European Parliament Approves Critical Raw Materials Act

September 19, 2023

The European Parliament has approved the Critical Raw Materials Act with a significant majority, aiming to reduce the European Union’s dependence on China for critical minerals and metals essential for green technologies. The EU seeks to increase its domestic capacity for these materials used in manufacturing solar panels, windmills, and electric car batteries. The regulation aims to diversify imports and ensure secure and sustainable supplies by 2030.

The EU also aims to increase its processing capacity and prioritize strategic partnerships with countries like Australia and Chile to diversify the supply chain. However, environmentalists have expressed concerns about permitting processes without addressing environmental standards. The law will undergo further discussions between the Council and Parliament for finalization.

Why is diversification of imports and supply chain considered important under this regulation?

Diversification aims to reduce the risk of supply disruptions, increase economic resilience, and enhance security by ensuring that no single country provides more than 65% of the EU’s annual consumption of critical raw materials.

What are some of the critical raw materials listed in the regulation?

Some of the critical raw materials include aluminum, cobalt, lithium, rare earth elements, and more, which are essential for manufacturing solar panels, windmills, and electric car batteries.

How does the regulation address the EU’s recycling capacity and environmental concerns?

The regulation emphasizes increasing the share of secondary raw materials within the EU’s consumption of strategic raw materials and aims to collect, sort, and process 45% of each strategic raw material contained in the Union’s waste, considering technical and economic feasibility.

What is the context for this regulation, and why is it particularly relevant now?

The regulation is proposed in response to the increasing demand for critical raw materials due to the rapid deployment of clean energy technologies. Additionally, the EU seeks to learn from supply disruptions caused by external factors, such as the Ukraine war’s impact on natural gas supply, to ensure a stable supply of critical minerals.

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