Without critical raw materials (CRMs), no green revolution can take place. And no green revolution can happen sustainably if Europe is not able to enhance its competitive edge and, at the same time, promote sustainable practices for the materials. This is how the European Commission intends to step-up its ambitions, with today’s (16th March) publication of the European Critical Raw Materials Act (CRMA).
This regulation will set the basis for a renewed European approach to the use of key materials, focusing on the extraction, processing, recycling, monitoring and diversification of critical ores, minerals and concentrates, while strengthening its international outreach to current and future partners.
Hydrogen technologies such as electrolysers and fuel cells are dependent on CRMs, thus their availability and future prices will be a crucial aspect affecting the speed at which the hydrogen market can grow.
Europe’s goal to produce 10Mtons of renewable hydrogen by 2030 will require more than 100GW of electrolysers capacity by 2030. This will increase demand for platinum group metals (e.g., platinum, iridium) and other base metals such as nickel and copper that may be subjected to shortages and price spikes due to competition with other clean tech sectors (electric motors, batteries, photovoltaic, wind…).
To tackle these challenges, the CRM Act is proposing:
• The establishment of a two-tier criticality list of materials: Strategic (SRMs, highest priority for the clean transition) and Critical (CRMs, other raw materials with considerable economic importance and supply risk, mild level of disruption.).
• EU targets for the extraction (10%), processing (40%) and recycling (15%) of ores, minerals, concentrates of SRMs by 2030 to take place in the European Union. Most importantly, the EU should aim to avoid excessive reliance on third countries suppliers, establishing a threshold of maximum 65% of imports on a single material from a specific external supplier.
• The possibility of granting the status of Strategic Projects to those with a demonstrated ability to bring meaningful contribution to EU security of supply of SRMs, a certain degree of technical feasibility and proof of sustainability practices.
• Strategic Projects to be treated as a matter of priority in their respective Member States, with quicker and streamlined permitting procedures. Timelines for approval shall not exceed 9-12 months for processing and recycling projects, and 21-24 months for extractions projects in Europe, according to the priority status.
• Enhancement of companies’ risk preparedness to supply chain shortages and disruptions, through periodical monitoring by the Commission and the national authorities. This procedure will apply mainly to large companies that manufacture strategic technologies in the Union and which consume significant amounts of strategic raw materials. Companies shall, every 2 years, perform an audit of their supply chain.
• In case of urgency and disruption of the international market, the EU can organise Joint Purchases on behalf of European undertakings.
• The European Commission will set an ad-hoc Platform to connect suppliers and offtakers for Strategic Projects, providing matchmaking opportunities. Companies will have the possibility to bid their supply/demand needs and find the right partners for concluding raw materials contracts.
• The overall process will be managed by the CRM Board, a joint institution composed of representatives from Members States and the Commission (chair). The Board shall advise and support Commission and Member States in relation to their actions to improve the security of the Union’s supply of critical raw materials.
The European Commission’s proposal on raw materials will act in synergy with the other pivotal elements of the Green Deal Industrial Plan, such as the Net-Zero Industry Act (NZIA). The package awards hydrogen and its related technologies, components and materials, the status of strategic importance for Europe’s competitiveness, energy security and resilience, in the path towards a net-zero economy.
Now it is time for the policymakers to act: the Regulation will begin a co-decision process, under the scrutiny of both the co-legislators of the European Parliament and the Council of the EU. As the CRM Act represents a matter of strategic importance for Europe and its competitive edge, the EU may table a quicker legislative process in comparison to other files relevant for hydrogen. The European hydrogen industry will have to wait at least until Q2 2024, when the CRM Act should finally be published and enforced throughout the EU.
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