Europe's Resources and the Critical Raw Materials Act

Originally presented in March 2023, the European Union has finally agreed on Critical Raw Materials Act, the European Union's response to the escalating demand for non-energy, non-agricultural raw materials critical to the Continent's economic stability. Aligned with the global transition to renewable energy and digitalization, the Act addresses the EU's vulnerability to supply risks due to heavy reliance on imports and concentration in select third countries.

The Act outlines several objectives, emphasizing the need to fortify the EU's critical raw materials (CRMs) value chain, diversify imports, monitor and mitigate supply risks, and bolster environmental protection through circularity and sustainability.

There are several provisions that will impact energy storage. The Act establishes benchmarks for increased domestic production by 2030, directly impacting the energy storage industry's raw material management. Also, the Act aims to enhance the internal market's functioning, emphasizing materials crucial for energy storage technologies and promoting the availability of recyclable materials. Besides, it distinguishes between strategic and critical materials, listing essential components for energy storage like lithium, cobalt, and nickel.

The Act also streamlines permitting procedures for strategic projects, extending the scope to include materials substituting strategic raw materials and aligning with environmental standards. Besides, it emphasizes stock monitoring, risk assessment, and strategic planning for large companies involved in critical raw material-dependent technologies, such as energy storage.

From an environmental perspective, the Act encourages sustainable practices, this chapter prompts entities dealing with extractive waste to analyse critical raw material recovery, aligning with circular economy principles.

To conclude, the Critical Raw Materials Act is a crucial step for the EU in securing access to essential resources for a green and digital future. It is still early to assess whether the Act provision will have a dramatic impact, or vice versa if it will be considered too limited in the years to come. Nonetheless, the introduction of this Act represents a key moment for Europe – and a break from the EU’s past legislation on raw materials.