[News] EU Critical Raw Materials Act comes into force

On 23 May, the EU’s Critical Raw Materials Act (CRMA) enters into force. First proposed in March 2023 along with the Net Zero Industry Act, the CRMA aims to secure Europe’s sustainable and increasingly competitive critical raw materials value chain. The relatively short period between the initial proposal and its enactment indicates the EU’s determination to ‘de-risk’ supply chains for a range of resources it deems are at risk in an increasingly turbulent global environment.

The CRMA places non-binding targets for the EU’s internal capacity for extraction, processing, refining and recycling of ‘Strategic Raw Materials’, such as nickel, tungsten, and cobalt, designated as key for the green and digital transition. To achieve this, the CRMA qualifies certain projects as of strategic value, even those outside the EU, that will benefit from more access to financing, expedited permitting processes and matchmaking with buyers.

In addition, the European Commission will regularly monitor and update mitigation measures to de-risk supply. As such, companies will have to comply with obligations such as participating in surveys, carrying out risk assessments of value chains and addressing potential vulnerabilities, as well as including new labelling standards for products and reaching minimum recycling targets.

Environmental groups have voiced some concerns in response to the CRMA, particularly over a lack of consumption reduction targets, sufficient protections of environmental and human rights, and a just approach communities affected by mining.

The publication of the CRMA means there is now a divergence in approach with the UK in sourcing critical raw materials for the net zero transition. Since publishing its Critical Minerals Strategy in 2022 and subsequent refresh in 2023, the UK has engaged with industry to accelerate domestic capabilities, increase collaboration with international partners, and enhance the responsiveness, transparency, and responsibility of international markets to improve the resilience of UK critical minerals supply chains.  

Access to such Critical Raw Materials has usually been subject to complex, lengthy, and often opaque supply chains, and countries’ reliance on them is not necessarily new. What has changed in the EU and UK is the importance and scale needed for new technologies required for climate action. A recent report commissioned by the UK Government, tasked with identifying supply risks of CRMs and the dependencies and vulnerabilities of key industrial sectors, found that the UK is at risk of high reliance on imports from countries that could make supply unreliable, is vulnerable to market volatilities, and suffers from poor material recycling rates, similar issues to those faced by the EU.  

Photo by Curioso Photography on Pexels

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