The EU wants to ensure a reliable and sustainable supply of critical raw materials such as lithium and silicon with a new set of regulations.
Representatives of the governments of the member states and the European Parliament agreed on a text for a corresponding regulation on Monday evening. In particular, it is intended to promote the refining, processing and recycling of critical raw materials in Europe in order to reduce dependence on countries like China.
According to the EU Commission, guidelines were also agreed for the various stages of the value chain. Among other things, they provide for increasing the EU’s processing capacity for critical raw materials so that at least 40 percent of annual consumption can be produced in the Union by 2030. In addition, at least 25 percent of annual consumption should be covered by EU recycling capacities.
In addition, the EU wants to set itself the goal of diversifying the EU’s external supply of strategically particularly important critical raw materials. The aim is to ensure that no third country covers more than 65 percent of the Union’s annual consumption – with the benchmark referring to all raw materials classified as strategic at every relevant processing stage.
Strategic partnerships
“With targeted economic incentives, we create real planning security for private investors – for example through central contact points for companies as well as quick and simple approval procedures with clear deadlines for national authorities,” explained Parliament Vice President Nicola Beer (FDP). A framework for strategic raw materials partnerships with third countries will also make the EU an attractive partner in geopolitical competition.
The rapporteur for the Christian Democratic EPP group, Hildegard Bentele (CDU), also called the regulation a “warning shot to China” because of its diversification goals. The country is currently still considered a very important supplier to the EU.
Dependence on China is a concern
When presenting its draft regulation in March, the EU Commission stated that critical raw materials were indispensable for a wide range of technologies for climate protection, but also for digital, space and defense. At the same time, however, the supply of the substances is accompanied by increasing geopolitical, ecological and social risks. The EU is dependent on several critical raw materials and often over 90 percent of the EU’s needs are covered by a single third country.
As an example, the EU Commission cited rare earths, which are used to build permanent magnets for the motors of wind turbines. According to the authorities, 100 percent of these were refined in China until recently. Another example of a critical raw material is lithium, which is used in batteries for electric vehicles and to store energy. According to the EU, demand for the light metal will probably increase twelvefold by 2030. Silicon, which is needed for the production of microchips, is also extremely relevant.
According to the Council of Member States, a total of 34 raw materials should be classified as critical. According to the agreement, the separate list of strategically important raw materials will initially have 17 entries. The deal now needs to be confirmed by the Council of Member States and the plenary session of the European Parliament. However, this is considered a formality.
