The demand for critical raw materials is set to increase as Europe and the world continue the green transition. For example, lithium from Chile is required for electric car batteries. In March 2023, the European Commission published the Critical Raw Materials Act, which seeks to secure diversified, affordable and sustainable supplies of critical raw materials. This Just the Facts looks at what critical raw materials are, the challenges facing the EU and key aspects of the Act.
What are Critical Raw Materials?
Critical Raw Materials (CRMs) are defined as “those raw materials which are economically and strategically important for the European economy, but have a high-risk associated with their supply”. They are found in washing machines, mobile phones, construction tools, parts in cars, airplanes and satellites.
For example: “Tungsten makes phones vibrate. Gallium and indium are part of light emitting diode (LED) technology in lamps. Semiconductors need silicon metal. Hydrogen fuel cells and electrolysers need platinum group metals.”
These materials are classified as CRM not because they are scarce, but due to several other factors. They are critically important to key economic sectors; they have a high-supply chain risk due to their concentration in particular countries; and there is a lack of alternatives due to their unique properties.
Critical Raw Materials and the EU
In response to the climate crisis and commitments under the April 2016 Paris Agreement, the EU has set out ambitious environmental targets.
The European Green Deal seeks to transition Europe to carbon neutrality by 2050, decoupling economic growth from resource use, and ensuring that no person or region is left behind in this transition.
The European industrial strategy, aims to achieve the “twin transition to a green and digital economy, make EU industry more competitive globally, and enhance Europe’s open strategic autonomy”.
However, “the energy transition is a materials transition” according to the European Commission. In March 2023, the European Commission’s Joint Research Centre published a CRM foresight study which states that “meeting the EU’s ambitious policy targets will drive an unprecedented increase in materials demand in the run up to 2030 and 2050”.
It found that compared to 2020, demand alone for lithium, which is used in the manufacturing of batteries for electric cars, will be 12 times greater in 2030 and 21 times greater in 2050.
Further, “the EU shows significant vulnerability along the supply chains examined”.
“On the one hand, the raw materials step is systematically critical for all technologies” while “on the other hand, the EU’s vulnerability tends to diminish along the supply chain [as it is] “reasonably strong in the manufacturing of the final technologies”.
However, for five technologies (batteries, solar photovoltaic panels, data storage and services, smartphones, tablets and laptops, and drones), the report found “vulnerability along the entire supply chain”.
It “highlights the challenges faced by the EU in order to guarantee an affordable and secure supply of the materials and components necessary to manufacture these technologies”.
In particular, “the EU is heavily dependent on third countries and in particular on China”. It accounts for a high level of both light (99%) and heavy (98%) rare Earth elements, in addition to magnesium (93%), lithium (78%), tungsten (69%), scandium (66%), bismuth (49%). The report states that “this dependence […] significantly increases the risk of disruptions due to environmental and geopolitical reasons”.
Table 1 (below) lists 30 CRM, the countries that the EU sources the most of these CRM from, according to the European Commission in September 2020, and the products they are used in.
EU Critical Raw Materials Act
On 16 March 2023, the European Commission published proposals for the Critical Raw Materials Act (CRMA). It seeks to secure diversified, affordable and sustainable supplies of critical raw materials.
Key provisions of the CRMA include strengthening all stages of the CRM supply chain in the EU, diversifying the EU’s imports of CRM to reduce strategic dependencies, and improving the EU’s capacity to monitor and mitigate the risks of disruptions to the supply of CRM.
The CRMA sets voluntary targets that aim to improve overall capacities for extraction, processing and recycling of CRM in the EU and guide diversification efforts.
These voluntary targets include that by 2030, at least 10% of the EU’s annual extraction should come from the EU; at least 40% of the EU’s annual processing should be sourced from the EU; and at least 15% of the EU’s annual recycling should be done in the EU. Furthermore, no more than 65% of the EU’s annual consumption of each CRM at any stage of processing can be from a single non-EU country.
The CRMA also proposes “to improve EU preparedness and mitigate supply risks [by the] monitoring of critical raw materials supply chains”, by exchanging information and greater coordination between Member States.
Reactions to the CRMA
Vice-President and European Commissioner for ‘A Europe Fit for the Digital Age’, Margrethe Vestager spoke of how “without a safe and sustainable supply of critical raw materials, there will be no green and industrial transition”.
