The President of the European Commission, Ursula von der Leyen, announced at the European Parliament on Wednesday 14 September the launch of a new European law on critical raw materials to secure the European Union’s supplies, as well as a new EU sovereignty fund.
“Lithium and rare earths are already replacing gas and oil at the heart of our economy. By 2030, our demand for these rare metals will increase fivefold”, said the Commission President.
In her view, it is necessary to avoid falling into a new dependency similar to that which currently exists for oil and gas and to be freed from the Chinese monopoly, which controls 90% of rare earths and 60% of lithium.
The President wants to focus on trade partnerships with the ratification of agreements with Chile, Mexico and New Zealand and progressing negotiations with Australia and India.
She also intends to introduce a ‘European Critical Raw Materials Act’, which is expected to be presented in the first quarter of 2023 (see EUROPE 13003/6).
Here, the President wants to build on the experiences of the ‘Battery Alliance’ (see EUROPE 12981/18), launched 5 years ago, and the ‘Chips Act’, presented earlier this year and currently under negotiation (see EUROPE 12984/9). In this context, she stated that she intends to increase the EU’s participation in projects of common European interest and mostly importantly to create a European sovereignty fund.
Four areas of focus
Commissioner for the Internal Market Thierry Breton explained that the law will be structured around four main areas. Firstly, it is important to establish criteria for determining which raw materials are “strategic” for the EU’s needs (economic importance, concentration of supply, strategic applications and supply shortages), he said. The objective of this is to guide investors on priority needs and to direct European and national efforts.
Secondly, he is calling for the creation of a true European network of national raw materials agencies. This network would develop monitoring and crisis simulation capabilities to enable industry to anticipate disruption risks, price increases or shortages and to make appropriate diversification, storage and investment decisions.
Thirdly, the Commissioner highlights the need to make supply chains more resilient, “by supporting projects and attracting more private investment, from mining to refining, processing and recycling. And all this while ensuring the highest social and environmental standards - the European way”.
The Commission should be empowered to draw up a list of strategic projects on the basis of Member States’ proposals, he said. These projects could benefit from simplified procedures and better access to funding.
“So that the time from the start of exploration work to a mine or a refining facility possibly opening is no longer a question of decades”, he writes.
Concerning increasing funding for important projects of common European interest and the creation of the new European Sovereignty Fund, he indicated that targets could be included in future European legislation.
“For example, a target could be set that at least 30% of the EU’s demand for refined lithium should originate from the EU by 2030, or to recover at least 20% of the rare earth elements present in relevant waste streams by 2030”, he says.
Finally, the Commissioner stresses the importance of preserving healthy competition in the single market through certification schemes for the environmental and social performance of mining activities. “Europe could take the lead in rationalising and consolidating such certification schemes”, he believes.
Strategic storage would be an important tool, in his view, to prevent disruptions or imbalances in supply chains. He also stressed the importance of harmonising national legislation on the treatment of waste in the context of the circular economy.
The Commissioner published a long article in June on the subject of mining in Europe (see EUROPE 12970/9). In 2020, the European Commission presented an action plan on critical raw materials (see EUROPE 12552/1). In the same year, a European Raw Materials Alliance (ERMA) was established.
To read Thierry Breton’s post: https://aeur.eu/f/32m (Original version in French by Pascal Hansens)