In a fresh agreement on the Critical Raw Materials Act (CRMA), EU countries want to further increase targets for domestic processing of strategic raw materials, despite public commitments that processing should be done in resource-rich partner countries.
In March, the European Commission proposed the CRMA, a draft law aiming to increase domestic production of critical raw materials and reduce dependency on other countries, particularly China.
The law is part of the EU’s overall ambition to diversify supplies of key products and materials, in order to “de-risk” the economic relationship with China.
While the Commission proposed that 40% of the processing and refining of strategic materials used in the EU take place in Europe, national governments want to go even further, raising the non-binding target to 50% by 2030, according to an agreement reached between EU ambassadors on Friday (30 June), seen by EURACTIV.
Furthermore, national governments want to raise ambition on recycling strategic materials, increasing from 15 to 20% the target for what consumption should be met by domestic recycling capacities.
Meanwhile, the member states’ position leaves open how this higher ambition should be reached, as the proposal does not include any additional financial means to support the uptake of domestic production while deadlines for permitting procedures are kept, and in some cases extended.
The agreement includes the establishment of a group of member states’ representatives, which should regularly issue reports “describing obstacles to access to finance and recommendations to facilitate access to finance” for projects considered of strategic importance.
Domestic processing at odds with international partnerships
The increased ambition for domestic processing of raw materials comes despite public statements by EU leaders not to “turn inwards” on trade. Instead, EU and national officials have stressed on many occasions that the bulk of the critical raw materials needed will come from resource-rich third countries.
“In many places in the world, raw materials are being dug out of the earth and loaded onto ships with all the unusable by-catch, and then the first processing stage takes place elsewhere in order to obtain the actual raw material from it,” German Chancellor Olaf Scholz (SPD/S&D) told journalists on Friday on the sidelines of a meeting of EU leaders in Brussels.
“If we now work globally to ensure that this takes place in the countries where the raw material is extracted, then for me this is also a contribution to strengthening these countries, creating economic development opportunities and at the same time intensifying the global supply relationships and thus the resilience of a global network in terms of raw material supplies,” Scholz added.
However, critics have already argued that the 40% processing target in the Commission’s proposal would be at odds with this goal.
Hildegard Bentele, an EU lawmaker for the centre-right EPP group told journalists in May she believed that “we can achieve many good new partnerships and also a lot in geopolitical terms”.
“But then we have a percentage figure of 40% for processing in the EU, which would contradict the fact that we actually want to do this abroad with our partners,” Bentele, who acts as shadow rapporteur for the CRMA added, calling the 40% target already “very ambitious”.
The draft law still has to be negotiated between European Parliament and Council, with negotiators hoping to find an agreement before the end of the year.
Aluminium added to list of strategic materials
In their proposed changes to the proposal, member states also push for the inclusion of aluminium on the list of strategic materials, something that was contested as the European Commission did not include aluminium in the scope of the draft law, while its impact assessment had included the material.
This point, too, could become contentious with the European Parliament, as its chief negotiator Nicola Beer (FDP/Renew) said she does not “see any scope for expanding the corresponding lists for political and strategic raw materials quasi arbitrarily now”.
While bauxite, the pre-product of aluminium, was considered a “critical raw material” in the initial Commission proposal, it did not yet make the list of “strategic raw materials” subject to the domestic production target and accelerated permitting procedure.
While Beer proposed the list of strategic raw materials to be reviewed and potentially updated every two years, national governments propose a review “at least every three years”.
Member states also added a clarification on Environmental Impact Assessments, which should partly be excluded from the scope of deadlines for permitting procedures set in the new law.
In the original Commission draft, permitting processes for mining projects that are deemed critical by a yet-to-be-established critical raw materials board should not take longer than 24 months.
While member states seconded the ambitious timeline, they argued that some parts of environmental assessments should not fall under the proposal for how much time public authorities are allowed to take to grant a permit for projects deemed strategic.
“This also includes public consultations which are directly linked to public acceptance,” government representatives noted, a key obstacle to domestic sourcing of raw materials as many mining projects face local resistance.
The proposed changes would also allow member states to ask for more time to issue the permit for strategic projects, “where the nature, complexity, location or size of the proposed project so require”.
Potential extensions could see six months added to the 24 months allowed for mining projects, and three months to the 12 months allowed to grant permits for processing or recycling facilities.