COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document 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
Date: 2023-03-16
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: aerospace industry, healthcare industry, import (EU), information technology industry, raw material, security of supply, surveillance concerning imports, sustainable development, value chain, waste recycling

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   EUROPEAN COMMISSION  Brussels, 16.3.2023  SWD(2023) 161 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Accompanying the document 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} - {SEC(2023) 360 final} - {SWD(2023) 160 final} - {SWD(2023) 162 final}  
 
 
GLOSSARY ..................................................................................................................................... 3 

1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ................................................. 5 

1.1.  Political context ............................................................................................................ 5 
1.2.  Legal context ................................................................................................................ 7 

2. 

PROBLEM DEFINITION ..................................................................................................... 11 

2.1.  What is the problem? .................................................................................................. 11 
2.2.  What are the sub-problems and their drivers? ............................................................ 13 
2.3.  How likely is the problem to persist? ......................................................................... 24 

3.  WHY SHOULD THE EU ACT? ........................................................................................... 25 

3.1.  Legal basis .................................................................................................................. 25 
3.2.  Subsidiarity: Necessity of EU action .......................................................................... 26 
3.3.  Subsidiarity: Added value of EU action ..................................................................... 26 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ................................................................. 26 

4.1.  General objective ........................................................................................................ 26 
4.2.  Specific objectives ...................................................................................................... 27 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? ....................................................... 28 

5.1.  What is the baseline from which options are assessed? .............................................. 28 
5.2.  Outline of the policy pillars ........................................................................................ 31 
5.3.  Description of the policy options ................................................................................ 32 
5.4.  Aspects  of  the  main  problem  tackled  through  actions  outside  the  scope  of  this  impact 

assessment ................................................................................................................... 52 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ............................................. 54 

6.1.  POLICY OPTION 1 ................................................................................................... 54 
6.2.  POLICY OPTION 2 ................................................................................................... 60 
6.3.  POLICY OPTION 3 ................................................................................................... 69 

7.  HOW DO THE OPTIONS COMPARE? .............................................................................. 72 

8. 

PREFERRED OPTION ......................................................................................................... 75 

8.1.  The economic and environmental model for the EU CRM value chain ..................... 76 
8.2.  REFIT (simplification and improved efficiency) ....................................................... 77 
8.3.  Application of the ‘one in, one out’ approach ............................................................ 77 

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? .................... 78 

ANNEX 1: PROCEDURAL INFORMATION ............................................................................. 80 

ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) ................................. 87 

ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................... 101 

ANNEX 4: ANALYTICAL METHODS ..................................................................................... 110 

ANNEX 5: OVERVIEW OF POLICY APPROACHES ............................................................. 115 

ANNEX 6: SME TEST ................................................................................................................ 142 

ANNEX 7: OVERVIEW OF POLICY MEASURES TAKEN BY THIRD COUNTRIES ........ 145 

ANNEX 8: INTERPLAY WITH OTHER LEGISLATION AND POLICIES ....................... - 147 - 

ANNEX 9: SCOPE OF MEASURES ..................................................................................... - 157 - 

 
 
 
ANNEX 10: EXTENDED INFORMATION ON THE PROBLEM SECTION .................... - 158 - 

ANNEX 11: EXTENDED INFORMATION FROM THE IMPACTS SECTION ................ - 193 - 

ANNEX 12: ESTIMATION OF INVESTMENT NEEDS ..................................................... - 199 - 

 
 
 
 
 
 
GLOSSARY 

Term or acronym 

Meaning or definition 

Raw materials 

A substance in processed or unprocessed state used as an input for the 
manufacturing of intermediate or final products, excluding substances 
predominantly used for the production of food and feed or as fuel for 
the production of energy; 

Critical  raw  materials 
(CRM) 

Raw Materials defined as critical in the regulation according to the 
proposed methodology (i.e. supply risks and economic importance); 

Strategic  raw  materials 
(SRM) 

Raw materials defined as strategic according to the criteria established 
in the impact assessment, e.g. taking account foresight element and 
strategic applications; 

CRM project 

Exploration 

Extraction 

Any planned facility or planned extension of an existing facility active 
in extraction, processing or recycling of critical raw materials; 

Mineral exploration is the process of searching for any mineralisation 
under  the  ground  that  can  be  commercially  extracted.  Exploration 
activities, such as mapping, will start over a large area and then target 
smaller and smaller areas; 

The primary extraction of ores, minerals and plant products from their 
original  source,  including  from  a  mineral  deposit  underground, 
mineral deposits under water, sea brine and trees; 

Metallurgical processing  The concentration of an ore or secondary raw material by physical, 
chemical  and biological  processes,  the  separation,  and  the  refining, 
including  the  modification  of  a  material’s  chemistry  for  specific 
valorisation;  

Refining 

Recycling 

Recovery 

Ore 

Step (mainly physical or chemical) of the metallurgical process where 
the  impurities  (or  unwanted  elements)  are  removed  from  the 
concentrated metal, metal alloy or metal compound; 

Any recovery operation by which waste materials are reprocessed into 
products,  materials  or  substances  whether  for  the  original  or  other 
purposes. Recycling can be “closed loop” or “open loop”; 

Any operation the principal result of which is waste serving a useful 
purpose  by  replacing  other  materials  which  would  otherwise  have 
been used to fulfil a particular function, or waste being prepared to 
fulfil that function, in the plant or in the wider economy; 

A naturally occurring solid material from which a metal or valuable 
mineral can be extracted profitably; 

 
 
 
 
 
Mineral 

By-product 

Substitution 

Circular Economy 

UNFC  

A solid, naturally occurring inorganic substance which can contain a 
metal or metal compound of economic importance; 

Subsidiary material from ore in which other materials are dominant. 
By-products  are  extracted  in  processing/refining  and  not  directly 
mined for;   

Methods to replace or reduce currently used CRMs in materials and 
products,  including  by  changes  in  composition  of  the  product  or 
replacement by other technologies; 

A model  of  production  and  consumption,  which  involves  sharing, 
leasing,  reusing,  repairing,  refurbishing  and  recycling  existing 
materials and products as long as possible. In this way, the life cycle 
of  products  is  extended,  their  use  is  optimised,  and  products  and 
materials are maintained in their highest value function;1 

The United Nations Framework Classification for Resources (UNFC) 
is  a  framework  that  provides  countries,  companies,  financial 
institutions and other stakeholders a tool for sustainable development 
of energy and mineral resource endowments; 

SDG 

Sustainable Development Goals; 

Offtake agreement 

A  long-term  contract  between  a  company  that  manufactures  or 
produce  a  given  resource  and  a  company  that  needs  to  buy  that 
resource.  It  displays  the  buyer’s  commitment  to  purchase  a  certain 
amount of the producer’s future output. 

