In March 2023, the European Commission proposed a regulation on critical raw materials. With the European Critical Raw Materials Act, the EU aims to ensure the secure and sustainable supply of critical raw materials throughout the region, reducing its dependence on imported raw materials. In the proposed regulation, 16 “Strategic Raw Materials” (SRMs) and 34 “Critical Raw Materials” (CRMs) are added to the EU’s list of CRMs.
The term “critical raw material” refers to raw materials that are economically very important and have a high supply risk. It is expected that the demand for CRMs will increase in the coming years as critical raw materials are used in various applications. In 2030, the EU’s demand for lithium for batteries is projected to increase by 12 times, and by 21 times by 2050.
The majority of CRMs are sourced from outside the EU, primarily from China, which is the largest global supplier of CRMs. The EU relies on China for 100% of its heavy rare earth elements. Additionally, the EU obtains 98% of its boron supply from Turkey and 71% of its platinum needs from South Africa. To reduce dependence on third countries, the EU Council’s proposal sets voluntary targets for CRM consumption by 2030, covering extraction, processing, and recycling processes.
A new assessment of raw material criticality for the EU was conducted by the European Commission in 2023. A raw material is considered critical based on its economic importance and supply risk. A threshold of 1 is established for supply risk and 2.8 for economic importance. Materials that meet or exceed these thresholds, as defined in the proposed regulation, will be included in the list of CRMs. Following the enactment of the proposed regulation, the Commission would review the lists every four years to monitor and mitigate risks. Additionally, the Commission would monitor CRM supply risks and ensure that each SRM supply chain undergoes a stress test every three years. Furthermore, member states would be required to report the status of their strategic stockpiles annually to the Commission.
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FAQs:
What is SRM?
SRM stands for Strategic Raw Materials. These materials are crucially used in strategic technologies for green, digital, defence, and space applications.
What are the 2030 benchmarks for strategic raw materials according to CRMA?
