Research Report by Bernhard Tröster, Karin Küblböck and Simela Papatheophilou: “In search of critical raw materials: What will the EU Critical Raw Materials Act achieve? An analysis of legal and factual implications of the CRMA”. https://doi.org/10.60637/2024-rr18
Contact: Bernhard Tröster, b.troester@oefse.at
Contribution: Simon Batterbury (Uni Melbourne & Uni Lancaster), Gerti Saxinger (Uni Vienna & Austrian Polar Research Institute APRI)
