Proposal for a Regulation establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020

Author (Corporate)
Series Details COM (2023) 160
Publication Date 16/03/2023
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Legislative initiative tabled by the European Commission on 16 March 2023, establishing a framework for ensuring a secure and sustainable supply of critical raw materials. It introduces amendments to Regulation (EU) 168/2013, Regulation (EU) 2018/858, Regulation (EU) 2018/1724 and Regulation (EU) 2019/1020. This is a text with EEA relevance, and it is also known as the draft European Critical Raw Materials Act.

Further information:

Raw materials are found at the beginning of all industrial value chains. The focus of this Regulation is on non-energy, non-agricultural raw materials that are important for the European Union's (EU) economy, the supplies of which are subject to a high level of supply risk. These critical raw materials (CRMs) are often indispensable inputs for a wide set of strategic sectors. At the same time, extraction and processing of CRMs can have negative environmental impacts, depending on the methods and processes used, as well as social impacts.

The EU relies almost exclusively on imports for many critical raw materials. Suppliers of those imports are often highly concentrated in a small number of third countries, both at the extraction and processing stage. This concentration exposes the EU to significant supply risks. There are precedents of countries leveraging their strong position as suppliers of CRMs against buyer countries, for instance through export restrictions.

With the global shift towards renewable energy and the digitalisation of economies and societies, demand for several critical raw materials is forecasted to rapidly increase going forward. Substituting materials and increasing material efficiency and circularity can mitigate the projected rise in demand to a certain extent, but these steps are not expected to reverse the trend. Against this background, many countries have adopted policies to actively secure their supply of critical raw materials, increasing resource competition.

The growing geopolitical tension and the COVID-19 (coronavirus) pandemic highlighted the EU's structural supply dependencies and their potentially damaging effects in times of crisis. The 2008 Raw Materials Initiative and the 2020 Action Plan on Critical Raw Materials provided a framework for initiatives assessing the criticality of different raw materials, the international diversification, research and innovation and the development of CRMs production capacity in the EU. However, non-regulatory actions have not been enough to ensure the EU’s access to a secure and sustainable supply of critical raw materials.

This draft law seeks to strengthen the different stages of the EU's critical raw materials value chain, diversify the EU's imports of CRM to reduce strategic dependencies, improve the EU's capacity to monitor and mitigate disruption risks to CRM supply, and ensure the free movement of CRMs on the single market while ensuring a high level of environmental protection.

The proposed Regulation was adopted by the European Commission on 16 March 2023, alongside a Communication setting out a common approach to ensuring the supply of critical raw materials.

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Commentary and Analysis
Confederation of European Paper Industries (CEPI): Cepi statement on the forthcoming EU Raw Materials Act (20 January 2023)
WindEurope: Press Release, 26/01/2023: Ensuring access to critical materials for steel and wind sectors essential for EU clean-tech economy
Friends of the Earth: Open Letter, 10/02/2023: Crunch time for new EU laws on raw materials
European Automobile Manufacturers’ Association (ACEA): Position Paper, 07/03/2023: Critical Raw Materials Act
Transport&Environment: Discover, 09/03/2023: Raw materials projects must meet highest green and social standards, say NGOs
Politico: Explainers, 09/03/2023: The critical raw materials you need to know
FERN: News, 16/03/2023: EU use of critical raw materials - how to make sure it's fair for people and forests
ING Think: Article, 17/03/2023: EU enters race with the US to produce clean tech in bid to reduce reliance on China
Chatham House: Expert Comment, 04/04/2023: Europe’s pursuit of securing critical raw materials for the green transition
The Economist: Economist Intelligence Unit (EIU), 17/04/2023: EU acts to secure access to critical raw materials
Peterson Institute for International Economics (PIIE): Policy Briefs No 6, May 2023: Why the proposed Brussels buyers club to procure critical minerals is a bad idea

Bloomberg, 08/02/2023: Sweden Eyes Stockpiling of Raw Materials as Part of EU Plan
Cyprus Mail. 18/02/2023: Cyprus stands to benefit from EU raw materials plans
Euronews, 07/03/2023: Europe in race to secure raw materials critical for energy transition
Politico, 10/03/2023: China leaves EU playing catchup in race for raw materials
EurActiv, 16/03/2023: EU unveils Critical Raw Materials Act, aiming to lessen dependence on China
EUObserver, 16/03/2023: EU launches critical raw materials act
Reuters, 16/03/2023: EU announces plans to lead green industrial revolution

EUR-LEX: SWD(2023)160: Staff Working Document accompanying the Proposal - Subsidiarity Grid
EUR-LEX: SWD(2023)161: Staff Working Document accompanying the Proposal - Impact Assessment Report
EUR-LEX: SWD(2023)162: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report
European Commission: DG Internal Market, Industry, Entrepreneurship and SMEs: Critical raw materials
European Commission: Press Release, 16/03/2023: Critical Raw Materials: ensuring secure and sustainable supply chains for EU's green and digital future
European Commission: Questions and Answers on the European Critical Raw Materials Act (16 March 2023)
European Commission: Remarks by Executive Vice-President Dombrovskis and Commissioner Breton at the press conference on the Critical Raw Materials Act, the EU's long-term competitiveness strategy, and 30 years of the Single Market (16 March 2023)
Renew Europe EP Group: Newsroom, 16/03/2023: Net Zero Industry and Critical Raw Materials Acts: subsidies are no silver bullet

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