COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A secure and sustainable supply of critical raw materials in support of the twin transition
Date: 2023-03-16
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: circular economy, digital transformation, green economy, investment, raw material, security of supply, supply chain, third country, trade cooperation, value chain

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.3.2023  COM(2023) 165 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A secure and sustainable supply of critical raw materials in support of the twin transition       
 
 
I. 

Introduction  

The  EU  has  embarked  on  an  ambitious  industrial  transformation  to  achieve  a  green  and 
digital transition. Ensuring secure and sustainable supply of critical raw materials (CRMs) is 
at the core of EU’s political priorities for the twin transition. It is also essential for increased 
security capabilities in the defence, space sectors1.  

The Foresight study, published by the Commission, assesses the EU’s future needs for CRMs 
and  the  potential  supply  chain  bottlenecks  in  key  strategic  technologies  and  sectors.  It 
forecasts  an  unprecedented  increase  in  demand  for  the  key  materials  necessary  to  a 
successful twin transition. For onshore and offshore wind turbines, for example, demand for 
rare  earth  metals  is  expected  to  increase  4.5  by  2030  and  5.5  times  by  2050,  respectively, 
while the batteries powering our electric vehicles is forecasted to drive up demand for lithium 
11  times  by  2030  and  17  times  by  2050,  respectively.  The  analysis  also  reveals  the  EU’s 
heavy dependence on a very limited number of suppliers for all the strategic technologies in 
several  stages  of  their  supply  chains  and,  for  some  technologies,  throughout  the  complete 
value chain. 

While  demand  for  CRMs  has  never  been  higher  and  could  increase  ten-fold  in  the  next 
decade,  their  supply  is  confronted  with  greater  geopolitical,  as  well  as  environmental  and 
social risks and challenges.  

The  CRM  industry  is  complex  and  certain  types  of  projects  are  considered  high  risk 
investment,  in  particular  projects  at  the  exploration  and  extraction  stages.  In  addition  to 
geological  factors,  there  are  high  entry  barriers,  high  capital  costs  and  corresponding  risks. 
Above  all,  lengthy  and  uncertain  permitting  procedures  are  a  major  deterrent.  The  time 
between  the  start  of  a  project  and  the  materials  being  available  in  the  market  can  be  very 
protracted. 

For  most  CRMs,  production  is  heavily  concentrated  in  a  few  suppliers,  and  the  EU  relies 
heavily on imports. Excessive dependencies on single suppliers could disrupt entire supply 
chains, particularly as export restrictions and other trade restrictive measures are increasingly 
used  amid  intensifying  global  competition.  Russia’s  illegal  aggression  against  Ukraine 
showcased  how  untrustworthy  suppliers  can  exploit  and  weaponize  such  dependencies  to 
their advantage.  

The  EU  is  not  alone  in  facing  these  challenges.  Moving  towards  a  net-zero  and  digital 
economy  is  a  shared  interest  of  the  global  community.  Countries  like  China,  Japan,  the 
United States or South Korea have taken steps to secure their supplies, to process and refine 
CRMs  in  order  to  reduce  their  strategic  dependencies.  Resource-rich,  CRM-producing 
countries are also working at attracting partners with whom they can work to locally develop 
their CRM value chains sustainably.  

1  This  was  highlighted  notably  by  the  Communication  from  the  Commission  to  the  European  Parliament,  the 
Council,  the  European  Economic  And  Social  Committee  and  the  Committee  of  the  Regions  -  Roadmap  on 
critical technologies for security and defence (COM(2022) 61 final) 

 
 
                                                           
The  Commission’s  2008  raw  materials  initiative2  already  set  out  a  strategy  for  tackling  the 
issue  of  access  to  raw  materials  in  the  EU.  Building  on  this,  the  2020  Action  Plan3  put 
forward concrete actions to increase the EU’s resilience and open strategic autonomy4 . In the 
REPowerEU plan, the EU external  energy engagement proposed  concrete actions to  ensure 
access to critical raw materials to advance its energy transition5.  

But  the  game  has  changed  and  we  need  to  do  more.  The  Commission  is  therefore 
proposing  today  a  comprehensive  approach,  scaling  up  and  speeding  up  primary  and 
secondary raw materials supply in the EU. Through strengthened international engagements, 
we will work with our partners to diversify and integrate sustainable supply and value chains. 
With  a  view  to  building  mutually  beneficial  long-term  relationships  with  resource-rich 
countries, the EU will seek win-win partnerships in full complementarity with the Global 
Gateway  strategy.  While  these  partnerships  should  contribute  to  the  diversification  of  the 
EU’s  raw  materials  supply  chain,  they  should  equally  enhance  the  sustainability  and  value 
addition in the production of these resource rich developing and emerging countries.  

The EU should make the most of its reserves and develop exploration, extraction, refining, 
processing and recycling activities at home in full respect of our environmental ecosystems. It 
will  allow  Europe  to  boost  industrial  capacities  in  an  open  and  trade  friendly  manner,  with 
high  environmental  and  social  standards,  creating  quality  jobs  and  boosting  growth  while 
increasing our open strategic autonomy.  

In line with the 2020 Circular Economy Action Plan6, the EU is stepping up action to boost 
resource-efficiency  and  move  from  linear  to  circular  economy,  focusing  on  eco-design, 
recycling  and  substitution  in  order  to  make  products  as  resource  and  energy  efficient  as 
possible. This  will help to  reduce the need for  critical  raw materials  without compromising 
availability, performance and affordability of products, and to enable critical raw materials to 
be recycled and used again in new products. 

However, the EU will never be self-sufficient in supply of CRMs and will continue to rely on 
imports for a majority of its consumption.  

Consequently, the EU needs to  strengthen its  global engagement, to develop  and diversify 
investment,  production,  and  trade  with  reliable  partners  while  working  to  reduce  its 
dependence on highly concentrated supplies and address the vulnerabilities that result from it. 
The  EU  will  pursue  these  objectives  in  cooperation  with  third  countries  to  ensure  mutually 

2 Communication from the Commission to the European Parliament and the Council - The raw materials 
initiative: meeting our critical needs for growth and jobs in Europe (COM(2008) 699 final) 
3 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions Critical Raw Materials Resilience: Charting a Path towards 
greater Security and Sustainability (COM(2020) 474 final)  
4 See also COM(2021) 750 “2021 Strategic Foresight Report – The EU’s capacity and freedom to act”, where 
“Securing  and  diversifying  supply  of  critical  raw  materials”  is  listed  as  one  of  10  pillars  of  Europe’s  open 
strategic autonomy. 
5 Joint Communication to the European Parliament, the Council, the European Economic and Social Committee 
and the Committee of the Regions – EU external energy engagement in a changing world (SWD(2022) 152 
final) 
6 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions – A new Circular Economy Action Plan: For a cleaner and 
more competitive Europe (COM(2020) 98 final). 

2 

 
                                                           
beneficial  partnerships,  with  a  view  to  promoting  their  own  economic  development  in  a 
sustainable  manner  while  also  creating  secure,  resilient,  affordable  and  sufficiently 
diversified  value  chains  for  the  EU.  This  is  also  in  the  interest  of  EU’s  partners  as  it 
strengthens  EU’s  added  value  in  the  partnership.  For  instance,  in  case  of  disruptions  in 
partner  countries,  an  increased  capacity  of  EU  would  allow  it  to  better  support  its  partners 
and mitigate global supply challenges. 