1 Source: Circular economy: definition, importance and benefits | News | European Parliament (europa.eu) 

 
 
 
 
 
                                                           
1.  INTRODUCTION: POLITICAL AND LEGAL CONTEXT  

1.1.  Political context 

Raw materials are indispensable for the EU’s industry and stand at the very beginning of each value chain. 
Amongst the non-energy, non-agricultural raw materials that are assessed by the European Commission, some 
are defined as critical based on objective criteria including their economic importance and their supply risk. 
Currently,  the  global  production  of  CRMs  is  highly  concentrated  in  few  countries  in  the  world,  both  at 
extraction and refining stages. The European supply of CRMs is therefore highly dependent on third countries, 
not always like-minded ones (see section 2.1 What is the problem?). Critical raw materials (CRMs) are often 
produced and used in relatively small quantities2 but have special characteristics3 that make them essential 
ingredients  for  products  in  strategic  areas  such  as  renewable  energy,  digital,  aerospace  and  defence 
technologies. Well-known examples include the rare earths elements found in the permanent magnets used to 
manufacture wind turbines motors, lithium used for batteries, and silicon used for semiconductors. 

Textbox 1: The EU List of Critical Raw Materials and the concept strategic raw materials 
The  Commission  carries  out  a  criticality  assessment at  EU  level  every  3  years,  starting  in  2011,  which 
showed an increasing number of critical raw materials: 14 in 2011, 20 in 2014, 27 in 2017 (based on a 
revised methodology) and 30 in 2020. The 2020 list was accompanied by a foresight study on strategic raw 
materials for strategic value chains 2030-2050. In 2023, the Commission presented the 5th assessment (based 
on 2016-2020 data for 85 screened raw materials) and developed the second foresight study on strategic 
raw materials for strategic value chains.  
The current CRM methodology covers a wide range of economic sectors and relies on two main criteria:  

  Economic importance (EI), based on the value added of corresponding EU manufacturing sectors, 

corrected by a substitution index; and  

  Supply risk (SR), based on supply concentration (at global and EU level, weighted by a governance 

performance index), corrected by recycling and substitution parameters.  

Raw materials exceeding the thresholds set for both two criteria are deemed to be at high risk of supply 
disruption and at the same time economically important, and therefore defined as critical.  

2023 CRMs vs. 2020 CRMs  

gallium  
germanium  
hafnium  
HREE  
lithium  
LREE  
magnesium  
natural graphite  
niobium  

antimony  
baryte  
bauxite  
beryllium  
bismuth  
borate  
cobalt  
coking coal  
fluorspar  
Legend:  
Black: CRMs in 2023 and 2020 ; Red: CRMs in 2023, non-CRMs in 2020 ;  
Strike: Non-CRMs in 2023 that were critical in 2020  

phosphate rock  
phosphorus  
PGM  
scandium  
silicon metal  
strontium  
tantalum  
titanium metal  
tungsten  

vanadium  
arsenic  
feldspar  
helium  
manganese  
copper  
nickel  
indium  
natural rubber  

2 All the Metals We Mined in 2021 in One Visualization (visualcapitalist.com) 
3 For example, rare earth elements have special conductive, magnetic and fluorescent properties; lithium is an important component 
of rechargeable batteries because of its high electrode potential. 

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It is proposed in the preferred policy option to complement this backward-looking criticality assessment by 
a forward-looking methodology focused on strategic applications. This would lead to a slightly extended 
critical  raw  materials  list  (including  besides  the  classically-defined  critical  raw  materials  also  such  raw 
materials that are projected to face significant future supply challenges while being essential to multiple 
strategic  sectors  –  such  as  copper,  nickel  or  aluminium)  and  a  shorter  list  of  strategic  raw  materials 
(including only those raw materials with the highest supply challenges and strategic importance). A set of 
general measures would apply to the list of critical raw materials while a set of more ambitious measures 
would apply only to the subset of strategic raw materials. 

In light of these applications, critical raw materials are key to enable the European industry to meet the political 
goals of the EU. The European Green Deal4, , the REPowerEU Communication5, the Joint Communication on 
Defence Investment Gaps Analysis and Way Forward6 and the Digital Strategy7 have all established objectives 
or  targets  to  achieve  the  green  and  digital  transitions  and  strengthen  the  EU’s  resilience  and  strategic 
autonomy, which depend on the availability of critical raw materials, while the European Commission has 
already  began  the  implementation  of  the  action  plan  set  up  in  the  2020  Communication  on  Critical  Raw 
Materials (see Annex 8 for additional details and lessons learnt).8 

In 2022, the European Council’s adopted the Versailles Declaration9, which called to “take further decisive 
steps towards building our European sovereignty” and toward “reducing our dependencies”. It called to secure 
EU supply of critical raw materials, particularly by building on the strengths of the Single Market. Similarly, 
the European Parliament called for an EU strategy for critical raw materials in its November 2021 resolution10. 
The  Conference  on  the  Future  of  Europe  also  recommended  for  the  EU  to  reduce  dependence  on  other 
countries for  critical  raw materials11.  Against  this  background,  the  President  of  the  European  Commission 
announced in her State of the Union speech in 202212 a new legislative proposal, the European Critical Raw 
Materials Act, notably to identify strategic projects all along the value chain and to build up strategic reserves 
where supply is at risk. The initiative forms part of the Commission Work Programme for the first quarter of 
202313. 

This  Impact  Assessment  supports  the  Commission’s  proposal  for  a  Regulation,  forming  the  core  of  the 
European  Critical  Raw  Materials  Act. This  regulatory  initiative  alone,  however, cannot  ensure  secure  and 
sustainable supplies of CRM for the EU economy. Strengthened efforts to diversify international trade and 
investment,  ensure  undistorted  international  markets,  the  promotion  of  human  rights,  high  social  and 
environmental standards in partnerships and cooperation with third countries, as well as increased research 
and innovation efforts to substitute critical raw materials and minimise the environmental impacts of resource 
extraction, and work on skills and societal acceptance will also be necessary. These aspects are not expected 

4 COM(2019) 640 final, COMMUNICATION FROM THE COMMISSION, The European Green Deal 
5 COM(2022)230 Communication REPowerEU Plan.  
6 JOIN(2022) 24 final JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE 
EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the Defence Investment Gaps Analysis 
and Way Forward 
7 COM(2022) 4388 final COMMUNICATION TO THE COMMISSION European Commission digital strategy Next generation digital 
Commission 
8 172 COM(2020) 474 - Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability 
9 Informal meeting of the Heads of State or Government, Versailles Declaration, 10 and 11 March 2022 
10 REPORT on a European strategy for critical raw materials - (2021/2011(INI)) 
11 REPORT ON THE FINAL OUTCOME May 2022, Conference on the Future of Europe (5. Recommendations collected, A stronger 
economy, social justice, and jobs) 
12 2022 State of the Union Address by President von der Leyen 
13 COM(2022) 548 final, Commission work programme 2023 

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to be part of the legislative proposal, but are developed in the accompanying Communication that forms part 
of the Act.  

