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EU Council and Parliament Strike Provisional Deal to Reinforce the Supply of Critical Raw Materials

In a significant move toward enhancing Europe’s strategic autonomy, the Council and the European Parliament have reached a provisional agreement on the proposed regulation known as the Critical Raw Materials Act
14 November 2023

The Agreement

The EU framework aims to ensure a secure and sustainable supply of critical raw materials, addressing the vulnerability of Europe’s competitiveness due to dependencies on external sources. While the agreement is still pending formal adoption in both institutions, today’s political accord marks a crucial step forward. The agreement maintains the primary objectives of the original proposal but introduces key enhancements. Notably, aluminum is now included in the list of strategic and critical materials. The benchmark for recycling has been strengthened, and the permitting procedure for strategic projects has been clarified. Moreover, companies involved in the sourcing of strategic raw materials are now required to conduct a supply-chain risk assessment.

Ensuring the Supply of Raw Materials Locally and Globally

The proposed regulation by the Commission identifies 34 critical raw materials, including 16 strategic ones, setting targets to increase the EU’s contribution to these substances. The targets include 10% for extraction, 40% for processing, and 15% for recycling. The proposal calls for a streamlined permit procedure for strategic extracting projects, handled by a single national contact point. Additionally, it advocates for risk analysis, exploration plans by member states, increased investment in research, innovation, and skills, and environmental protection through the promotion of circularity and sustainability.
On the global stage, the regulation aims to diversify imports of critical raw materials, ensuring that no more than 65% of the Union’s consumption of each strategic raw material comes from a single third country.

Main Elements of the Agreement

The provisional agreement expands the list of strategic raw materials to include aluminum, bringing the total to 34 critical raw materials and 17 strategic raw materials. The compromise text recognizes synthetic graphite as a strategic raw material for three years, in addition to natural graphite already on the list. Furthermore, the agreement allows projects producing innovative raw materials to substitute strategic ones in relevant technologies to be considered strategic projects. Member states retain the right to object to the development of a project within their borders.

Realistic Benchmarks

While the provisional agreement maintains the benchmarks of 10% for raw material extraction and 40% for processing, it increases the recycling benchmark to at least 25% of the EU’s annual consumption of raw materials. The agreement also emphasizes a substantial increase in the recovery of raw materials from waste.

Promoting Technologies to Moderate Consumption

Co-legislators propose that 18 months after the regulation’s entry into force, the Commission should present a report on the estimated consumption of each critical raw material for the next three decades.

Points of Single Contact

Member states can designate one or several “points of single contact” at different levels (local, regional, or national) and stages of the value chain (mining, processing, recycling). These points will facilitate the permit granting process for strategic projects.

Permitting Procedure

The provisional compromise standardizes the timings of the permit procedure, with a total duration not exceeding 27 months for extraction projects and 15 months for processing and recycling projects. The environmental impact assessment process is streamlined, with the public consultation forming part of the total duration of the permit process.

Company Risk Preparedness

Large companies exposed to shortages of strategic raw materials in crucial technologies must regularly conduct a risk assessment of their supply chain. This assessment, presented to their board of directors, should map the materials’ sources, assess potential disruptions, and identify vulnerabilities to supply chain disruptions.

Next Steps

The provisional agreement now requires endorsement and formal adoption by both the European Parliament and the Council.

Conclusion of the Agreement during the EU Raw Materials Week

The provisional agreement between the Council and the European Parliament, marking a crucial step towards reinforcing the supply of critical raw materials, comes at a significant juncture. This agreement has been reached during the EU Raw Materials Week, currently underway in Brussels. The EU Raw Materials Week brings together key European and international players in the critical raw materials sector. It serves as a platform for discussions, collaborations, and the exchange of insights related to the challenges and opportunities in ensuring the secure and sustainable supply of critical raw materials.

Prima Sidera commitment in critical raw materials procurement strategies

Notably, Prima Sidera actively participates in the commitment to enhancing the safety and resilience of critical and strategic raw material supply chains. Prima Sidera’s involvement in the EU Raw Materials Week is part of an interaction strategy to play a leadership role at the European and international level.

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