Our CRMs initiatives reflect this ambition and are based on 3 pillars, which work together in 
a mutually supportive manner:  

(1) Developing the critical raw materials value chain in the EU 

(2) Boosting  the  diversification  of  supply  and  partnering  in  a  mutually  beneficial 

manner in support of global production  

(3) Fostering sustainable sourcing and promoting circularity 

II. 

Developing the critical raw materials value chain in the EU 

II.1. A Regulation dedicated to CRMs  

The  proposed  Regulation7  establishes  the  general  objective  of  ensuring  EU’s  access  to  a 
secure and sustainable supply of CRMs and contains measures to strengthen EU’s capacities 
throughout  the  value  chain.  In  order  to  ensure  that  the  measures  set  out  in  the  Regulation 
focus  on  the  most  relevant  materials,  a  list  of  Strategic  Raw  Materials  (SRMs)  has  been 
established. The Regulation contains measures throughout the value chain  so that, by 2030, 
EU’s capacity could  approach or reach at  least  10%  of domestic  SRMs  demand for mining 
and extraction (where EU’s reserves allow for this), at least 40% for processing and refining, 
and at least 15% for recycling.  If these levels are attained, they would help significantly in 
the required diversification efforts, with a view to ensure that, by 2030, not more than 65% of 
the  Union's  annual  consumption  of  each  strategic  raw  material  at  any  relevant  stage  of 
processing is from a single third country. 

The proposed lists of critical and strategic raw materials8 annexed to the Regulation will 
be reviewed and if necessary updated at least every four years. The lists will guide EU action. 
A first step in developing an EU internal capacity, is to better understand what resources are 
available,  by  developing  exploration  programmes  at  least  every  5  years  in  the  EU  and 
bringing geological knowledge up to date.  

The  EU’s  strategic  raw  materials  value  chain  will  be  strengthened  by  selecting  and 
implementing Strategic Projects which will cover the entire value chain including recycling, 
and which will contribute to increasing the EU’s capacity. The Strategic projects will notably 
benefit from streamlined permitting processes. Such Strategic Projects could also take place 
in third countries.  

7  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  a  framework  for 
ensuring  a  secure  and  sustainable  supply  of  critical  raw  materials  and  amending  Regulations  (EU)  168/2013, 
(EU) 2018/858, 2018/1724 and (EU) 2019/1020 (COM(2023) 160 final). 
8 Strategic raw materials are of high strategic importance, characterised by a potentially significant gap between 
global supply and projected demand, and are materials for which an increase in production is relatively difficult. 

3 

 
                                                           
Some Member States have already reviewed and modernised their raw material, mining and 
permitting frameworks. The Commission encourages all Member States to assess whether 
their national and sub-national frameworks need updating to support a secure and sustainable 
CRM value chain. The Member States are encouraged to increase their permitting efficiency 
for  CRMs  projects  beyond  those  deemed  Strategic  Projects.  Member  States  are  also  called 
upon  to  adopt  national  programmes  designed  to  increase  the  circularity  of  the  CRM  value 
chains, including the recovery of CRMs from mining waste. 

Member  States  may  also  take  measures  for  upskilling  and  training  their  administrative 
staff  capacities  to  deal  with  the  streamlining  permitting  procedures,  leveraging  on  EU 
support opportunities for administrative capacity such as the Technical Support Instrument9. 
Other  measures  for  improving  the  administrative  capacities,  such  as  digital  tools  and 
streamlined workflows need to be also considered. To facilitate the exchange of information, 
the  Member  States  could  envisage  setting  up  voluntary  platforms  for  permit  granting 
authorities by providing best practices or technical support.  

Continued  efforts  are  needed  to  address  concerns  related  to  public  awareness  and 
acceptance.  Efficient  and comprehensive  public  consultation  processes and transparent  and 
constant  communication with  those concerned, including with  Indigenous  Peoples and with 
the public at large when applicable, can contribute to addressing these challenges. 

The  Regulation  also  establishes  a  mechanism  for  coordinating  the  monitoring  of  CRMs 
supply chains. The Commission together with the Member States will perform stress tests on 
strategic raw materials supply chains.  

The  Regulation  provides  measures  to  mitigate  supply  risks  that  could  impact  the  well-
functioning  of  the  Single  Market,  including  by  coordinating  strategic  stocks  of  strategic 
raw  materials  and  facilitating  Union  undertakings,  for  example  the  joint  purchase  of 
strategic  raw  materials.  These  will  be  closely  coordinated  with  the  foresight  analyses  and 
detailed technology supply chain assessments of the Commission. 

A Board bringing together the best expertise available in the European Commission and the 
Member  States  will  have  the  responsibility  to  analyse  and  monitor  markets,  assess  risks, 
advise  on  mitigation  strategies,  assist  with  strategic  projects,  facilitate  strategic  stockpiling. 
and to periodically discuss Strategic Partnerships. 

II.2 Financial support 

The  Strategic  projects  will  also  need  adequate  financial  means.  In  compliance  with 
competition  rules,  the  Regulation  proposes  to  bring  Member  States  and  the  Commission 
together  with  relevant  financial  institutions  to  discuss  private  sources  of  financing,  existing 
financial instruments and EU funds, and to facilitate off-take agreements.  

The Commission will work with  InvestEU implementing partners to seek ways to scale up 
support  to  investment  in  line  with  the  common  objectives  set  out  in  Regulation  (EU) 

9  Regulation  (EU)  2021/240  of  the  European  Parliament  and  of  the  Council  of  10  February  2021  (OJ  L  57, 
18.2.2021, p. 1) 

4 

 
                                                           
2021/52310  and  in  the  Regulation,  including  via  the  setting  up  of  blending  operations.  The 
InvestEU Advisory Hub can contribute to the build-up of viable projects. Private investment 
by companies, financial investors and off takers is essential.  

Under  the  Taxonomy  Regulation11,  the  Commission  is  empowered  to  compile  a  list  of 
environmentally  sustainable  activities  by  defining  technical  screening  criteria  for  each 
environmental  objective  through  delegated  acts.  As  a  follow-up  to  the  forthcoming 
environmental  delegated  act,  which  will  cover  recycling,  the  Commission  will  ask  the 
Platform  on  Sustainable  Finance  2.0  to  develop  taxonomy  criteria  for  mining  and  refining, 
building on the work started under the Platform 1.0, to be considered and later adopted by the 
Commission.  

Private financing alone may not be sufficient and the effective roll-out of projects along the 
critical raw material value chain may require public support, including in the form of State 
aid.  As  far  as  national  resources  are  concerned,  the  State  aid  framework  provides  ample 
possibilities to leverage private investments and to effectively roll-out CRMs-related projects. 
In addition, the Commission has recently adapted State aid  rules to allow further flexibility 
for the Member States to grant aid, including as regards production and recycling of critical 
raw  materials  related  to  key  net-zero  technologies.  The  aim  is  to  further  speed  up  and 
simplify the process, with easier calculations, simpler procedures, and accelerated approval, 
while limiting distortions to the Single Market and preserving cohesion objectives.  