1.2.  Policy context and non-regulatory actions 

The European Commission has in place a dedicated strategy since 200814, which aims to ensure a fair and 
sustainable supply of raw materials from global markets, within the EU and through resource efficiency and 
the recycling of secondary raw materials. This initiative launched the assessment of raw materials’ criticality 
every three years, starting in 2011 (c.f. textbox 1).  

In 2020, the Commission presented a dedicated action plan in the Communication on Critical Raw Materials15 
to develop resilient value chains for EU industrial ecosystems; reduce dependency on primary critical raw 
materials  through  circular  use  of  resources,  sustainable  products  and  innovation;  strengthen  the 
environmentally  and  socially  sustainable  responsible  domestic  sourcing  and  processing  of  critical  raw 
materials  in  the  European  Union;  and  diversify  supply  with  environmentally  and  socially  sustainable 
responsible sourcing from third countries, strengthening rules-based open trade in raw materials and removing 
distortions to international trade.  

1.3.  Legal context 

There is currently no regulatory framework aimed at creating a CRMs sustainable supply chain in Europe and 
hence increasing the resilience of the CRMs supply chain and reducing the supply risks s. However, a number 
of EU legal instruments lay down provisions that affect the EU’s supply of CRMs. Those instruments relate, 
among other things, to the conditions and procedures for EU-based CRM projects to obtain a permit, and to 
the treatment of waste containing CRMs. Similarly, some existing instruments affect the CRM production in 
third countries and the conditions under which the EU conducts trade in CRM with those third countries. Any 
efforts to improve the EU’s security of supply for CRMs considered in this initiative need to take into account 
and build on these existing rules and initiatives. These instruments are listed below and Annex 8 explains in 
detail how they relate to critical raw materials. 

Interplay with existing instruments 

  Firstly, a range of existing Directives include rules to structure Member States’ conditions and procedures 
for obtaining permits for EU-based projects along the raw material value chain: Strategic Environmental 
Assessment Directive (SEA)16; Environmental Impact Assessment Directive (EIA)17; Industrial Emissions 
Directive (IED)18; Habitats and Birds Directives19; Water Framework Directive20; Environmental Liability 
Directive21 

  Secondly, existing EU legislation on waste management includes rules both affecting the operation of EU-
based mines regarding the handling of extractive waste and influence the potential to recover and recycle 

14 EUR-Lex - 52008DC0699 - EN - EUR-Lex (europa.eu) 
15 COM(2020) 474 - Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability 
16 Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain 
plans and programmes on the environment 
17 Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2011/92/EU on the 
assessment of the effects of certain public and private projects on the environment 
18 Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions 
19 Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora and Directive 
2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds 
20 Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for 
Community action in the field of water policy 
21 Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to 
the prevention and remedying of environmental damage 

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critical  raw  materials  from  relevant  waste  streams:  Waste  Framework  Directive  (WFD)22;  Extractive 
Waste Directive (EWD)23; Waste Electrical and Electronic Equipment Directive (WEEE)24 ; End-of Life 
Vehicles Directive (ELV)25. 

  Thirdly,  a  number  of  EU  and  international legal instruments  lay  down  provisions  that affect  the  EU’s 
external supply of CRMs. Those instruments aim to ensure undistorted trade and investment in CRMs 
with third countries, such as bilateral trade and investment agreements, or to protect EU industries from 
unfair  competition  from  outside  the  EU,  such  as  trade  defence  instruments  (anti-dumping  or  anti-
subsidies)26, and WTO obligations. 

Finally,  there  are  EU  instruments  aimed  at  improving  sustainability  of  the  global  industry  and  materials 
imported into the EU, some of them of legislative nature such as the Conflict Minerals Regulation27. The EU 
has an extensive network of bilateral trade and investment agreements28 that cover trade and investment in 
raw materials through general rules covering all goods and services or dedicated provisions aimed specifically 
at  raw  materials.  The  modern  EU  trade  agreements  include  Trade  and  Sustainable  Development  chapters, 
highlighting  how  trade  can  be  an  important  driver  for  sustainable  growth  both  in  the  EU  and  in  partner 
countries.  

  Global Gateway is the EU plan for major investment in infrastructure development around the world. It 
will be used to deploy both soft and hard infrastructure. As such, Global Gateway will be instrumental to 
support investments in infrastructure projects relevant for our CRM supply chains, to increase global and 
EU supply and help diversification. The Global Gateway will be the vehicle to assist partner countries 
with concrete projects in infrastructure and connectivity, while boosting and leveraging concrete private 
sector investment projects along the critical raw materials value chain.  

Interplay with ongoing initiatives  

  The proposed Single Market Emergency Instrument (SMEI) includes in its scope critical raw materials, 
and its provisions, notably with regards to monitoring and stockpiling, can be activated in the vigilance 
mode and in the event of a Single Market emergency. Details regarding its interactions with the proposal 
assessed here are explained in the relevant sections, such as the problem section or section 5.2 and Annex 
10.  

  The proposed Batteries Regulation and Corporate Sustainability Due Diligence (CSDD) contain measures 
which when adopted will require companies to put in place human rights and environmental due diligence 
practices when, inter alia, sourcing critical raw materials from both the Single Market and the international 
markets.  

  The proposed revision of the Industrial Emissions Directive (IED)29 widens its scope to also cover the 

extraction and treatment of industrial minerals and metals.  

22 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain 
Directives  
23 Directive 2006/21/EC of the European Parliament and of the Council of 15 March 2006 on the management 
of waste from extractive industries and amending Directive 2004/35/EC 
24 Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and electronic equipment 
(WEEE)24 
25 Directive 2000/53/EC of the European Parliament and of the Council of 18 September 2000 on end-of life vehicles 
26 https://policy.trade.ec.europa.eu/enforcement-and-protection/trade-defence_en 
27 Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 ... and gold originating from conflict-
affected and high-risk areas 
28 https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/negotiations-and-agreements_en 
29 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/3. 

