Critical Raw Materials Act (CRMA): Council Adopts Negotiating Position

On the 30th of June, the Council of the European Union adopted its negotiating position on the Critical Raw Materials Act (CMRA), paving the way for the Council presidency to enter negotiations with the Parliament.

 TLDR: CMRA

The Critical Raw Materials Act, put forward by the European Commission in March 2023 seeks to ensure a sustainable supply for raw materials which play a vital role in various strategic sectors such as the net-zero industry, digital industry, aerospace, and defence sectors. The transport sector has called for action on the security of supply of critical raw materials, especially with regards to battery production for use in electric vehicles.

The Commission proposed several internal and external actions which would achieve its policy objectives.

For example, internally, the Act would set benchmarks for domestic capacities in the supply chain of strategic raw materials, require Member States to develop national programs for exploring geological resources, and promote adoption and deployment of breakthrough technologies related to critical raw materials. Additionally, the key pillar of the internal action is circularity and sustainability as the Act would propel Member States to adopt measures to improve the collection of waste rich in critical raw materials and ensure its recycling and reuse.

Externally, the Act, as proposed by the Commission, seeks to diversify imports, establish a Critical Raw Materials Club for like-minded countries to strengthen global supply chains, and improve strategic partnerships with third countries.

Overall, the Commission proposal established four objectives to increase the contribution of European raw materials:

  • at least 10% of the EU’s annual consumption comes from EU extraction.
  • at least 40% of the EU’s annual consumption comes from EU processing.
  • at least 15% of the EU’s annual consumption comes from domestic recycling.
  • not more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing to come from a single third country.

 

Lastly, the regulation also introduces the establishment of the European Critical Raw Materials Board, an advisory body, with the purpose of providing guidance to the Commission regarding the selection of strategic projects and other elements outlined in the regulation.

The Council’s Position 

The Council has put forth a series of enhancements to the European Commission’s proposal on raw materials policy, aiming to better accommodate the diverse situations faced by member states. While sharing the objectives outlined in the Commission’s proposal, the Council seeks to raise the level of ambition for processing and recycling capacity, expand the scope of strategic raw materials, and introduce more frequent updates to the list of critical and strategic raw materials. The following eleven suggestions are noteworthy.

Firstly, one of the key improvements suggested by the Council is an increase in the targets for processing and recycling capacity. The Council proposes raising the processing target from 40% to 50% and the recycling target from 15% to 20%. By setting higher ambitions in these areas, member states will be encouraged to invest in technologies and infrastructure that promote efficient processing and recycling of raw materials, ultimately contributing to a more sustainable and circular economy.

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Secondly, recognizing the significance of Bauxite/Alumina/Aluminium as strategic raw and critical materials, the Council suggests including them in the list. This addition reflects the growing importance of these materials in various sectors and emphasises the need for their sustainable extraction, processing, and use.

Thirdly, to ensure the relevance and accuracy of the list of critical and strategic raw materials, the Council recommends more frequent updates, suggesting that it be revised at least every three years instead of the current four-year interval. This revision will enable a timelier assessment of emerging raw materials and evolving market dynamics, allowing for proactive policy responses to address supply and demand imbalances.

Fourthly, the Council’s proposal also reinforces national measures on sustainability and circularity. It encourages the re-use of products with high potential for recovering raw materials and incentivizes the recovery of secondary critical raw materials from waste. Additionally, it highlights the importance of identifying extractive waste facilities where secondary raw materials can be recovered and promoting magnet recovery from products at their end of life. These measures align with the principles of the circular economy, minimising waste generation and maximising resource efficiency.

Fifthly, recognizing the administrative diversity among member states, the Council proposes the establishment of designated contact points to facilitate communication and collaboration between project promoters and relevant authorities. Member states would have the flexibility to designate one or several contact points, ensuring efficient coordination and support. A centralised web portal could be created to provide project promoters with easy access to the designated contact points, streamlining administrative procedures.

Sixthly, to streamline permit procedures for strategic projects, the Council suggests simplifications and expedited processes. By reducing bureaucratic hurdles, member states can promote investment in projects of strategic importance, fostering economic growth and ensuring a reliable supply of critical raw materials.

Ninthly, the Council acknowledges that not all member states possess relevant geological conditions for conducting national exploration programs. In such cases, member states can provide evidence of this and be exempted from the obligation to carry out these programs. This provision recognizes the varying geological characteristics across Europe and ensures that resources are allocated efficiently and effectively.

Tenthly, to maintain a smoothly functioning internal market, the Council proposes stricter monitoring obligations related to competition and the free movement of raw materials. By ensuring fair competition and preventing market distortions, the European Union can create a level playing field for businesses and support a well-functioning market for raw materials.

Lastly, the Council seeks to clarify the roles of the Critical Raw Materials Board, aligning it more closely with similar bodies such as the Chips Act Board. It also suggests the creation of sub-groups within the board to address issues related to public knowledge and acceptance of critical raw materials projects, as well as measures to promote circularity, resource efficiency, and substitution of critical raw materials. These measures aim to foster dialogue and collaboration among stakeholders, ensuring that public concerns are addressed and promoting sustainable practices throughout the value chain.

What next?

The mandate that was agreed upon above formalises the Council’s stance for negotiations. It grants the Council presidency the authority to engage in negotiations with the European Parliament, which will commence once the Parliament establishes its own position, likely in October. The Council and Parliament aim to conclude negotiations by the end of the year.

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