The Commission will:  

  work  with  EIB  and  other  InvestEU  implementing  partners  to  seek  ways  to  scale  up 
support  to  investment  in  the  critical  raw  materials  supply  chain,  including  via  the 
setting up of blending operations, via encouraging them to build internal competences 
to foster funding for  investments in raw materials and assessing investment barriers 
in this industry. 

  ask the Platform on Sustainable Finance 2.0 to develop taxonomy criteria for mining 

and refining. 

II.3 Standardisation 

The  Commission  has  adopted  in  February  2023  Annual  Union  Work  Programme  for 
European  standardisation.  One  of  its  strategic  priorities  is  the  development  of  European 
standards for the exploration, extraction, refining and recycling of  CRMs, strengthening the 
EU  value  chain  and  EU  resilience.  Furthermore,  the  technical  requirements  for  treatment, 
including  recovery,  recycling  and  preparing  for  re-use  of  CRMs  need  to  be  supported  by 
standardisation actions. This would ensure that the technical rules are applied in a consistent 
way across the EU. 

At international level, European standardisation operates within an increasingly competitive 
global  context.  The  European  experts  and  national  standardisation  bodies  are  already 

10 Regulation (EU) 2021/523 of the European Parliament and of the Council of 24 March 2021 establishing the 
InvestEU Programme and amending Regulation (EU) 2015/1017 (OJ L 107, 26.3.2021, p. 30). 
11  Regulation  (EU)  2020/852  of  the  European  Parliament  and  of  the  Council  of  18  June  2020  on  the 
establishment  of  a  framework  to  facilitate  sustainable  investment,  and  amending  Regulation  (EU)  2019/2088 
(OJ L 198, 22.6.2020, p. 13–43) 

5 

 
                                                           
important contributors to the work of the International Organisation for Standardisation (ISO) 
and should assume an even more active role in related international standards setting work in 
order to ensure that EU principles and values underlying relevant EU legislation, as well as 
international  commitments, are reflected in  international  technical  standards on CRMs. The 
Commission  will  facilitate  the  exchange  and  coordination  between  the  Member  States,  EU 
standardisation  bodies  and  EU  industries  to  share  resources  in  support  of  international 
standardisation processes. 

In line with the EU Standardisation Strategy and the Union Work Programme for European 
Standardisation, the Commission will:  

  Ensure that the High-Level Forum on European Standardisation (HLF) includes also 

a specific work stream on CRMs as essential for a resilient Single Market. 

  Support the development of European standards of CRMs-related industrial processes 

used in the twin transitions, including for circularity activities.  

II.2. Having the necessary skills  

As  set  out  in  the  2020  Skills  Agenda,  to  remain  competitive,  the  EU  needs  a  workforce 
equipped  with  the  right  skills  for  the  green  and  digital  transitions.  The  establishment  of 
viable  CRMs  value  chains  in  Europe  cannot  take  place  without  the  proper  development  of 
skills  (geologists,  metallurgists,  mechanical  engineers,  mine  workers,  sorters,  recyclers  and 
also  high-tech  professions  relevant  for  the  sector  etc).  Considering  skills  transformation, 
where circularity will play a more dominant role in for example the battery value chain and 
processing,  reskilling  needs  are  becoming  more  and  more  prominent.  In  addition  to  the 
horizontal measures set out in the 2020 Skills Agenda, the success of the EU’s CRMs value 
chains will require specific sectoral skills policies. 

Member States are strongly encouraged to make use of available EU funding instruments, 
such  as  the  European  Social  Fund  Plus  (ESF+),  the  European  Regional  Development  Fund 
(ERDF)  and  the  Just  Transition  Mechanism  (JTM)  to  support  education  and  training 
measures to upskill the workforce across the critical raw material value chain, addressing the 
talents  gaps  identified  in  EU  regions12  The  Deep  Tech  Talent  Initiative,  budgeted  in  the 
context  of  the  new  European  Innovation  Agenda,  will  also  contribute  to  the  needed  skills 
transformation  with  a  pioneering  programme  that  aims  to  train  one  million  people  within 
European deep tech fields over the next three years. 

The Commission will: 

  Establish  a  large-scale  skills  partnership  on  CRMs  with  stakeholders  and  public 
authorities  under  the  EU  Pact  for  Skills  with  the  objective  of  rolling  out  successful 
education and training activities across the entire value chain. 

  Propose to establish a Raw Materials Academy as part of the Net Zero Academies, to 
develop  and  offer  training  and  education  programmes  to  reskill  and  upskill  a 
workforce for the upscaling of the critical raw material value chain in Europe. 

12 Harnessing Talent in European Regions – see 
https://ec.europa.eu/commission/presscorner/detail/en/ip_23_145 

6 

 
 
                                                           
II.6 Research and innovation  

Research  and  innovation  (R&I)  in  the  CRMs  value  chain  is  essential  for  developing 
knowledge, innovative solutions and highly sustainable processes, for exploration, extraction, 
processing, refining,  recycling,  resource-efficient  design, use  and  substitution. For instance, 
in wind generators, rare earth permanent magnets could be substituted with other components 
such  as  multi-polar  synchronous  generators.  Similarly,  platinum  group  metals  used  as 
catalysts  in  fuel  cells  might  be  partially  or  totally  substituted  with  other  metals  such  as 
nitrides,  carbide  or  chalcogenides.  The  development  of  advanced  materials  plays  an 
important role notably in substituting CRMs. Research results in these areas should also be 
taken up in future standards. 

Each  of  these  parts  of  the  value  chain  has  its  challenges  related  to  geological  occurrences, 
mineralisation  characteristics,  chemical  properties,  applications,  and  energy,  environmental 
and  social  performance.  Research  in  this  regard  is  needed  for  critical  and  non-critical  raw 
materials,  in  order  to  address  challenges  related  to  supply,  as  well  as  to  mitigate  demand 
growth  in  the  EU.  Actions  in  all  of  the  above  parts  of  the  value  chain  will  diversify  EU 
sourcing and ensure its sustainability. 

Under the Horizon Europe work programme (2021-2024), the EU has budgeted projects on 
exploration,  extraction,  processing  and  reuse,  recycling  and  recovery  amounting  to  470 
million euros.  

The Commission will: 

  Strengthen  deployment  and  uptake  of  existing  and  emerging  R&I  breakthroughs 
through the European Innovation Council and the European Institute for Innovation 
and Technology in line with the New European Innovation Agenda; 

  Present  a  Coordinated  Plan  of  Action  with  Member  States  on  advanced  materials, 
including  substitution  of  critical  raw  materials,  in  order  to  secure  R&I  investment 
levels commensurate with the challenge; 

  Develop a Strategic Implementation Plan via the existing stakeholder forum that will 

guide EU R&I priorities in the coming years. 

III.  Boosting  the  diversification  of  supply  and  partnering  in  a  mutually  beneficial 

manner in support of global production 

The EU will continue to rely on imports of raw materials to achieve its twin transition and for 
increased  defence  capabilities.  It  is  already  actively  working  on  a  broad  range  of  tools  to 
facilitate trade, investment and cooperation to open opportunities globally, thereby increasing 
the security and affordability of CRMs. Given the current challenges, to have a real impact 
the  toolset  should  be  deployed  simultaneously  with  interested  partner  countries.  Synergies 
must be sought between the various available tools to ensure a coherent approach and deliver 
effective  results  in  the  shortest  timeframe  possible,  notably  through  the  Global  Gateway 
strategy and  its  implementation,  leveraging  the EU’s and EU Member States’ financial and 
policy  instruments.  The  strengthened  coordination  of  all  EU  international  actions  will  be 

7 

 
 
 
ensured  with  the  creation  of  a  dedicated  working  group  on  external  actions  for  CRMs  in 
cooperation with existing relevant structures, notably those related to the Global Gateway. 

