European Critical Raw Materials Act

On 16 March 2023, the European Commission adopted the final Critical Raw Materials Act (CRMA). The regulation of the European Parliament and of the Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials (CRM) and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020 was approved on with the following objectives:

• To strengthen the different stages of the European CRM value chain; 
• To diversify the EU's imports of CRMs to reduce strategic dependencies;  
• To improve the EU capacity to monitor and mitigate current and future risks of disruptions to the supply of CRMs; 
• To ensure the free movement of CRMs on the single market while ensuring a high level of environmental protection, by improving their circularity and sustainability. 

Chapter 1 of the proposal sets the following (voluntary) benchmarks for the domestic production along the supply chain by 2030: 

• At least 10% of the EU’s annual consumption for extraction,
• At least 40% of the EU’s annual consumption for processing,
• At least 25% of the EU’s annual consumption for recycling,
• Not more than 65% of the EU’s annual consumption of each strategic raw material at any relevant stage of processing should come from a single third country.

Chapter 2 identifies lists of strategic and critical raw materials (Annex I and II, respectively), determined by supply risk and economic importance. This list will be reviewed and updated every 4 years.

Chapter 3 establishes criteria for the selection of Strategic Projects to strengthen the EU’s CRM value chain, encourage new production and reduce administrative burdens. Strategic Projects may benefit from facilitated access to finance and expedited permitting processes: 24 months for extraction permits and 12 months for processing and recycling permits. In addition, member states must create and implement a national programme for geological exploration targeted at CRMs, which may include mineral mapping, geochemical campaigns and geoscientific surveys.

Chapter 4 proposes to create a monitoring mechanism and framework for risk mitigation, which will include the following:

• Monitoring of trade flows, demand and supply, concentration of supply and Union and global production and production capacities at all stages of the value chain;
• Ensuring that a stress test is performed for each CRM’s supply chain at least every three years;
• Requiring large importers and manufacturers to regularly audit supply chains. 

The Commission also proposes a joint-purchasing system to aggregate the demand of CRM among member states (both processed and unprocessed materials).

Chapter 5 develops measures to facilitate circularity and sustainability in CRM markets:

• Products containing permanent magnets must provide information on the recyclability and recycled content;
• A minimum recycled rare earth content threshold shall be established;
• The Commission may officially recognize organisation or industry-led ESG standards and regulate the calculation and verification of the environmental footprint of CRM;
• Member states must identify, adopt and implement measures to improve the collection and recycling of CRM rich waste and investigate the potential for recovery of CRM from extractive waste in active and historic mining sites. 

Chapter 6 proposes greater coordination between member states and EU to achieve foreign policy goals relevant to critical materials supply.

Chapter 7 establishes the European Critical Raw Materials Board, composed of Member State and Commission representatives, to implement the Regulation.

Want to know more about this policy ? Learn more