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  The Commission’s proposal for a Regulation on Forced Labour30 covers also CRMs, and so does the EU 

Strategy on Rights of the Child31.  

  The  proposed  Ecodesign  for  Sustainable  Products  Regulation32    will  establish  design  requirements for 
products put on the EU market with the aim, inter alia, of extending the lifetime of products, increasing 
recyclability  and  recycled  content,  and  making  information  relevant  to  circularity  and  sustainability 
available along value chains to businesses, consumers and authorities through Digital Product Passports 
based  on  digital  markers  and  identifiers,  thus  contributing  to  reducing  material  demand,  facilitating 
recovery of raw materials and increasing transparency and consumer awareness. 

  The proposed Regulation on nature restoration33 aims, among others, at covering at least 20% of the EU's 
land and sea areas by 2030 with nature restoration measures, and eventually extend these to all ecosystems 
in need of restoration by 2050. The proposed Regulation builds on existing legislation. When adopted, the 
Regulation should work in synergy with other policy initiatives and legislation. 

Regulatory gaps analysis 

The CRM Act would be the first piece of EU legislation dedicated to  CRMs. No other piece of legislation 
expressly targets the security of EU supply CRMs by introducing a dedicated monitoring, stockpiling and 
company risk preparedness system and contributing to the build-up of EU capacities along the value chain. 
The proposed Single Market Emergency Instrument covers some of these aspects, but most of its provisions 
only apply once vigilance or emergency mode has been triggered, and thus not address the problem in advance 
and structurally through a permanent CRM-centred mechanism. Environmental legislation ensures a high level 
of sustainability of CRM extraction and processing within the EU but is so far not complemented by measures 
that would encourage European industry to make use of the raw materials potential on EU soil as well as to 
further develop the processing and recycling stages of the CRM value chain. This initiative is expected to 
increase the share of such highly sustainable EU production. Waste legislation addresses the risks associated 
with  waste  and  generally  prioritises  reuse  and  recycling,  but  its  provisions  do  not  sufficiently  address  the 
challenges specific to CRM recovery (see chapter 2.2.2.5). 

Regarding sustainability, the Corporate Sustainability Due Diligence (CSDD) proposal, which covers CRM 
companies, would oblige companies to address adverse human rights and environmental impacts in their own 
operations, subsidiaries and value chains. It would apply on a company basis and ensure that adverse human 
rights and environmental impacts are monitored and addressed. The CSDD however would not apply on a 
product  or  material  level,  i.e.  it  would  not  allow  buyers  of  CRMs  to  see  and  compare  the  environmental 
footprint associated to the product/material they are buying. In the case of climate impacts, for example, a 
CRM  producer  may  be  in  full  compliance  with  its  legal  obligations  and  have  an  overall  decarbonisation 
strategy  in  place,  but  the  CRMs  it  sells  may  nevertheless  be  associated  with  higher  emissions  than  those 
produced  by  a  competitor  (e.g.  due  to  lower  ore  grades,  a  more  carbon-intensive  energy  mix  or  energy-
inefficient  production  processes).  Giving  a  buyer  transparency  over  this  may  make  him  more  willing  to 
purchase the more sustainable type of CRM, but the CSDD does not provide for this.  

Similarly, in the field of social impacts, the CSDD guarantees that CRM producers selling on the EU market 
respect the minimum standards imposed by international conventions, such as the prohibition of child and 
forced labour, but it does not incentivise compliance with higher standards, e.g. such developed by certification 
bodies (see Driver 3.1) on meaningful involvement of local communities and fair treatment of workers, in the 
production of a CRM.  

In addition, while product-level footprint requirement (such as the carbon footprint included in the proposed 
Batteries Regulation and potentially under the revised Ecodesign framework) take into account the impact 
associated with CRM production at the point when they are incorporated into the regulated products, there are 
many instances where CRMs placed on the market in the EU are not covered: First, when CRMs sold in the 

30 2022/0269 (COD) 
31 https://op.europa.eu/en/publication-detail/-/publication/bac6e66a-a3d9-11eb-9585-01aa75ed71a1/language-en 
32 Proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign 
requirements for sustainable products and repealing Directive 2009/125/EC. COM/2022/142 final 
33 COM(2022) 304 final. 

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EU  are  thereafter  incorporated  into  products  intended  for  export;  second,  CRMs  used  in  applications  or 
products other than the set of regulated products (e.g. even for the “battery raw materials” lithium and cobalt, 
half of their EU consumption is related to other applications, such as ceramics or steel manufacturing). While 
the latter may shrink over time with the addition of more Ecodesign measures, these are unlikely to come close 
to covering all CRM applications in the foreseeable future. Furthermore, the implementation of Ecodesign 
measures for specific products can benefit from the availability of data on the environmental footprint of the 
CRMs incorporated in them, such that environmental footprints on both materials and products can work well 
together.  

The Conflict Minerals Regulation addresses specifically four raw materials (tin, tungsten, tantalum and gold), 
two of which are critical, but its provisions are limited to diligence obligations on importers and smelters of 
these  materials,  with  the  narrow aim  of  preventing  their sourcing  from  contributing  to  armed  conflict  and 
forced labour. It does not allow for comparison of environmental footprint, and does not include any measures 
to increase EU capacities along the value chain or improve monitoring for these four raw materials.  

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2.  PROBLEM DEFINITION 

A more detailed description of the problem context, problems, and their consequences and drivers is included 
in Annex 10. 

2.1.  What is the problem? 

The  overarching  problem  this  initiative  aims  to  address  is  the  EU’s  lack  of  secure  access  to  critical  raw 
materials. Given the central importance of these materials to our green and digital transition, as well as critical 
sectors such as health and defence, a disruption in the supply of critical raw materials would have significant 
adverse consequences for the EU’s industry, security and the achievement of its political goals.  

A key component of this problem is that the EU currently relies almost exclusively on imports for many of 
these raw  materials34;  more importantly,  within  these  imports,  suppliers  are  highly  concentrated35,  and  the 
main  suppliers  are  in  many  cases  exposed  to  significant  environmental,  social  and  governance  risks36(see 
figure  1).  These  factors  and  the  economic  importance  are  in  fact  the  main  criteria  in  the  EU’s  criticality 
assessment (see textbox 1).  