III.1. The CRM Club: Working together with interested partners 

Access to  a secure, affordable, and sustainable supply of  CRMs is a shared concern among 
many  partners  and  a  key  theme  in  many  intergovernmental  fora  (such  as  G7,  G20,  the 
International Energy Agency and the International Renewable Energy Agency) or initiatives 
such  as  the  Mineral  Security  Partnership13  or  strategic  partnerships  with  third  countries. 
Moreover,  international  cooperation  is  essential  to  counter  the  market  dominance  by  some 
and address the challenge of sustainability. 

The EU should complement and build on these various actions to establish a Critical Raw 
Materials  Club  bringing  together  consuming  and  resource-rich  countries  to  promote  the 
secure  and  sustainable  supply  of  CRMs.  The  EU  should  join  partners  in  promoting  the 
reliable,  commercially based, transparent  and  environmentally  friendly supply of CRMs.  In 
particular,  the  CRM  Club  should  foster  sustainable  investment  in  producing  countries  and 
allowing them to move up the value chain. 

The  Club  would  be  open  to  the  like-minded  parties  interested  and  willing  to  develop  the 
following actions, based on an agreed set of principles:  

Increasing market development monitoring and knowledge sharing 

 
  Enhancing exploration efforts  
  Enhancing an enabling environment conducive to sustainable investment 
  Shortening the time needed to bring investment projects to the market 
  Facilitating market access, through regulatory cooperation 
  Working together on promoting labour rights and socially responsible practises in CRM 

supply chains 

  Promoting  a  circular  and  sustainable  economy  that  works  across  borders  and  boosting 

high quality recycling capacities 

  Driving innovation in the sector to unlock new supplies 
  Delivering an efficient and coordinated approach to crisis preparation and response 

The  Commission  will  engage  in  discussions  with  potential  partners  interested  in  setting  up 
this  club.  Negotiations  between  the  EU  and  US  of  a  targeted  critical  minerals  agreement, 
announced  on  10  March  2023,  provide  a  basis  for  working  towards  a  broader  and  wider 
Critical Raw Materials Club. 

The Commission will: 

  Establish a critical raw materials club with partners to strengthen supply chains and 

diversify sourcing and reach out to all potential partners to set up this alliance. 

13  The  Minerals  Security  Partnership  (MSP)  was  initiated  by  the  US  in  2022  as  a  grouping  of  like-minded 
countries to share information on CRM developments in third countries, identify investment opportunities and 
co-invest  in  mining,  refining  and  recycling  projects  that  respect  high  environmental,  social  and  governance 
standards in partner countries as well as in ‘target countries’. 

8 

 
 
 
 
 
                                                           
III.2. Trade and investment agreements providing the framework and launching of second 
generation Sustainable Investment Facilitation Agreements  

Given  the  capital-intensive  nature  of  extractive 
and refining activities, economic operators need a 
business  environment  in  resource  rich  countries 
that  is  investor  friendly,  predictable  and  stable. 
Building  on  existing  multilateral,  plurilateral  and 
bilateral frameworks, the EU will further develop 
measures to achieve this objective.  

2022. 

In  December  2022,  the  EU  concluded 
negotiations  to  modernise  the  existing 
EU-Chile  Association  Agreement  on  9 
December 
The  Agreement 
contains  a  dedicated  Energy  and  Raw 
Materials chapter, which will contribute 
to providing better access to sustainable 
investment in critical raw materials such 
as  lithium,  while  supporting  Chile  in 
developing 
in 
particular  with  regard  to  renewable 
energy and hydrogen. 

First,  the  World  Trade  Organization  (WTO)  and 
its  multilateral  and  plurilateral  agreements  set 
out  the  general  framework  as  a  baseline  that 
guarantees  transparency,  predictability  and  legal 
certainty,  for  instance  through  provisions  related 
to tariffs, non-discrimination, or the prohibition of 
export restrictions. A plurilateral  agreement on  “investment  facilitation for development” is 
currently being negotiated. It will boost investment in developing countries including in the 
CRM sector, notably by making information on investment rules public and easily available, 
and reducing delays in obtaining government permits and approvals.  

its  green  economy, 

Second, the EU makes use of its bilateral agreements to deepen trade and investment links 
worldwide  and  diversify  supply  chains,  including  in  the  context  of  CRM  supply  chains, 
thereby enhancing the resilience of the EU’s economy.  

The  EU  already  has  the  largest  network  of  trade  agreements  in  the  world.  The  recent 
agreements with Mexico, the United Kingdom, New Zealand and Chile14 contain a dedicated 
Energy  and  Raw  Materials  chapter.  Negotiations  are  also  on-going  with  Australia  and 
Indonesia,  both  holding  significant  reserves  of  raw  materials  vital  for  the  energy  transition 
such as rare earth elements and nickel. 

The Commission will explore together with partners how to support their ambition to develop 
extraction, processing and recycling capacities. The Commission will address raw materials 
related  matters,  such  as  predictable  impact  assessment  procedures  or  non-discrimination 
treatment for investors in third countries in on-going negotiations and will consider whether 
to  renegotiate  some  existing  agreements  with  a  view  to  strengthening  disciplines  on  raw 
materials  trade  and  investment.  Special  attention  will  be  given  to  countries  in  Africa  who 
have great potential to supply raw materials and integrate further in CRM value chains to the 
mutual  benefit  of  the  two  sides,  including  those  implementing  Economic  Partnership 
Agreements (EPAs).  

The Commission will also pay special attention to sustainable investment and is committed to 
further  developing  Sustainable  Investment  Facilitation  Agreements  (SIFAs)15.  Second-

14 Chile is one of the world’s major lithium producers 
15  A  SIFA  covers  facilitation  of  all  types  of  investment,  in  all  sectors  of  the  economy,  at  every  stage  of  the 
investment  –  from  establishment  to  operation  –  and  intends  to  benefit  both  EU  businesses  and  local 
entrepreneurs  by  focussing  on  predictability  and  transparency  of  the  regulatory  framework,  streamlining  of 

9 

 
                                                           
 
generation  SIFA  agreements  will  also  include  provisions  on  sustainable  development  and 
additional  provisions  on  energy  and  raw  materials  and  establish  dialogues  to  support 
industrial  projects  and  local  value  creation  through  the  establishment  of  a  set  of  sectoral 
priorities  and  modalities  to  involve  the  private  sector.  The  EU  has  recently  concluded  its 
negotiations on a SIFA with Angola.16 Exploratory contacts are ongoing with Nigeria on such 
an agreement, and other countries may follow. 

