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New proposed EU regulation to secure a sustainable supply of critical raw materials

On 16 March 2023, the EU Commission published its proposal for a new Regulation establishing a framework for ensuring a secure and sustainable supply of critical raw materials (the Regulation).

Published: 4. April 2023

The green transition and the shift towards a more digitalized society and renewable energy have created a higher demand of certain raw materials, so called critical raw materials (CRM). CRM are a number of non-energy, non-agricultural raw material that are considered important, often indispensable, for many strategic sectors such as the digital industry, the health sector and the space and defense sector. Examples of CRM are lithium, cobalt, copper, nickel, aluminum, and phosphorus. Furthermore, the CRM are characterized as raw materials of high economic importance that are exposed to a high supply risk. As of now, the majority of the CRM are imported from third countries such as China and the Democratic Republic of Congo. Such reliance of a few countries the geopolitical risks may increase. Also, during the Covid 19 and in the light of the energy crisis in Europe due to Russia’s war against Ukraine, the structural supply dependencies and the potential damaging effects of this have been highlighted. Hence, an initiative to strengthen the different stages of the EU CRM value chain and diversify the import of such material, and thus, reduce strategic dependencies has with the Regulation been aimed to be reached.

These materials are of great importance for the EU and the internal market, and the Commission has therefore published the new Regulation with the aim of securing these raw materials and make sure of a more sustainable supply of these.

Below are a few important observations made of the Regulation:

  • The Regulation contain a list of thirty-four (34) CRM and sixteen (16) of these are so called “strategic raw materials” (SRM).
  • The Commission has proposed that ten (10) % of the annual consumption of SRM within the Union shall be from EU’s own geological resources by 2030.
  • Also, the Regulation sets out an aim that at least forty (40) % of the annual consumption of SRM within the EU shall be processed within the union, this including all steps for intermediate processing.
  • The Regulation also aims to reach a stage where at least fifteen (15) % of the annual consumption of SRM within the EU is recycled there, including all intermediate recycling steps.
  • The Regulation also includes a system of one stop shops for permits and the recognitions of Strategic Projects.
  • Furthermore, it is proposed to establish a new permit granting process, a fast track, for strategic projects, i.e. projects involving SRM, and that the granting process for such projects shall not exceed twenty four (24) months for projects involving extraction, and twelve (12) months for projects involving processing or recycling only. These expedited permit processes have been longed for by many players in the mining industry, not the least by the mining companies.

As a summery, it is very much welcomed that the EU Commission is putting the mining sector and the permit processes in focus and making an effort to reduce the dependence of third countries. This may not be enough, but it is at least a start and hopefully, the Swedish Government will follow and continue to enable mining companies and other parties in the mining sector to do business in Sweden and make sure to meet the always increasing need of CRM.

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