Reducing dependencies on critical raw materials to prevent shortages and price explosions
Recommendations for the European legislative period 2024-2029
Without lithium, rare earths and copper, no wind turbine, no semiconductor, and no electric car can function. In short, the economy is dependent on critical raw materials for its transformation. However, European industry is still dependent on China and other geopolitically risky markets for imports. The heated race for these strategically important raw materials is also a race for the prosperity of the future. The EU must therefore quickly free itself from this dependency, secure its supply of raw materials and avoid price explosions.
What matters now
The strategic projects for the extraction, processing and recycling of strategic raw materials must be initiated quickly. Further delays in planning and authorisation procedures must be avoided. To date, the CRMA has not been sufficiently harmonised with other legislation and regulations such as the taxonomy, chemicals legislation, the Eco-design Regulation or supply chain due diligence obligations. The European Commission must resolve conflicting objectives together with the Member States in favour of greater security of supply.
The success of the CRMA is primarily decided in the member states. It is their municipalities that implement the projects locally and ensure social acceptance. This requires close contact between the European, national, and municipal levels. Location policy responses are also needed regarding energy and electricity costs as well as sufficient skilled labour for the extraction, processing, and recycling of strategic raw materials.
The EU needs its own IPCEI on critical raw materials, which should be organised in line with the IPCEI criteria. The multi-annual EU financial framework should be regularly reviewed and, if necessary, the necessary funds should be made available for strategic projects. The use of existing and new EU funds as well as the programmes of the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) for raw materials projects should also be examined by a new European Commission. The EU taxonomy must prevent mining from being categorised as unsustainable and investments in exploration and extraction projects from being made more difficult.
The EU should forge further raw materials alliances with African, Latin American, and Asian partners. Private sector involvement must be politically flanked. Government authorities and local companies on the ground should be supported through development cooperation instruments and the involvement of European companies should be incentivised with financial instruments such as guarantees. Diversification with relevant third markets must also be promoted by removing trade policy barriers. European raw materials interests must therefore continue to be reflected in EU trade policy and (energy/industrial) foreign policy - especially with like-minded partners such as the USA and Japan.
The political activities of the EU and its member states should support companies in the areas of diversification, raw material monitoring for critical raw materials and stockpiling (e.g., through tax incentives) and provide market-based incentives for resource efficiency and the circular economy.