Finally, it should be recalled that the vast majority of EU CRM imports (92% in value) do not 
pay  import  duties,  thanks  to  most-favoured  nation  (MFN)  tariffs  set  at  zero  or  to  trade 
agreements in force. The remaining CRM imports are covered by a tariff ranging between 2-
7% for unprocessed (e.g. unprocessed Magnesium: 5%) and 3-9% for a few processed goods 
(e.g. Processed Gallium: 3%). The Commission  will follow closely the impact  of tariffs on 
the  ability  to  import  CRMs  and  examine  requests  for  duty  suspensions,  in  light  of  the 
objectives  of  facilitating  the  diversification  of  critical  raw  materials  and  reducing  our 
dependencies. 

The Commission will: 

  Continue its  efforts to  sustain  and strengthen the  WTO, including  in negotiating the 

plurilateral agreement on ‘Investment Facilitation for Development’. 

  Use  its  expanding  network  of  Sustainable  Investment  Facilitation  Agreements  and 
Free  Trade  Agreements  to  support  the  ambition  of  the  EU’s  trading  partners  to 
develop  processing  capacities  and  create  win-win  partnerships,  such  as  with  Chile 
and Australia. 

  Follow  closely  the  impact  of  tariffs  on  the  ability  to  import  CRMs,  and  examine 

requests for duty suspensions. 

III.3. Bilateral strategic partnerships to turn investment opportunities into economic 
realities 

Given  the  urgency  of  enhancing  CRM  production  worldwide,  the  EU  will  enhance  its 
cooperation with third countries by stimulating sustainable investments in CRM value chains 
and  other  components  down  the  value  chain  and  turning  economic  opportunities  into 
mutually  beneficial  realities.  Strategic  partnerships  in  raw  materials  value  chains  are  an 
important tool to enhance such cooperation.  

Strategic  partnerships  promote  sustainable  growth  and  contribute  to  resilient  raw  materials 
and industrial value chains. Ultimately, partnerships leverage integration of the industrial and 
materials value chains between the EU and the partner country. These Partnerships pursue the 
following aims: 
(i) 
to integrate EU's raw materials value chains with that of the partner country, including 
cooperation  to  identify  Strategic  Projects  eligible  under  the  Regulation,  on  research  and 
innovation  and  sharing  of  knowledge  and  technologies  related  to  sustainable  exploration, 

authorisation  procedures,  establishment  of  focal  points  as  first  points  of  contact  between  investors  and  the 
administration and involvement of stakeholders like  non-governmental organisations, business and employers’ 
organisations and trade. 
16 Available on https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6136. 

10 

 
 
                                                                                                                                                                                     
to  promote  mutual  industrial  and  economic  benefits  through  an  increase  in  value 

to improve EU’s and partner country's regulatory frameworks, as well the capacity to 

extraction,  processing  and  recycling  of  CRMs,  substitution  of  CRMs  and  monitoring  of 
supply risks; 
(ii) 
enforce relevant rules;  
(iii) 
added in the production in third countries; 
(iv) 
to develop and improve international standards, including to ensure that they provide 
a high level of environmental and social protection and support their climate and environment 
related commitments;  
(v) 
value chain; 
(vi) 
(vii) 
For developing countries, the partnerships are built on in-country value-creation, supporting 
them to move up the value chain using the framework of the Global Gateway strategy.  

to work together on enhancing the resilience and sustainability of CRM supply chains; 
to increase training and skills related to the CRM value chain. 

to  mobilise  funding  for  development  of  infrastructure  required  for  the  raw  material 

Each  partnership  is  guided  by  a  roadmap  with  agreed  upon  concrete  actions  under  each 
pillar.  The  implementation  of  the  roadmap  is  monitored  on  an  annual  basis  and  can  be 
updated  with  new  actions  as  appropriate.  The  partnerships  and  respective  roadmaps  are 
developed  and  implemented  within  a  “Team  Europe  approach”,  encompassing  Member 
States and their industry and institutions. 

The first strategic partnership was established in 2021 in the framework of the EU–Canada 
Comprehensive  Economic  and  Trade  Agreement  (CETA).  It  has  already  resulted  in  EU 
investments in Canada in the areas of cathode active materials and offtakes for lithium, nickel 
and cobalt for batteries, as well as in Canadian CRM-related investments in the EU. 

A partnership with Ukraine was also signed in 2021. Ukraine is a significant global supplier 
of titanium and is a potential source of over twenty CRMs for the EU. Under the framework 
of  the  partnership,  a  Memorandum  of  Understanding  between  the  European  Bank  of 
Reconstruction and Development (EBRD) and the Ukrainian Geological Survey was signed 
in 2022. 

In November 2022, the Commission has signed strategic partnerships with Kazakhstan and 
Namibia.  

To  date  strategic  partnerships  have  been  agreed  with  countries  with  whom  the  EU  has 
negotiated or concluded a trade and investment agreement. Such agreements and strategic 
partnerships  are  in  fact  complementary,  offering  a  political  framework  and  concrete 
bilateral cooperation in the specific field of CRMs. For countries that do not have trade and 
investment agreements with the EU in force, the Commission will promote the objective of 
undistorted  trade  and  investment  when  negotiating  the  memorandum  of  understanding 
establishing  the  partnership.  The  Regulation  provides  for  the  CRM  Board  to  periodically 
discuss Strategic Partnerships in cooperation with Global Gateway structures. 

The Commission will: 

  Seek to expand the network of strategic raw materials partnerships 
  Promote the objective of undistorted trade and investment in strategic raw materials 

partnerships 

11 

 
III.4. Global Gateway – the mutually beneficial approach where the EU stands out 

The  EU  will  support  investments  in  infrastructure  projects  relevant  for  our  CRM  supply 
chains,  to  increase  global  supply  and  international  value  chain  integration  and  help 
diversification.  The  Global  Gateway  will  be  the  vehicle  to  assist  partner  countries  with 
concrete  projects  in  infrastructure  and  connectivity,  including  by  boosting  and  leveraging 
concrete private sector investments along the CRM value chain. 

Many of the world’s richest sources of CRMs are found in emerging markets and developing 
economies. The raw materials sector is important for many EU partner countries from both 
economic  and  employment  perspectives,  and  the  EU  is  committed  to  supporting  our 
partner  countries  to  move  up  the  value  chain.  Deploying  a  “Team  Europe  approach” 
between the EU, its Member States, and other relevant actors (such as Development Finance 
Institutions,  the  European  Investment  Bank,  the  European  Bank  for  Reconstruction  and 
Development)  and  creating  synergies  with  the  European  private  sector,  some  CRM-related 
projects will be defined as priorities under the Global Gateway strategy17. Working with these 
partners,  raw  materials  projects  will  be  designed  in  a  way  to  enhance  in-country  value 
addition.  This  will  provide  the  targeted  partner  countries  with  a  high-quality  and  scaled-up 
EU offer, aligning partners’ interests with EU interests, and will contribute to narrowing the 
global  investment  gap  in  the  global  CRM  supply  chains  while  boosting  competitiveness, 
sustainability,  and  security.  The  countries  with  which  the  EU  has  established  strategic 
partnerships would be considered with priority. 

