EU Adopts Critical Raw Materials Act to Safeguard Green and Digital Future

The European Union has adopted the Critical Raw Materials (CRM) Act, a landmark initiative to ensure a secure, sustainable, and resilient supply of essential raw materials. These materials are crucial for Europe's transition to a climate-neutral, digital, and secure economy, supporting sectors like renewable energy, digital tech, aerospace, and defence.

Why the Act Is Needed?

Europe is heavily reliant on raw material imports, often from single-source countries, leaving industries exposed to geopolitical risks and supply disruptions. With global demand surging—e.g., lithium demand is expected to rise 12-fold by 2030—the EU faces major vulnerabilities that could jeopardize its 2030 goals.

Key Goals for 2030

The Act sets ambitious self-sufficiency and diversification targets for strategic raw materials:

• Extraction: 10% of EU annual consumption
• Processing: 40%
• Recycling: 25%
• Diversification: No more than 65% from any one third country

Streamlining Supply Chains

To build secure and efficient value chains, the Act will:

• Fast-track permitting:

o 27 months for extraction
o 15 months for processing/recycling

• Support strategic projects with financing and regulatory simplification
• Require national exploration programs for geological resources

Enhancing Preparedness and Circularity

The CRM Act strengthens the EU’s ability to anticipate and respond to supply shocks through:

• Supply chain monitoring and stress-testing
• Strategic stock coordination
• Mandatory risk preparedness for large manufacturers

It also promotes sustainability by: • Boosting waste collection and recycling
• Investigating recovery from mining waste
• Setting standards for recyclability and recycled content, particularly in permanent magnets

Global Partnersh ips and Trade

To reduce dependency, the EU will:

• Expand strategic partnerships for sustainable sourcing
• Use the Global Gateway for infrastructure investment
• Create an EU export credit facility
• Address unfair trade practices related to raw materials

Governance and Oversight

The European Critical Raw Materials Board, comprising Member States and the Commission, will guide the implementation, advise on strategic projects, and coordinate partnerships with non-EU countries.

Part of the Bigger Picture

The CRM Act is a key pillar of the Green Deal Industrial Plan, complementing the Net Zero Industry Act to scale up clean technology manufacturing and reduce carbon dependency.

Reference: European Commission – Critical Raw Materials Act