The European Parliament’s political groups want to strengthen social and environmental safeguards for “strategic” mining projects in Europe and abroad as the EU scrambles to access key raw materials needed for the green and digital transitions.
The Parliament’s industry committee will be voting on Thursday (7 September) on the EU’s draft Critical Raw Materials Act, which aims to reduce the bloc’s dependency on China and other countries for metals such as rare earths.
Unveiled in March by the European Commission, the proposal sets benchmarks to increase domestic capacity for raw materials extraction, processing and recycling, with aspirational targets corresponding respectively to 10, 40 and 15% of the EU’s needs.
In June, EU member states voted to increase the Commission’s proposed benchmark for processing on European soil, raising it from 40 to 50%.
Lawmakers in the Parliament’s industry committee support the 50% objective, but added an international dimension to it, saying “up to 20% of the Union’s new processing capacity” might be developed as part of so-called “strategic partnerships” with foreign countries.
These would be promoted via “strategic projects” benefitting from quicker permitting rules and access to finance – but also closer scrutiny when it comes to environmental and social safeguards, a move hailed by green campaign group Transport and Environment (T&E).
“I think this is more important than the targets, which are only voluntary,” said Julia Poliscanova, senior director at T&E in charge of vehicles and E-mobility supply chains.
“It’s the Strategic Projects framework which is so important because it simplifies the permitting process, but also puts in place environmental and social safeguards – not new standards but existing ones – to ensure that they are actually met,” she told EURACTIV.
Strategic projects can cover all stages of the raw materials supply chain – from mining to processing and recycling – and must be “mutually beneficial” for the EU and the host country, says the draft Parliament report, which enjoys broad cross-party support.
For instance, the EU is currently in talks with Chile to set up a strategic partnership on raw materials, as part of a wider EU-Chile trade agreement that could ease the EU’s access to the country’s vast lithium reserves.
“We need to be credible if we talk of ‘creating value locally’,” explained Hildegard Bentele, a German lawmaker from the centre-right European People’s Party (EPP) who pushed the amendment ensuring that the processing benchmark can be met partly in partner countries.
Sustainability certification schemes
Diversification of raw materials supplies “needs to become a priority of the Union’s external action and diplomacy,” argues the draft parliamentary report authored by Nicola Beer, a centrist lawmaker from Germany’s liberal FDP party.
The European Parliament is even considering tougher sustainability requirements for critical raw material projects by imposing stricter conditions for the EU-wide recognition of industry certification schemes, laid out in Annex 4 of the draft regulation.
“First, it says that only those schemes that have multi-stakeholder governance systems in place can qualify. And that’s important because it prevents industry from just rubber-stamping themselves – there are unions and other stakeholders involved,” T&E’s Poliscanova explained.
To win EU approval, industry certification schemes will need to include measures to mitigate environmental risks in areas like air, water and soil pollution, preservation of biodiversity and greenhouse gas emissions.
Secondly, compliance with EU certification standards will be verified at the site level rather than the company level. “That means regulators would not be checking overall company policies on paper, but would verify what is actually happening in specific mines and sites. And that’s quite important,” Poliscanova said.
The amendments on certification are part of a set of compromise agreements supported by a large majority of the Parliament’s political groups, “so it will pass”, Poliscanova told EURACTIV.
“The really big question is whether or not it will pass during trilogue negotiations with the Council,” she added, saying it was “really important that EU member states also agree to add these safeguards to certification schemes”.
What is more, large companies will be required to conduct stress tests to assess “the vulnerability of the strategic raw materials supply chains and their exposure to supply risks,” the draft regulation says. This part is still uncertain, however, and proved contentious in talks between Parliament’s political groups ahead of Thursday’s vote in the industry committee.
Still, T&E are happy with the Parliament’s draft report, saying it improves the Commission’s proposals on certification and does not favour speed over quality when it comes to developing new mining projects.
Finance: the missing piece
An important missing piece, though, is the financial means to meet the self-sufficiency targets laid out in the Critical Raw Materials Act, T&E said.
“After the CRMA is agreed, the next step should be to unlock funding for critical raw materials under the ETS innovation fund, which was recently broadened to go beyond innovation and also help scale up clean technologies,” Poliscanova told EURACTIV.
“The EU has just announced a big round of financing to develop green Hydrogen. Well, maybe the next step should be for them to announce a similar round for batteries and critical raw materials, to allow the union to meet its objectives.”
The EPP’s Bentele concurred, telling EURACTIV that “gaps in funding are a serious risk” for the EU’s sovereignty on critical minerals. “Private investors from non-reliable partners can infiltrate our systemic relevant infrastructure and supply chains,” said Bentele, who put forward an amendment on the ownership structure of EU-backed investment projects.
The centre-right German lawmaker also supports the creation of “a dedicated export credit facility” under the aegis of the European Investment Bank (EIB) to assist EU companies engaging in the raw materials sector abroad. She is also in favour of creating an EU Raw Materials Fund as part of the EU’s Global Gateway programme for development aid.
The mood is similarly positive among left-wing parties in Parliament, who said they will support the compromise amendments tabled during the committee vote on Thursday.
“Although the compromise still contains problematic elements, such as the role of private certification schemes and the possibility of developing strategic projects in Natura 2000 areas, I will support the compromise proposal for the time being,” said Cornelia Ernst, a German lawmaker who leads on the proposal for the Left political group.
“It is important that the good and improved elements are retained,” Ernst told EURACTIV, citing stricter social and environmental criteria for the recognition of strategic projects and trade policy aspects, “such as the fact that emerging and developing countries should benefit more from technology transfers of recycling technologies”.
After Thursday’s vote, the draft Critical Raw Materials Act is expected to be voted in the European Parliament’s plenary on 11 September. This will open the way for negotiations with EU member states to finalise the law.