In  light  of  promoting  sustainability  and  climate  action  in  the  raw  materials  supply  chain, 
sustainable  job  creation  and  the  promotion  of  decent  work  are  overarching  objectives  of 
Global  Gateway, to which investments  must actively  contribute.  This  includes attention for 
vulnerable groups that encounter specific challenges to enter the labour market as well as to 
serious  issues  like  child  labour.  Given  the  known  sensitivities  and  challenges  in  extractive 
industries,  the  EU  will  pay  particular  attention  in  providing  the  necessary  support  to  the 
authorities  of  third  countries  hosting  CRM  projects  in  order  to  reinforce  the  good 
governance  capacity  and  transparent  business  practices  in  this  sector.  In  doing  so,  the 
EU will seek to help them reinforce the legislative and enforcement framework to ensure that 
mitigating  measures  are  taken  to  minimise  any  adverse  impact  arising  from  extracting, 
refining  and/or  processing  activities  on  the  local  communities  or  on  climate  and  the 
environment. Orienting vocational education and training (VET) programs to develop skills 
needed to fulfil job opportunities that CRM interventions create is another important pillar of 
EU intervention. 

The Commission will: 

  Support  Global  Gateway  projects  in  sustainable  raw  materials  value  chains  with 
partner countries, while paying particular attention to ESG standards and local value 
addition. 

17 See https://www.eeas.europa.eu/eeas/global-gateway_en. 

12 

 
                                                           
III.5. Lowering the risk of investing abroad 

Besides  the  investment  guarantees  provided  under  the  European  Fund  for  Sustainable 
Development Plus, the EU will also seek to simplify access to trade finance for investment 
in  CRM  supply  chains  globally.  A  number  of  Member  State  export  credit  agencies 
(“ECAs”)18  have  de-risking  schemes  or  tools  to  support  investments  abroad  that  secure 
imports of critical raw minerals for off-takers in the respective Member State.  

Ongoing  work  towards  a  comprehensive  EU  export  credit  strategy  can  help  to  reinforce 
Member States’ action, by maximising EU influence and the effectiveness of official support 
provided, in particular where EU operators compete with third country actors.  

This will enhance coordination between external financial tools managed at the EU level, 
most  notably  climate  and  development  finance,  and  the  tools  of  Member  States’  relevant 
financial  institutions  including  export  credit  agencies  –  in  particular  in  the  context  of  the 
Global Gateway.  

A  possible  EU  Export  Credit  Facility  could  complement  the  operations  of  the  existing 
export credit agencies at Member State level, would increase the EU’s overall impact in this 
area and allow the use of official export credit support to leverage key EU policies, including 
in  the  field  of  CRMs.  Finally,  the  EU  is  supporting  work  to  create  incentives  in  the 
international framework governing official export credit support within the ongoing process 
of  modernisation  of  the  rules  of  the  Arrangement  on  Officially  Supported  Export  Credits, 
embedded  in  the  OECD.  These  incentives  would  allow  ECAs  to  support  with  more 
favourable  terms  transactions  involving  CRMs  used  in  technologies  that  significantly 
contribute to climate change mitigation.  

The Commission will: 

  Foster  enhanced  coordination  between  Development  Financial  Institutions  and 
Export Credit Agencies around raw materials projects to deploy new combined tools 
and ensure synergies, starting with pilots in strategic partner countries. 

  Work in the OECD to improve arrangements and work with EU Member States to set 
up an EU Export Credit Facility for inter alia supporting CRM supply chains abroad. 

III.6. Combatting unfair trade practices and pushing harder on enforcement  

Today, many governments have turned their attention to the development of the CRM sector, 
often  driven  by  industrial  as  well  as  geopolitical  objectives.  More  than  18,000  measures  of 
concern have been identified by the OECD as affecting  CRM trade at its different stages.19 
As demand for CRMs will increase in the future, the frequency and impact of such measures 
will likely increase accordingly, in the absence of global efforts to improve the situation. 

18 Known schemes are: Germany (https://www.agaportal.de/en/ufk-garantien/grundlagen-ufk/grundzuege-ufk); Sweden 
(https://www.ekn.se/en/magazine/guarantees/sweden-secures-supply-of-strategic-raw-materials/); France 
(https://www.bpifrance.com/products/strategic-project-insurance/); Finland (https://www.finnvera.fi/eng/products/export-
credit-guarantees/raw-material-guarantee) 
19 See https://www.oecd.org/trade/topics/trade-in-raw-materials/ 

13 

 
 
                                                           
This  could  threaten  security  of  supply  or  create  an  uneven  playing  field  that  undercuts 
companies’ competitiveness, not just for the EU but for all countries who depend on imports 
of  these  materials.  But  trade  restrictions  also  create  inefficiencies.  For  example,  export 
restrictions as a tool for stimulating local mineral processing do not pay off20.  

The Commission  is therefore  making significant  efforts to  create transparency on distortive 
policies  related  to  raw  materials,  by  financing  the  OECD  Database  on  export  restrictions21. 
This  is  a  key  first  step  in  raising  global  awareness  on  the  policy  concerns  brought  by  this 
issue,  especially  related  to  CRMs  necessary  for  the  energy  transition,  with  a  view  to 
addressing these issues in the WTO. 

The EU has already made use of dispute settlement in the CRM field. For instance, in 2012, 
the  EU  succeeded  in  an  arbitration  case  against  China,  who  had  to  remove  its  export 
restrictions on rare earths22. More recently, the EU also won a WTO dispute settlement case 
against Indonesia against an export restriction on nickel23. 

The  EU’s  track-record  to  address  unfair  practices  is  unambiguous.  The  Commission  will 
intensify enforcement to tackle the growing challenges in this sector and will address export 
restrictive  actions  taken  by  trading  partners  on  ore,  secondary  raw  materials  or  CRM 
containing  waste  in  a  resolute  manner.  In  addition,  the  Commission  will  also  continue 
protecting  the  EU  market  by  making  use  of  its  trade  defence  instruments  where  the  facts 
justify it, in full respect of its international and internal legal obligations. 

That  may  include,  should  the  Commission  receive  duly  substantiated  complaints  to  that 
effect,  initiating  investigations  to  examine  whether  trade  defence  action  should  be  taken  to 
protect  mining  and  processing  industries  which  could  be  prevented  from  establishing 
themselves in the EU because of unfairly traded imports. In such cases, the wider economic 
interest  of  the  EU  would  need  to  be  carefully  considered  to  ensure  trade  defence  measures 
would  not  disproportionally  harm  the  interest  of  other  downstream  industries  or  create 
distortions in the CRM supply chains. 

Furthermore,  in  certain  cases,  foreign  direct  investments  (FDI)  by  non-EU  investors  may 
pose  a  risk  to  security  or  public  order  in  the  EU  precisely  because  they  might  impact  the 
supply  of  critical  inputs  including  raw  materials.The  EU’s  framework  for  screening  FDI24 
provides an EU-wide framework through which the European Commission and the Member 
States can coordinate action to protect EU security and/or public order if these are threatened 
by  FDI.  This  can  include  screening  the  potential  effects  of  such  investments  on  supply  of 
critical inputs, including raw materials.  

20  Fliess,  B.,  E.  Idsardi  and  R.  Rossouw  (2017), "Export  controls  and  competitiveness  in  African  mining  and 
minerals  processing 
industries",  OECD  Trade  Policy  Papers,  No.  204,  OECD  Publishing,  Paris, 
https://doi.org/10.1787/1fddd828-en. 
21 Available on https://qdd.oecd.org/subject.aspx?Subject=ExportRestrictions_IndustrialRawMaterials 
22 See WTO DS431 China — Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum 
available on https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds431_e.htm 
23 See WTO DS 592 Indonesia — Measures Relating to Raw Materials available on 
https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds592_e.htm 
24 Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a 
framework for the screening of foreign direct investments into the Union (OJ L 79I , 21.3.2019, p. 1–14) 

14 

 
                                                           
Through the work of the Chief Trade Enforcement Officer, the Commission will: 

  Continue  its  enhanced  implementation  and  enforcement  efforts  of  the  relevant  WTO 
rules  and  of  the  EU’s  trade  agreements,  with  particular  focus  on  measures  that 
restrict access to CRMs. 