In some cases, the supply share of one country is above 90%, for instance China for light rare earths, heavy 
rare earths, gallium and magnesium; Turkey for Boron.. For around a third of the minerals assessed in the 
criticality assessment, and half of the critical raw materials, EU supply is more concentrated than global supply 
(for bauxite, borate or manganese). This concentration expands along the value chain, with the processing 
stage being even more concentrated than the extraction stage for some materials, such as lithium, magnesium, 
or germanium. China controls 56% of the global capacity for refined lithium, 60% for refined cobalt, 58% for 
refined manganese39. In addition to the concentration of supply in single countries, some actors have expanded 
their dominance of the global value chain by gaining control economic activities and assets in third countries, 
such  as  China  controlling  cobalt  mines  in  Congo  (Chinese  shareholders  control  two  firms  in  Congo  that 
together account for 13.8% of the world output of cobalt 37 (c.f. further details in Annex 10 – context). 

This degree of concentration puts the EU’s security of supply at risk, as dominance over CRM supply chains 
has been used already in the past, through export restriction for instance, to leverage  the suppliers’ interest 

34 In fact, for 28 out of 87 individual materials or groups assessed in the 202” Study on the EU’s list of Critical Raw Materials, the 
import reliance is 100% at the extraction or processing stage, and above 80% for another 16 materials 
35 The share of the biggest supplier to the EU is 99% for the group of light rare earth elements (China), 100% for the group of heavy 
rare earth elements (China), 99% for borates (Turkey), 97% for magnesium (China), 79% for lithium (Chile) and 63% for Cobalt 
(DR Congo), source: Study on the EU’s list of Critical Raw Materials (2023): Final Report, European Commission 2023.  
36 See IEA (2021) report on Clean Energy Minerals, page 126-131.  
37 “Who controls the world’s minerals needed for green energy?” Luc Leruth (Tbilisi University) and Adnan Mazarei (PIIE), August 
9, 2022 

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over 

the  buyer 

country’s 

industry 

(c.f.  Annex  10,  Consequences  of 

the  problem).38

Figure 1: Share of top three producing countries in production of selected minerals and fossil fuels (IEA)39  

This high level of supply concentration today poses a risk in itself, which the EU is seeking to address through 
global  actions  to increase the  diversification  of its  industry’s  supply  (see Textbox  2,  in  section  5.1  on the 
baseline scenario). 

But even leaving supply diversification aside, the global market for CRMs faces significant challenges: The 
EU will require substantial additional amounts of critical raw materials for meeting the needs of the green and 
digital transitions, and in light of the increased defence needs  in response to Russia’s invasion of Ukraine. 
This will lead to vastly increased EU and global demand, while supply is constrained for several reasons (long 
project lead times, social resistance to increased extraction, limited circularity potential for key CRMs in the 
medium-term). At the global level, the International Energy Agency (IEA)’s 2021 Clean Energy Minerals 
report40 predicts that total mineral demand41 will increase by a multiple of between 2 and 4 times between 
2020 and 2040,42 and demand for battery-related materials such as lithium up to 42 times (different scenarios 
for demand expansion are assessed under textbox 3 in Annex 10.). This rise in demand creates a real risk of 
supply shortages and increased market volatility over the coming years.  As projections point to this future 
demand/supply gap, the expansion of primary and secondary production in the EU to ensure a higher level of 
self-reliance appear as an important way of mitigating the problem’s potential consequences. 

38 See IEA (2021) report on Clean Energy Minerals, page 126-131.  
39 IEA (2021): Clean Energy Minerals. The Role of Critical Minerals in Clean Energy Transitions – Analysis - IEA 
40 IEA (2021), The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris https://www.iea.org/reports/the-role-of-critical-
minerals-in-clean-energy-transitions 
41 Including chromium, copper, lithium, nickel, cobalt, manganese, graphite, molybdenum, platinum group metals, zinc and rare 
earth elements. 
42 Page 46 of IEA (2021): Clean Energy Minerals. 

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2.1.1. Consequences of the problem 

If the EU does not contribute to the required ramping up of CRM production globally by developing European 
sources, the EU’s reliance on highly concentrated imports might continue with the following risks for the EU 
economy (explained in detail in Annex 10):  

  Risk of geopolitical vulnerability   
  Risk of adverse environmental and social adverse effects   
  Risk of unforeseen disruptions to industrial supply chains  
  Risk of high and volatile prices delaying the green transition  

Risk of dominant CRM suppliers leveraging market power in downstream industries   

PROBLEM TREE  

-

2.2.  What are the sub-problems and their drivers? 

As stated above, the main problem relates to the overall lack of secure access to CRMs for the EU. In light of 
ongoing  international  actions  (see  textbox  2  in  section  5.1),  the  sub-problems  addressed  below  focus  on 
analysing the main impediments to the development of a competitive European CRM value chain, as well as 
on risk preparedness of offtakes and the sustainability of CRM sourcing. 

2.2.1. Sub-problem 1: Insufficient anticipation and mitigation of supply risks 

2.2.1.1. 

Driver 1.1: Lack of systematic monitoring and risk preparedness  

The recent experiences of Covid-19-related supply chain disruptions have created a rising awareness among 
EU  companies  of  the  need  to  develop  risk  management  tools.  Companies  in  the  open  public  consultation 

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(OPC) reported having suffered from the price volatility (34%), supply disruptions (29%) and supply shortages 
(22%) in their supply of CRM in the last 5 years, while only 4% reported not having experienced any supply 
problems. Their supply of CRMs is deemed as being more at risk than their supply of other inputs by 26% of 
companies,  with  only  3%  disagreeing43.  Considering  the  wider  issue  of  supply  chain  resilience,  there  is 
evidence that companies’ inventories increased in response to the disruptions brought about by the Covid-19-
related  supply  chain  disruptions  and  in  particular  the  chips-shortage.44A  survey  conducted  by  the  German 
Chamber of Industry and Commerce (DIHK) among its member firms in the summer of 2021 finds that 57% 
of companies across all sectors intend to increase their stockpiling in order to secure their own production 
capacity. 17% of companies reported the use of recycling and substitution.45 

However, risk management by companies might not be sufficient to address the growing challenges given the 
problem’s geopolitical dimension and the often complex and opaque value chains for CRM markets, which 
require a level of sophistication that most companies do not possess. In the OPC, 56% of respondents agree or 
strongly  agree  that  companies  would  benefit  from  public  monitoring  programmes,  with  only  3  %  of 
respondents disagreeing.  

At Member State level, only two governments have established institutions to monitor critical raw materials 
supply  for  their  industry:  Germany  (German  Mineral  Resources  Agency/DERA)46  and  France  (French 
Observatory of Mineral Resources for Industries/OFREMI)47. Other Member States have geological agencies 
and  expertise  in  ministries  or  advisory  bodies  but  these  do  not,  to  the  best  of  the  Commission  services’ 
knowledge, systematically monitor global markets and the risks affecting domestic raw materials consumers. 

