The EU Council and European Parliament have agreed on a proposed framework for the secure and sustainable supply of critical raw materials, as set out in the Critical Raw Materials Act, likely to come into force in 2024.

Original proposals have been strengthened in key areas, including the addition of aluminium to the list of strategic and critical materials, an increased target benchmark for recycling (25% up from a proposed 15%), and clarification around permitting for strategic projects. The key tenant of the agreement remains the limiting of critical materials imports into the EU to a maximum of 65% of overall consumption.

In addition to aluminium being added to the EU list of strategic and critical materials, synthetic graphite has also been added for a provisional three-year period – largely in response to the continuation of China’s virtual monopoly on the supply of refined graphite material for battery anode production. However, the most significant amendment to the originally proposed measures is to increase the benchmark for recycled materials contribution to EU’s raw material consumption from 15% to 25%.

Project Blue comment: The measures agreed begin to align EU production, refining and recycling of critical materials with similar targets set-out in other Western markets, including the US’s Inflation Reduction Act and Canada’s Canadian Critical Materials Strategy. However, even with the proposed changes to permitting, targets to bring mining and refining to EU shores will be challenging – note the Serbian government’s actions in 2022 to revoke Rio Tinto’s mining permits for the Jadar lithium-borates project. Finally, the increased focus on recycled material would require a supply of process scrap and black mass material from retired batteries that is unlikely to be available in sufficient quantities from EU sources alone.