  Examine  whether  trade  defense  action  should  be  taken  to  protect  mining  and 

processing/recycling industries. 

IV. 

Promoting sustainability and circularity across the value chain  

Improved security and affordability of CRM supplies must go hand in hand with increased 
efforts to mitigate any  adverse impacts, both within the EU as  well as  in  third countries, 
with respect to labour rights, human rights and environmental protection. Efforts to improve 
sustainable development of CRM value chains also offers an opportunity to promote human 
rights, conflict-resolution and regional stability. This is part of the EU’s commitment towards 
developing mutually beneficial solutions with partners and supporting their own sustainable 
transitions. Since most of critical raw materials are metals, they could be recycled. This offers 
the  potential  to  move  to  a  truly  circular  economy,  in  the  context  of  the  green  transition. 
Recycling could become increasingly important, with substantial benefits in terms of security 
of  supply,  reducing  negative  impacts  associated  with  extraction,  and  creation  of  economic 
value.  Today,  however,  recycling  rates  of  most  critical  raw  materials  remain  low,  while 
recycling  capacities,  systems  and  technologies  are  often  inadequate  to  the  specificities  of 
these materials.  

Internally, the EU should therefore accelerate resource-efficiency action, in particular through 
ecodesign  requirements  and  swift  adoption  of  the  Ecodesign  for  Sustainable  Products 
Regulation. 

Efforts also need to be stepped up in assuring circularity of CRMs in the broad sense, again, 
both within the EU and internationally. Internally, the EU should aim at ensuring that its own 
recycling capacity is able to produce secondary materials covering at least 15% of its annual 
consumption, as defined in the Regulation.  

IV.1. Pursuing ongoing EU sustainability work  

Over  the  course  of  the  last  few  years,  the  EU  has  played  an  increasingly  important  role  in 
supporting and encouraging companies to conduct their business responsibly. The EU has 
introduced  a  comprehensive  mix  of  voluntary  and  mandatory  actions  to  promote  Corporate 
Social  Responsibility  /  Responsible  Business  Conduct  (CSR/RBC)  and  implement  the  UN 
Guiding Principles on  Business and  Human Rights  (UNGPs)  and the UN 2030 Agenda for 
Sustainable Development.  

To this end, in July 2021, the EU adopted Guidance on due diligence to help EU companies 
to  address  the  risk  of  forced  labour  in  their  operations  and  supply  chains,  in  line  with 
international  standards.25  The  Corporate  Sustainability  Reporting  Directive26  (CSRD) 

25  Guidance  on  due  diligence  for  EU  businesses  to  address  the  risk  of  forced  labour  in  their  operations  and 
supply chains – available at https://trade.ec.europa.eu/doclib/docs/2021/july/tradoc_159709.pdf.  

15 

 
 
 
                                                           
requires  all  large  and  all  listed  companies,  as  well  as  some  non-EU  companies  that  exceed 
certain thresholds for revenue generated on the EU, to report about their sustainability risks 
and  impacts  in  accordance  with  EU  sustainability  reporting  standards  to  be  adopted  by  the 
Commission. 

Another key examples of relevant EU measures are the EU Principles for Sustainable Raw 
Materials  and  the  Batteries  Regulation27.  Moreover,  the  Conflict  Minerals  Regulation28 
promotes mandatory supply chain due diligence as a tool to identify risks of contributing to 
armed conflict and other related severe human rights abuses in value chains of tin, tantalum, 
tungsten  and  gold  (3TG).  The  Regulation  builds  on  the  international  standards  set  by  the 
OECD  Due  Diligence  Guidance29  and  covers  EU  importers  of  3TG.  The  due  diligence 
requirements  also  indirectly  affect  (EU)  smelters  and  refiners  that  are  active  in  the  supply 
chains of EU 3TG importers.  

The  Commission  has  also  made  several  legislative  proposals  relevant  to  the  sustainable 
sourcing of CRMs. These include proposals for a Directive on Corporate Sustainability Due 
Diligence30,  for  a  Regulation  on  forced  labour31,  for  Ecodesign  for  Sustainable  Products 
Regulation  (ESPR),  for  a  Batteries  Regulation32,  for  a  Directive  amending  the  Water 
Framework  Directive,  the  Groundwater  Directive  and  the  Environmental  Quality  Standards 
directive33 and for a revision of the Industrial Emissions Directive (IED) 34.  

At  the  multilateral  and  plurilateral  levels,  the  EU  recognises  the  importance  of 
internationally  agreed  standards  to  ensure  predictability  for  businesses.  Responsible 
Business  Conduct  action  is  included  in  all  Trade  and  Sustainable  Development  (TSD) 
chapters via reference to international  standards.  The EU is also  active in the sustainability 
work  of  international  bodies  such  as  the  WTO,  OECD,  International  Labour  Organisation 

26  Directive  (EU)  2022/2464  of  14  December  2022  amending  Regulation  (EU)  No  537/2014,  Directive 
2004/109/EC,  Directive  2006/43/EC  and  Directive  2013/34/EU,  as  regards  corporate  sustainability  reporting 
(OJ L 322, 16.12.2022, p. 15–80) 
27  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  concerning  batteries  and  waste 
batteries, repealing Directive 2006/66/EC and amending Regulation (EU) No 2019/1020 (COM(2020)798 final) 
28  Regulation  (EU)  2017/821  of  the  European  Parliament  and  of  the  Council  of  17  May  2017  laying  down 
supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and  gold 
originating from conflict-affected and high-risk areas (OJ L 130, 19.5.2017, p. 1–20). 
29  OECD  Due  Diligence  Guidance  for  Responsible  Supply  Chains  of  Minerals  from  Conflict-Affected  and 
High-Risk Areas, https://www.oecd.org/daf/inv/mne/OECD-Due-Diligence-Guidance-Minerals-Edition3.pdf. 
30  Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  Corporate  Sustainability  Due 
Diligence and amending Directive (EU) 2019/1937 (COM(2022) 71 final) 
31 Proposal for a Regulation of the European Parliament and of the Council on prohibiting products made with 
forced labour on the Union market (COM(2022) 453 final) 
32  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  concerning  batteries  and  waste 
batteries, repealing Directive 2006/66/EC and amending Regulation (EU) No 2019/1020 (COM(2020)798 final) 
33 Proposal for a Directive of the European Parliament and of the Council amending Directive 2000/60/EC 
establishing a framework for Community action in the field of water policy, Directive 2006/118/EC on the 
protection of groundwater against pollution and deterioration and Directive 2008/105/EC on environmental 
quality standards in the field of water policy (COM(2022) 540 final) 
34 Proposal for a Directive of the European Parliament and of the Council amending Directive 2010/75/EU of 
the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution 
prevention and control) and Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste. 
(COM(2022) 156 final) 

16 

 
                                                                                                                                                                                     
(ILO) and the United Nations (UN). Through accompanying measures, the EU will support 
as much as possible the respect of EU sustainability legislation in our partner countries. 