At European level, the European Commission has developed the criticality assessment (described in textbox 
1) to periodically review global production shares, EU imports, recycling rates, applications etc. for a broad 
set of raw materials and identify those that are the most critical, based on data from the preceding 5 years.  The 
2020 criticality assessment was accompanied by a 2030/2050 foresight analysis of critical raw materials used 
in  strategic  sectors  and  technologies48.  These  and  further  studies  are  contained  in  the  Raw  Materials 
Information System (RMIS).49 The Commission also maintains several expert groups and networks involving 
experts, industry, civil society and national authorities to advise on its policymaking and to enable an exchange 
of information and best practices.  

However, none of these frameworks provide operational capabilities to monitor markets in real-time, identify 
risks in the short- to medium-term future or support companies in their risk management efforts, nor do they 
establish an operational framework for coordination.50 In the OPC, 53% of respondents agree or strongly agree 
that Member State authorities do not have in place sufficient monitoring mechanisms allowing them to assess 
supply  risks  and  anticipate  problems.  58%  agree  or  strongly  agree  that  Member  State  authorities  do  not 
sufficiently cooperate and coordinate in monitoring CRM supply chains. 

43 The other companies did not express an opinion on this question. 
44 Anecdotal: Chip Makers Stockpiled Key Materials Ahead of Russian Invasion of Ukraine - WSJ; Nintendo Appears To Be 
Stockpiling Raw Materials, Doubles Its 2019 Spending On Supplies | Nintendo Life; Comprehensive: New PMI Comment Tracker 
dataset reveals key insights into the global supply chain | S&P Global (spglobal.com) 
45 DIHK-Umfrage zu Lieferengpässen und Rohstoffknappheit 
46 BGR - Contact (engl.) (deutsche-rohstoffagentur.de) 
47 Launching of OFREMI: French Observatory of Mineral Resources | BRGM 
48 European Commission, Critical materials for strategic technologies and sectors in the EU - a foresight study, 2020 
49 Raw Materials Information System (europa.eu) 
50 The Single Market Emergency Instrument partially covers such tasks, but only applies when a significant disruption is expected 
(vigilance mode) and does not provide expertise on critical raw materials markets. (see Annex 10) 

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In addition, companies’ preparedness is mainly limited to large companies with experience and sophistication 
in managing CRM supply risks51. The costs of disrupted value chains for the wider economy can be massive; 
the insurer Allianz, for example, estimates that disruptions in the chips value chain in 2020 and 2021 cost EU-
based carmakers around EUR 100 billion.52 This is partly due to upstream producers not taking sufficiently 
into account the effects the disruptions of their inputs have on firms further down the value chain and therefore 
prepare for these situations on a level that is socially not optimal. Additionally, complex global supply chains 
make it harder for companies to spot risks earlier in the value chain, further aggravating the situation53. 

Member States’ preparedness to supply disruptions is also uneven. In response to a targeted consultation54, 
some reported the development of stockpiling systems to mitigate supply risks, rarely covering CRMs; most 
did not report any CRM-relevant stockpiles, whether because of confidentiality reasons or because they do not 
exist. Most Member States who replied to the questionnaire however supported further EU coordination on 
this matter (DE, EE, FR, PL, PT) to enhance their industry’s resilience, given the rising importance of CRM 
in  the  economy,  albeit  the  extent  of  the  EU’s  role  differs.  At  EU  level,  the  proposed  SMEI  contains  a 
mechanism to build national strategic reserves in the event of a threat/incident with potential to significantly 
disrupt  the  supply  chain  (Single  Market  emergency).  Nonetheless,  there  is  no  permanent  assessment  and 
stockpile coordination specific to CRMs, which is a policy gap given the need for enhanced preparedness. 
Indeed, alike regular monitoring, risk assessment and stress tests, mitigation strategies such as stockpiling of 
CRMs (or diversification of suppliers when feasible) are considered as a way to cope with supply disruptions55, 
whose frequency is expected to rise in a context of foreseen supply/demand gaps56. 

2.2.2. Sub-problem  2:  The  EU  is  currently  not  making  full  use  of  its  domestic  critical  raw 

materials potential and lacks capacity in key stages of the value chain 

The  EU  is  currently  a  minor  player  in  terms  of  critical  raw  materials  production.  This  is  true  at  both  the 
extraction and the processing stage (see Annex 10 – context). While the quality and accessibility (given high 
population density and environmental protection areas in the EU) of geological occurrences (see Annex 10 – 
sub-problem 2) certainly plays a role in explaining the low investment into critical raw materials projects at 
the extraction stage, the same is not true for the later stages of the value chain: As discussed in textbox 4 of 
Annex  10,  at  the  processing/refining  stage,  energy  costs  are  the  determining  factor  for  location,  while  for 
recycling operations both energy costs and the availability of waste streams play a role. This is particularly 
evidenced by the case of China, which is dominant in processing for many critical raw materials without being 
the dominant country at the extraction stage (see figure 1 above). 

51 KÖSTER, H., NEUBERT, F. P., DIERKSMEIER, K., ADELMANN, L., LENTGE, H., SCHMIDT, P. (2022): Securing raw 
material supply: Benchmarking of measures of foreign manufacturing companies and recommendations for action. 
52 https://www.allianz.com/en/economic_research/publications/specials_fmo/Europe-automotives.html 
53 On academic level, the propagation of supply shocks and costs of supply chain disruptions are studied by Carvalho et al. (2021) 
with the example of the Great East Japan Earthquake of 2011. They show that complex economic interlinkages between affected 
areas and non-affected areas aggravate the magnitude of the shock, doubling it. Carvalho et al., Supply Chain Disruptions: Evidence 
From the Great East Japan Eartquake, in Quarterly Journal of Economics (2021) 
54 See Annex 2, Raw Materials Supply Group. 
55   IEA (2021), The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris  
56   Supply chain challenges: Wind Turbines and magnets” Science for Policy Brief, 1 July 2022, Joint Research Center, European 
Commission”. In “Criticalities in Supply Chains for REPowerEU Plan”, JRC132109 Note: The over-proportional increase in 
demand for rare earth elements stems from the fact that in particular the offshore and large-scale wind turbines contain large amounts 
of rare earth elements. 

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2.2.2.1. 

Driver 2.1: Insufficient exploration of European mineral resources  

Exploration is a precondition for any extraction project. As noted in Annex 10, exploration is a high-risk 
business  and  therefore  structured  in  stages  of  increasing  cost  and  certainty  on  the  mineralogical  and 
economical properties of the project.  

