Following the recent ITRE vote on your INI report, you warned that there could no European Green Deal without access to critical raw materials. Can you expand on what you meant by this?
The European Green Deal is all about our target to be climate neutral by 2050, which has severe implications for our energy supply, our mobility, our industry and the way we build and renovate. This commitment by the EU is a game changer in many ways, and we are global pioneers in following a specific path of implementing targeted policies.
When I say, “there is no Green Deal without access to critical raw materials”, I want to underline the importance of the technologies required and the role that critical raw materials will play. A number of studies show that our demand will grow significantly.
For example, look at the current European Raw Materials Alliance Action Plan on the high-energy-density rare earth permanent magnets needed for wind power and electric mobility: Europe imports some 16,000 tonnes annually from China, accounting for 98 percent of the EU market.
“Critical raw materials are ‘critical’ for two reasons: their economic and strategic importance and the association with a high risk of supply chain disruption. So ‘critical’ is not necessarily a synonym for ‘scarcity’ - a popular misunderstanding”
Imagine if that supply were chain disrupted - which can easily happen in times of an unsteady geopolitical landscape, growing global competition not to mention the difficulties created by the COVID-19 pandemic. A lack of access to these rare earths puts the implementation of our ambitions at risk.
In what ways does your report improve on the European Commission’s Action Plan on Critical Raw Materials?
I think the Commission’s Action Plan provides a solid basis, but we need to push harder for concrete measures and to provide level playing fields and financing opportunities for industry, mining as well as recycling. Along with my colleagues, I am asking for the following additional actions:
- Creating an Important Project of Common European Interest (IPCEI)
- Creating an EU CRM Taskforce to address strategic mapping, assessing imports and exports, global supply and demand, monitoring supply and coordinating stockpiling
- Improving the timeliness, predictability and transparency of authorisation processes
- Providing (new) tools of funding to address - amongst other things - risk sharing
- Establishing stronger controls for key critical raw material waste streams, preventing illegal exports of waste products containing critical raw materials and guaranteeing that exported waste products are processed under conditions equivalent to the EU.
What exactly are critical raw materials? What are their uses and applications, and currently, how self-sufficient and secure are the EU’s materials supply chains for these materials?
Critical raw materials are ‘critical’ for two reasons: their economic and strategic importance and the association with a high risk of supply chain disruption. So ‘critical’ is not necessarily a synonym for ‘scarcity’ - a popular misunderstanding. The European Commission first published a list of critical raw materials in 2011 and updates it every three years.
Since 2011, the list has grown from 14 to 30 materials. It contains the more widely known minerals and metals such as lithium, magnesium or cobalt as well as less well-known materials such as rare earths, bauxite, scandium and tantalum.
The fascinating thing about critical raw materials is their broad use - this is why they have such an impact on many sectors and products. We need lithium for batteries, we need magnesium for lightweight vehicle concepts and hydrogen technologies, we need neodymium and dysprosium for permanent magnets for renewable energy such as generators for windmills, in robotics, electric vehicles, electronics and communication devices.
Currently, the EU only provides one percent of the raw materials needed for wind energy, less than one percent of those for Li-batteries, less than one percent for fuel cells, only two percent for robotics and only one percent of silicon-based photovoltaic assemblies.
How important is securing access to critical raw materials in delivering future policy initiatives such as batteries and semiconductors?
It is crucial. These are only two examples - no doubt important ones - but critical raw materials are so much more than batteries and semiconductors, they are to a certain extent the new ‘oil’ of the green industry.
You have called on EU governments to improve timeliness, predictability and the transparency of authorisation processes. Why?
The license to operate remains the top risk for disruption in the mining industry. That risk is a roadblock for the private investment needed to help the sector in its transition to climate-neutrality and to push for sustainable mining. Administrations need to act rationally and within realistic timeframes. I want to underline that we are under huge time pressure, as we have established ambitious CO2 reduction goals. We need to encourage, not discourage. those investors and producers who want to be active in Europe.
Why is risk sharing such a key issue for critical raw material sourcing, and what kind of new funding tools would you like to see introduced?
We have listed risk sharing as one possibility that could help to fund CRM projects. The main message that has been echoed by all political groups and stakeholders is that we need further funding, but this cannot be only from the public purse. The public money currently available needs to be allocated smartly, for example in the framework of the national recovery funds.
We would also like to see the IPCEI to support innovation under market failure conditions. We feel that existing instruments (EIB, EBRD, EC/EU instruments and funds) should be extended to, for example, the EIF, and strengthened to better match private funding.