In the context of the Critical Raw Material Club, the EU will work with its members on the 
development of international ESG principles. These ESG principles could then pave the way 
to the development of international ESG norms, preferably through international bodies such 
as  ISO,  ILO,  UN  or  the  OECD  and,  wherever  possible,  building  on  existing  international 
initiative. This covers human rights including labour rights as mentioned in UNGP 12. 

There  are  also  several  industry  oriented  international  initiatives  targeting  sustainable 
mining and raw material production.35 

For  CRMs  that  have  a  significant  environmental  footprint,  the  Regulation  foresees  the 
possibility  to  introduce  in  the  future  requirements  on  transparency  of  the  environmental 
footprinting  of  specific  raw  materials,  if  these  are  necessary  to  achieve  the  EU’s 
environmental goals. These would be subject to a thorough assessment of impacts, including 
consultations  of  stakeholders  and  third  countries,  and  take  into  account  scientifically  sound 
assessment  methods,  relevant  international  standards  and  possible  negative  effects  on  trade 
flows. 

IV.2. Proactively using our trade agreements to support sustainable development   

At bilateral level, all recently concluded trade and investment agreements have an ambitious 
Trade and Sustainable Development (TSD) chapter. These chapters aim to ensure that that 
economic  growth  goes  hand  in  hand  with  the  protection  of  human  rights,  decent  work,  the 
climate and the environment. TSD chapters bind trading partners to international agreements 
and standards and establish close cooperation amongst partners in the field of corporate social 
responsibility and accountability. The Commission has recently published a communication36 
setting  out  how  to  further  enhance  the  contribution  of  trade  agreements  to  sustainable 
development.  Furthermore,  some  recently  concluded  Energy  and  Raw  Materials  (ERM) 
chapters of EU Free Trade Agreements contain specific sustainability provisions. Finally, as 
noted above, strategic partnerships also set sustainability as an objective. 

IV.3. Circularity 

For  most  CRMs,  recycling  rates  are  currently  at  very  low  levels.  At  least  in  the  mid-term, 
increasing the recycling rates of waste containing CRMs, but also promoting efficient use and 
substitution of CRMs, offers a big potential to reduce dependencies, build value chains and 
create jobs locally (e.g. in the recycling industry, research on substitution, in repair shops).  

Following the example of the emerging industry for the recycling of battery raw materials in 
Europe,  other  CRM  recycling  technologies  need  to  be  supported  through  Horizon  Europe 
and  in  synergy  with  Member  States  R&I  programmes  and  scaled  up  from  lab  to 
commercialisation.  

35 See an overview of further initiatives provided in IEA, I. (2021). The role of critical minerals in clean energy 
transitions. World Energy Outlook Special Report, p. 240. 
36 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions The power of trade partnerships: together for green and 
just economic growth (COM(2022) 409 final) 

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While factors are specific to each raw material and its applications, there are some common 
challenges, such as the fact that products are often not designed to enable an easy removal of 
or  access  to  CRM-rich  components  (such  as  rare-earth  permanent  magnets),  and  there  is  a 
lack information on the presence and chemical composition of their components. Moreover, 
the  targeted  collection,  treatment  and  recycling  of  CRM-rich  products  and  components  is 
lacking.  To  address  the  challenges  above,  common  solutions  will  be  developed  at  the  EU 
level.  

Economic viability is a key challenge for certain recycling operations, in particular when it 
comes  to  CRM  recycling,  where  separation  processes  are  generally  more  complex  and 
recoverable quantities smaller than for the base metals. The growing availability of recyclable 
waste,  advances  in  recycling  technologies  and  new  business  models  should  decrease  costs 
over  the  coming  decades,  while  rising  prices  of  primary  raw  materials  and  a  certain 
willingness to pay for lower environmental footprint should reduce the viability gap further. 
However, there is  a need for substantial  financial  support  to  recycling projects,  considering 
their  innovative  nature  and  the  environmental  externalities  of  primary  raw  materials 
consumption.  

It is also important that waste and secondary raw materials can be shipped within the EU 
without undue burden. New rules on the shipment of waste, as proposed by the Commission 
in  2021,  will  facilitate  the  shipments  of  waste  for  recycling  through  digitalisation  and 
streamlined procedures. 

Circularity  initiatives  should  increasingly  be  pursued  internationally,  together  with  our 
trading  partners,  in  the  framework  of  a  strategic  partnership  or  a  free  trade  agreement  for 
example.  Areas  of  cooperation  include  regulatory  cooperation  and  creating  an  integrated 
market for materials to be recycled. 

The Commission will: 

  Propose  in  June  2023  a  revision  of  the  Directive  on  end-of-life  vehicles  to  include 
specific requirements for the design and end-of-life treatment of vehicles, with a focus 
on CRM recovery.  

  Provide recommendations to Member States on measures targeting small and CRM-
rich  consumer  electronics,  to  improve  the  return  and  take-back  of  used  and  waste 
mobile phones, tablets and laptops. 

  Propose  in  2024  the  inclusion  of  waste  codes  for  Lithium-ion  batteries  and 
intermediate  waste  streams  (“black  masses”)  under  the  European  List  of  Waste  to 
ensure their proper recycling within the EU.  

  Systematically  consider  as  part  of  the  implementation  of  the  EU  legislation  on  eco-
design37, performance and information requirements in new products and equipment, 
which  will  promote  the  substitution  of  CRMs  and  make  sure  that  they  can  be 
dismantled and recycled or re-used. 

37  Directive  2009/125/EC  of  the  European  Parliament  and  of  the  Council  of  21  October  2009  establishing  a 
framework for the setting of ecodesign requirements for energy-related products and Commission proposal for 
Ecodesign for Sustainable Products Regulation (COM(2022) 142 final) 

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  Harmonise  applicable  waste  management  rules  for  certain  waste  streams  with 
significant CRM recovery potential and assess the integration of CRM rich products 
into the EU waste legislation, which are currently not covered, such as wind turbines. 
  Review  the  Waste  Electrical  and  Electronic  Equipment  Directive38  to,  inter  alia, 
address CRM-rich equipment in provisions relating to information requirements and 
recovery targets. 

  Mobilise  up  to  200  million  euros  to  deploy  ten  additional  Hubs  for  Circularity  to 
substantially increase recovery and recycling of raw materials in the entire Union. 

V. 

Conclusion  

The EU must secure a sustainable, affordable and diversified supply of CRMs to succeed in 
its  green  and  digital  transitions,  which  go  hand  in  hand  with  just  transition,  as  well  as  to 
ensure  its  security  and  defence.  It  needs  to  do  so  for  its  long-term  competitiveness  and  to 
maintain  its  open  strategic  autonomy  in  a  fast  changing  and  increasingly  challenging  geo-
political environment. 

This can only be achieved by concerted internal and external action: strengthening domestic 
measures  as  well  as  reinforced  international  engagement  to  develop  win-win  partnerships 
with  third  countries.  It  is  only  this  way  that  the  green  and  digital  transition  will  become  a 
reality for all.  

38 Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and 
electronic equipment (WEEE) (OJ L 197, 24.7.2012, p. 38–71) 

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