New EU regulation adopted – a secure and sustainable supply of critical and strategic raw materials

On 12 December 2023, the European Parliament voted to adopt a new EU regulation, The Critical Raw Materials Act, which aims to ensure a sustainable and secure supply of critical raw materials (CRMs) within the EU. The act will enter into force in the beginning of 2024.

Published: 13. February 2024

The uncertain and unpredictable global situation, combined with the need for renewable energy, has highlighted the need to secure access to the increased demand of critical raw materials that the green transition requires. The materials in question are used in various fields of activity, such as within the defense, healthcare, battery manufacturing and the manufacture of renewable energy components, such as biofuels, solar electricity panels (photovoltaic systems) and wind turbines. The increased demand and increased competition have reinforced the need to maintain the independence within the EU while maintaining and strengthening more diversified cooperation between countries.

As we previously wrote about in spring of 2023, New proposed EU regulation to secure a sustainable supply of critical raw materials – Foyen, a proposal for a regulation for the establishment of a framework for the securing of critical raw materials was presented by the European Commission in March 2023. The proposal, which has now been adopted by the European Parliament, is not only aimed at simplifying for companies that are affected by bureaucratic obstacles. The regulation also aims to increase research and innovation which in its turn will lead to an increase in the production of materials that can replace strategic raw materials through, for example, extraction from waste products, and to promote the use of alternative materials. Thus, the aim is to limit the increased demand for critical raw materials in EU in order to make greater use of secondary raw materials as well as raw materials recycled for consumption in the EU. For this reason, the metals and minerals demanded will be recycled to a greater extent in the EU.

The proposal adopted by the European Parliament is principally in line with the proposal presented by the Commission in March 2023. However, some additions have been made, such as the addition of Aluminum to the Strategic Raw Materials (SRM) list and an increase in the percentage of the annual consumption of SRM to be recycled in the EU from 15% to 25%. Also, Member States shall focus on resource efficiency in order to limit the demand for critical raw materials. Streamlining the permit processes is part of the proposal that is sought after for the mining industry. According to the proposal, market participants should only have contact with an authority, a “One-stop shop”, that will guide these participants through the permit process. According to the proposal, improving the efficiency of permit processes should not affect the environmental and responsibility requirements imposed on companies.

One of the limitations set forth by the regulation regarding the improving the efficiency of permit processes is that only strategic projects are affected. A strategic project means that at least one of the 17 designated strategic raw materials is included. The project owner can apply to have their project classified as a strategic project. Today, there are a number of projects in Sweden that could be classified as such strategic projects.

The EU regulation, The Critical Raw Materials Act, is one of several welcome initiatives to simplify permitting processes and in this case enable access to natural resources and renewable technologies within the EU. Unfortunately, there are clear limitations in the regulation when, for example, it divides the projects that are to be covered by more efficient permit processes. Sweden is a leading mining nation from a European perspective and there are good conditions for a positive development of the mining industry.

However, in order for a positive development to take place, many of the complicated rules on permits must be simplified and streamlined. A great deal of this work needs to take place in Sweden through changes in domestic legislation. Let us hope the new EU regulation gives some impelling force to the necessary work of change.

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