At global level, exploration spending (public and private) for non-ferrous metals57 is growing (after a slump 
in the early 2010s) and was estimated at USD 9.8 billion in 2019, while the share of EU was less than EUR 
300 million. Within this sum, three Member States – Finland, Sweden and Spain – accounted for 50% of the 
total spending.58 While the EU’s exploration budget is increasing, it remains very low compared to other world 
regions,  accounting  for  about  2%  to  3%  of  global  exploration  expenditure in 2010-2022  (see  Annex  10  – 
Driver 2.1) while the European continent represents around 7% of the Earth’s landmass.  

Since mining companies generally focus their exploration budget on a well-defined, small area covered by an 
exploration permit, public/general exploration is needed at regional level to define areas of mining interests 
for each specific mineral. Member States’ spending for these regional (or, for smaller Member States, national) 
surveys existed until the end of 1980’s and significantly decreased in the 90s onward.59  In addition, these 
surveys were focused on materials of economic interest at that time and not on the critical raw materials needed 
today for the green and digital transition or for resilience and security purposes. Previous regional exploration 
surveys were also limited to the first few meters of the underground for technological and budgetary reasons. 
Advances  in  technological  tools for  raw  material exploration  at the end of the 1990s (mainly  geophysical 
methods) have permitted to significantly enhance the knowledge on material resources potential, up to several 
hundred meters deep. The generalised lack of investments during the past decades on geological exploration 
by Member States (specifically on the critical raw materials and with the most advanced technology tools) has 
led to a general lack of knowledge regarding the true potential of critical raw materials in the EU to the present 
day. This impedes the further exploration by private companies on specific sites of mining interest and further 
exploitation.  

Despite a current scarce mining industry, Europe has a long history of mining industry that resulted in the 
creation of a large amount of mining tailings60 across the continent, mostly in closed mines. Since mining 
companies  generally  focused  on  one  specific  substance  only  (mostly  a  base  metal),  some  of  these  mining 
tailings have been recently recognised as major potential sources of critical raw materials across the EU.61 
However,  to  which  extent  and  for  which  elements  the  reprocessing  of  these  mining  tailings  could  be  an 
economically  viable  source  of  critical  raw  materials  remains  mostly  unknown  due  to  a  lack  of  proper 
exploration  of  mining  tailings  in  the  EU.  Several  Member  States  map  the  tailings,  for  instance  the  Polish 
Geological Survey has a dedicated web-tool showing identified sites.62 The challenge is then to identify the 
critical raw materials in each of these tailings and develop a technology and business model to extract them. 
Several pilot projects of reprocessing mining tailings from selected sites to produce critical raw materials are 
currently underway in the EU (notably under the EIT Raw Materials NEMO project63), but delivering the full 

57 A class of metals that includes most CRMs, as well as the precious metals gold, silver etc., and the base metals aluminium, copper, 
zinc etc. 
58 S&P Global Market Intelligence, 2019 
59 Regueiro y González-Barros, Manuel & Espi, Jose. (2019). The returns on mining exploration investments.. BOLETÍN 
GEOLÓGICO Y MINERO. 130. 161-180. 10.21701/bolgeomin.130.1.010.  
60 Tailings are the waste materials left after the target mineral is extracted from ore. 
61 JRC (2019): Recovery of critical and other raw materials from mining waste and landfills; pg. 93-98 of SCRREEN-D3.2-
Identification-and-quantification-of-secondary-CRM-resources-in-Europe.pdf 
62 https://cbdgportal.pgi.gov.pl/haldy/ 
63 Near-zero-waste recycling of low-grade sulphidic mining waste for critical-metal, mineral and construction raw-material 
production in a circular economy (h2020-nemo.eu)  

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potential of this source of critical raw materials would require a proper evaluation of the resources through 
specific exploration across Member States. 

2.2.2.2. 

Driver 2.2: Unpredictable and fragmented permitting procedures  

CRM exploration, mining, processing, refining and recycling, can have significant impacts on the environment 
and  local  communities.64  Therefore,  various  areas  of  EU  and  national  legislation  set  rules  related  to  their 
planning and operation (an overview of relevant EU law is included in Annex 8) to mitigate the risk of causing 
significant adverse environmental effects. Compliance with these rules is ensured through the obligation to 
obtain several permits before starting operations. The costs and time associated with associated procedures 
and  the  likelihood  of  obtaining  a  permit  are  key  considerations  underlying  CRM  investment  decisions. 
Currently,  the  unpredictability  of  the  length  of  national  permitting  processes  and  of  the  criteria  for  the 
assessments and documentation required are often reported as barriers to increased investment65: 

  For raw materials extraction projects, the MINLEX study showed that times to obtain a permit (related to 
all relevant rules, not only environmental) can vary between procedures from 3 months to 3 years.66 More 
problematically, outliers can be found (for CRMs, for example, ongoing cases can be found lasting up to 
4  years67).  One  reason  for  unpredictable  timelines  is  that  the  procedure  for  performing  the  necessary 
environmental  assessments  is  not  consistently  implemented.  The  average  duration  of  the  procedure 
provided for in the EIA Directive (for all projects in scope, including CRM projects), for example, was, 
according  to  the  most  recent  data,  approximately  11.6  months,  but  with  figures  ranging  from  5  to  27 
months.68   

  Similarly, differences can be observed in the structure of the procedure, with various levels of authorities 
(local, regional, and national) involved in this process. The “one-stop shop” concept allows applicants to 
interact with a single authority and facilitates efficient coordination among authorities. Although EU law 
already facilitates use of a “one-stop shop”, the MINLEX study showed that only some jurisdictions do 
so  and  that,  without  distinguishing  per  type  of  mineral,  an  average  of  3  authorities  were  involved  for 
exploration projects and an average of 4 authorities for extraction projects.69  

  Environmental assessment procedures are organised differently across Member States also in terms of 
content. First, the number of different environmental assessments required differs between Member States. 
Second, there is often a lack of clarity about the scope and level of detail required in the environmental 
assessment  leading  to  multiple  exchanges  and new  requests  between the developer  and  the  competent 
authorities.  

  Stakeholders  also  point  out  that  responsible  authorities  sometimes  lack  sufficient  expertise  and 
resources.70 It should also be noted that, in addition to the permitting procedure as such, judicial appeals 
can also lead to delays and often cause increased unpredictability.  

