“Lithium and rare earths will soon be more important than oil and gas. Our demand for rare earths alone will increase fivefold by 2030. We must avoid becoming dependent again, as we did with oil and gas.”

These words from the European Commission President, Ursula von der Leyen, calling to address EU dependency on imported Critical Raw Materials by diversifying and securing domestic and sustainable supplies.

Demand for Critical Raw Materials (CRMs) is soaring because they’re needed for new clean energy technologies as the green transition progresses – and other strategic sectors such as digital, aerospace and defence. While CRMs are of high economic importance for Europe, they’re also highly vulnerable to supply disruptions, the very reason they’re on the EU’s designated CRM list.

At risk

To address this conundrum head on, the EU Critical Raw Materials Act came into force on 23 May 2024, with this clear message:

“Critical Raw Materials are of high economic importance for Europe while being also highly vulnerable to supply disruptions. Critical Raw Materials are confronted with a growing global demand, driven by the decarbonisation of economies…Without joint and timely action, a well-functioning single market, resiliency and competitiveness, European industries and EU efforts to meet its climate and digital objectives are at risk.”

The new rules

The new rules outline three goals for the EU’s annual consumption of raw materials:

  • At least 10% of the EU’s annual consumption for extraction
  • At least 40% of the EU’s annual consumption for processing
  • At least 25% of the EU’s annual consumption for recycling.

As a sign of urgency, the Act was adopted in record time – only eight months from its original publication.

From supply chains to value chains

This diversification to reduce dependency will now need a huge push to develop, invest, produce and trade with reliable partners. It marks a significant, deliberate move away from disparate, disjointed often distant supply chains towards more cohesive, efficient value chains that are resilient and secure.

Circularity & sustainability

A lot of ‘value’ also lies in the sustainability aspect of European controlled Critical Raw Material supply. It empowers the Commission to establish rules for the environmental footprint of CRMs subject to various safeguards. This will help to increase the circularity and sustainability of CRMs placed on the EU market. And it allows customers to make informed choices.

Of course, the EU Critical Raw Material Act is just the first step. Now verbal pledges need to turn into tangible action. According to the World Economic Forum:

“Current projections suggest demand may rapidly outstrip supply. This presents opportunities for resource-rich developing countries as a source of future growth. However, sustainable development pathways will not emerge automatically, and significant investment facilitation and careful policy strategy will be required.” As the WEF notes, this will present opportunities for resource-rich countries. And it puts Norge Mineraler and its partners in a strong position, as we develop a new ecosystem for responsibly produced EU CRMs for our world-class resource of high-quality phosphate, vanadium and titanium.