Aiming to ensure a secure and sustainable supply of critical raw materials for the EU, the Critical Raw Materials Act (CRMA) has been formally adopted by the European Commission, as of 18 March 2024. This is in response to a growing global demand for resources, with EU demand for rare earth metals, for example, expected to increase by 700% by 2030.

Included in the CRMA are 34 types of “critical” raw materials, such as natural graphite and magnesium, along with 17 “strategic” raw materials, such as copper and lithium, which are deemed critical for the climate and digital transitions.

Benchmarks for consumption

In addition to highlighting the key raw materials, the CRMA also sets out three benchmarks for the EU’s annual consumption of these raw materials;

• 10% derived from local extraction;
• 40% to be processed in the EU; and
• 25% derived from recycled materials.

One central aim of these benchmarks is to increase and diversify the EU’s raw material supply, which currently sees many of these imported from a handful of countries, which include 100% of heavy rare earth metals imported from a single source. This would create more secure supply lines for EU countries and businesses.

A framework for strategic projects

Intended to help businesses reach these benchmarks, the CRMA has provided an additional framework for strategic projects. 

This includes:

• Introducing deadlines for permitting EU extraction projects, to allow projects to be recognised as strategic
• Requiring Member States to develop national exploration plans
• Increased diversification of the sources of imported critical raw materials, supported by the European Commission

The European Commission will also support diversification of the sources of imported critical raw materials.

What’s next?

As the European Parliament adopted the CRMA last month, it is now ready to be signed and published in the EU’s Official Journal (OJ), with this expected to take place in Q2 2024. The CRMA will become applicable on its entry into force, which will be 20 days after publication in the OJ.

How can you prepare?

Although the CRMA does not impose new requirements on businesses, businesses active in sourcing, processing or recycling critical raw materials, and businesses making use of critical raw materials in their production processes could consider how the CRMA could impact future projects and investments in the EU.

Read our briefing note on the CRMA and related initiatives for more details.