Commission must act on critical raw materials strategy, say MEPs

Establishing a list of critical raw materials list to defend Europe’s security and competitiveness was set as an essential goal by President von der Leyen, and she delivered. But MEPs say now that the EU has the list, it’s time to act.

When she took office in December 2019, one of the first promises of European Commission President Ursula von der Leyen was to act on Europe’s critical raw materials dependency. Over the past five years of her term, von der Leyen has rolled out an expanding list of such materials, with an accompanying strategy given final approval by the European Parliament and Council last month.

The Critical Raw Materials Act defines a list of 17 strategic elements, such as cobalt and copper, and an expanded list of 34 critical materials, which includes coking coal. It sets a goal of mining at least 10% of these materials locally by 2030, with the EU processing 40% of them itself. 25% of their supply should be attained through recycling by that date.

The act also contains a red line: no single country can supply more than 65% of the EU’s annual consumption of any of these critical raw materials after 2030. It also contains measures to speed up permitting procedures for local sourcing, with new mines needing a decision within 27 months and new recycling and processing facilities needing a decision within 15 months.

No resting on laurels

During an MEPs’ debate at a recent event in Brussels, organised by the metals industry association Eurometaux, lawmakers stressed that the EU can’t rest on its laurels now that the act has been adopted.

“On critical raw materials we now have a good framework, but I think we need to do the next step,” said German Liberal MEP Jan-Christoph Oetjen. “The Commission needs to start designating strategic projects. We’ve heard there are 70 projects in the pipeline, so we need to decide where to go to bring this on track.”

“It’s not only a question of money, we need to talk about de-risking investments as well,” he added. “There should be EU and member state funds for critical raw materials, and they should act together – a fund with a revolving system so investments can be de-risked. I see that the companies are willing to invest, but then they shy away.”

The MEPs are preparing to head home to campaign in the EU election taking place in early June. President von der Leyen also hopes to seek re-appointment because of that election, with her centre-right European Peoples Party (EPP) predicted to secure the largest number of seats.

Industrial competitiveness

As the election has approached, she and her college of commissioners have pivoted to a message stressing industrial competitiveness, saying the Green Deal now has to transition to the next phase.

Oetjen welcomed this pivot. “We need to put competitiveness back on the top of the agenda, it has not been there, to be honest over the past five years of the von der Leyen Commission.” German EPP MEP Hildegard Bentele also welcomed the new focus. “We have to keep the industrial policy on the agenda,” she said at the debate. “We want to check everything against competitiveness, and I think we have set a good framework.”

However Belgian Green MEP, Sara Matthieu, cautioned that recent political rhetoric could put the EU Green Deal’s accomplishments at risk, and ignores the potential of working with rather than against the climate plan. “We as Greens believe that our industry has a central role to play in a climate-neutral economy,” she said at the debate. “We see an opportunity for the return of well-paid jobs for the working class and protecting our competitiveness.”

But she said a focus on Europe’s industrial competitiveness is also important. “The actions of the US and China have given us a major wake-up call, and that can turbo-charge our Green Deal. Both the US and China are acting as continental-sized economies, but our EU industrial policy, to the extent it really exists, is still multinational. We need more European coordination, and we need to put in place a high-level team led by a vice president in the Commission with the right competencies [on industrial policy].”

Metals means energy

Evangelos Mytilineos, CEO of Greek metallurgical company Mytilineos and president of Eurometaux, said at the event that urgent action on Europe’s competitiveness is needed. “Europe has been for centuries at the forefront of industrial development,” he said. “There’s no doubt that the scale is there – the European market is the biggest market in the world.”

“But in the metals business especially [effects of global competition] has been extreme because Europe unfortunately, as we all know, has probably the highest cost of energy in the world. And when we’re talking about metals, we’re talking about energy.”

He said that what the metals industry is looking for from the next Commission is urgent action that can secure Europe’s competitiveness, security, and autonomy in the industrial space in the coming years which may be turbulent. “What worries me most at the moment is geopolitics. It’s going to affect Europe and European business probably more than anybody else. We need support, and that’s not only a money thing.”

Mytilineos announced at the event Eurometaux’s Raw Materials 2030 report, which identified key challenges the industry is currently experiencing. 50% of Europe’s aluminium, zinc and silicon capacity was taken offline by the energy crisis resulting from Russia’s invasion of Ukraine.

US Inflation Reduction Act

The US Inflation Reduction Act subsidies will make it two to three times more expensive to build a European battery materials refinery in Europe than in the US, according to their calculations. And China’s recent export bans (increasing by four times including controls on gallium, germanium, and graphite) and “aggressive investment” has caused a 50% drop in certain battery material prices.

The report calls on Europe to open a minimum of 10 new mines, 15 new processing facilities and 15 new recycling facilities over the next five years, and to bring back online 20 curtailed facilities producing aluminium, zinc, and silicon. They also call for the EU to establish at least 15 new raw materials projects with a third country by 2030.

[By Dave Keating I Edited by Brian Maguire | Euractiv’s Advocacy Lab ]

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