A number of industry related groups have welcomed the CRMA. As reported here, the Spanish-German wind energy company Siemens Gamesa, one of the world’s largest manufacturers of offshore turbines, said that the CRMA “had the potential to foster responsible mining supply chains needed for European industry”.
Euromines stated that they also welcome the CRMA, but expressed doubts on how the voluntary targets will be met in practice, saying that “the Act is the description of an ambition”. While environmental NGOs, such as MiningWatch Portugal and the World Wildlife Fund raised concerns around the proposed timetables and ensuring “proper planning and appropriate environmental impact assessments”.
The CRMA will now undergo the ordinary legislative procedure (OLP), with the European Parliament and the Council of the EU entering into negotiations to propose amendments to the European Commission proposal. The average timeline for adoption under OLP between 2014 – 2019 was just under 18 months at first reading, and 40 months at second reading.
Table 1: The list of 30 CRM, the countries that the EU sources the most of these CRM from and the products they are used in.
|Critical Raw Material:||Source Country:||Source Country % of Total EU Use:||Generally used in:|
|1. Antimony||Turkey||62||Gives strength, hardness, and corrosion resistance to alloys, such as in lead-acid storage batteries.|
|2. Baryte||China||38||Used to increase the density of drilling fluids, principally for oil and gas exploration.|
|3. Beryllium||US||88||Aerospace (aircraft braking systems, engines, satellites, space telescopes), Automotive (anti-lock brake systems, ignitions).|
|4. Bismuth||China||49||Pharmaceuticals, sprinkler systems, solders, other alloys and pigments for cosmetics, glass and ceramics.|
|5. Borate||Turkey||98||Fertilisers, ceramics and enamel glazes, detergents for washing clothes, household clearning products.|
|6. Cobalt||DR Congo||68||Airbags in automobiles, drying agents for paints, varnishes and inks, dyes and pigments, ground coats for porcelain enamels.|
|7. Coking Coal||Australia||24||Used to produce coke, the primary source of carbon used in steelmaking.|
|8. Fluorspar||Mexico||25||Used to produce aluminum, gasoline, insulating foams, refrigerants, steel, and uranium fuel.|
|9. Gallium||Germany||35||Semiconductors, transistors, LED lights.|
|10. Germanium||Finland||51||Semiconductor chips, batteries, circuitry, and displies in mobile phones|
|11. Hafnium||France||84||Nuclear control rods, such as those found in nuclear submarines.|
|12. Heavy Rare Earth Elements||China||98||Smart phone screens, flat panel TVs, motors of computer drives, hybrid and electric car batteries.|
|13. Light Rare Earth Elements||China||99|
|14. Indium||France||28||Touch screens, flatscreen TVs, solar panels.|
|15. Magnesium||China||93||Car seats, luggage, laptops, cameras, power tools.|
|16. Natural Graphite||China||47||Ceramic materials, electrodes, refractories, batteries, by foundries.|
|17. Natural Rubber||Indonesia||31||Tires, components for machinery, household goods|
|18. Niobium||Brazil||85||High-strength steel, super alloys for transportation and infrastructure.|
|19. Platinum Group Metals||South Africa||71||Retinal implants, catalytic converters, spark plugs.|
|20. Phosphate Rock||Morocco||24||Fertilizers|
|21. Phosphorus||Kazakhstan||71||Fertilisers, animal feeds, rust removers, corrosion preventers, dishwasher tablets.|
|22. Scandium||China||66||Alloys for sporting goods, certain lightbulbs, baseball bats, lacrosse sticks, bicycle frames.|
|23. Silicon metal||Norway||30||Semiconductors, electronic components.|
|24. Tantalum||DR Congo||36||Electrolytic capacitors, corrosion-resistant chemical equipment.|
|25. Tungsten||China||69||Electrodes, heating elements, filaments in light bulbs.|
|26. Vanadium||China||39||Axles, crankshafts, bicycles, gears.|
|Critical Raw Materials added in 2020:|
|27. Bauxite||Guinea||64||Used to produce alumina, which is then used to produce aluminum.|
|28. Lithium||Chile||78||Rechargeable batteries for mobile phones, laptops, digital cameras, electric vehicles.|
|29. Titanium||China||45||Joint replacements (especially hip joints), tooth implants.|
|30. Strontium||Spain||100||Fireworks, flares.|