64 Mononen, Kivinen, Kotilainen, Leino (2022): Social and environmental impacts of mining activities in the EU. Study requested by 
the PETI Committee of the European Parliament. Social and environmental impacts of mining activities in the EU (europa.eu) 
65 For example, the length and complexity of permitting procedures was the main reason for the lack of private investment in CRM 
projects identified by respondents to the OPC. As one company respondent put it: ’Projects along the value chain – such as mining or 
secondary.  
66 MinPol/European Commission (2017): Legal framework for mineral extraction and permitting procedures for exploration and 
exploitation in the EU. Final report “Minpol (2017)” in the following. 
67 The Sakatti project in Finland and the Mina do Barroso project in Portugal, see more detail in Annex 10. 
68 GHK (2010), Collection of information and data to support the IA study of the review of the EIA Directive. The average duration 
of an EIA ranges from 7 months or less (4.75 in Estonia, 5 in Slovakia, 6.5 in Latvia, 7 in Greece) to more than 20 months (21 in 
Denmark, 27 in Spain). New figures are expected in 2024.  
69 Minpol (2017) 
70 This point was made in the position papers submitted by Junta de Andalucia, Aurubis AG, Vulcan Energy Resources and EIT Raw 
Materials. 

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2.2.2.3. 

Driver 2.3: Difficulty in accessing financing 

The rapidly increasing demand for  many raw  materials needed for the green and digital transition and for 
strategic sectors relevant for security and resilience translates into massive investment needs, both globally 
and in Europe. According to estimations by Commission services, the investment needs to ensure the supply 
of 25% of European demand of the five main raw materials for batteries (lithium, cobalt, nickel, manganese 
and natural graphite) from domestic sources amount to EUR 7 billion by 2030 and 13.2 billion by 2040.71 
Assuming a share of public spending to realise these projects comparable to the American Battery Materials 
Initiative, public support of EUR 2.7 billion by 2030 and 4.7 billion by 2040 would be required72.  

Other strategic raw materials are also likely to require large investments in light of the green transition; e.g. 
copper for electrifying infrastructure, silicon for solar panels, platinum group metals for hydrogen electrolysis. 
The European Raw Materials Alliance73 has identified potential investments of EUR 1.7 billion for rare earths 
extraction,  refining  and  recycling  as  well  as  magnet  production,  which  would  ensure  a  supply  of  20%  of 
European demand along the value chain by 2030. For other CRM, their potential investment cases amount to 
EUR 3.1 billion, fulfilling between 20 and 60% of projected EU demand in 2030 for different relevant raw 
materials.74  

Several CRM market-specific factors complicate access to (public and private) finance. The volatility of prices 
for CRMs makes it hard for investors in projects at all stages of the value chain to predict earnings, especially 
in the medium to long term. Meanwhile, given the long lead times and potential permitting delays (see previous 
chapter), significant investment decisions have to be taken years before a project starts gaining operational 
revenue.  In  addition,  global  markets  for  many  critical  raw  materials  are  small,  highly  concentrated  and 
opaque75, increasing the risk premium that needs to be paid compared to other markets. To provide financing, 
the financial institutions need to possess in-depth knowledge about mining project development and global 
raw  materials  markets  to  be  able  to  assess  CRM  projects.  Maintaining  this  expertise  in-house  is  difficult 
considering the small size of the European raw materials sector. While all such factors are not unique to the 
CRM market and investors routinely deal with such risks (ultimately, high returns on such projects should 
compensate for the risk taken and the resources invested), their aggregation does make the financing of CRM 
projects very costly and, given the limited overall size of the EU’s mining, processing and refining industries, 
it can be hard to find any partners willing or able to provide the type of financing required.  

Based on discussions Commission services had with various European public and private financial institutions, 
the following observations can be made on the state of financing for the different stages of the critical raw 
materials value chain: 

  Exploration:  Most  exploration  companies  active  in  Europe  are  based  outside  of  the  EU.  Most 
interviewed private and public financial institutions have not been involved in financing exploration 
projects and stated that this was due to the high risk involved. The European Bank for Reconstruction 
and Development (EBRD) is the only notable exception, with a team dedicated to this area and the 
ability to support such projects. Exploration financing mostly comes in the form of equity or quasi-
equity to project companies set up ad hoc.  

71 Note that, as explained in Annexes 5 and 12, this refers to the refining and recycling stages for all five raw materials, while the 
cost of establishing 25% extraction in Europe is only included for lithium. This limitation is due to both the lack of information 
about extraction project costs and the limited potential for greater extraction in the EU of the other raw materials. 
72 The calculations can be found in the description of the driver in annex 5 and further methodological details in Annex 12 
73 https://eitrawmaterials.eu/wp-content/uploads/2021/09/ERMA-Action-Plan-2021-A-European-Call-for-Action.pdf 
74 Source: Overview of the current state of the investment pipeline provided by ERMA to Commission services (not public). 
75 https://www.ft.com/content/46e5c98e-f9cd-4e88-8cd5-23427522c093: Financial Times: Tesla supplier warns of graphite supply 
risk in “opaque” market. Syrah Resources says lack of transparency over pricing in China-dominated market poses challenge for 
financing.  

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  Extraction:  While  public  institutions  have  limited  capabilities  to  engage,  some  private  financial 
organisations  have  dedicated  metals  and  minerals  investment  team,  usually  requiring  a  large 
corporation to finance it though their balance sheet. Financing of junior miners is generally considered 
very risky and the private financial sector is not willing to engage. Furthermore, for mining projects 
in third countries, the involvement of an Export Credit Agency for risk sharing is key. Financing of 
investment projects would be usually done on a syndicated basis. Member States started to implement 
some measures to promote investments in the CRM field in third countries (including extraction)76. 
  Processing/refining: to finance processing/refining projects, a stable and secure supply of critical raw 
materials  would  have  to  be  ensured, currently  not the  case  for  a  number  of critical  raw  materials. 
Financing  of  integrated  projects  (mining  +  processing/refining)  is  considered  high-risk.  Private 
financial  institutions  are  willing  to  engage  if  a  large  established  client  with  strong  credit  rating 
sponsors and finances the project through its balance sheet (corporate finance). The role of energy 
prices  and  the  price  volatility  of  the  relevant  critical  raw  materials  has  also  been  mentioned  as 
important in determining the viability of European refining projects.77 

  Recycling: The interviewed banks have little experience so far on this but generally are willing to 
engage. One of the main issues for the viability of this type of investment is the steady supply of 
material for recycling. 

Overall, the results from the open public consultation and the targeted consultations of banks show that access 
to finance is considered a major barrier to investment in specific stages of the critical raw materials value chain 
in Europe78. In this Impact Assessment access to finance can refer both to a framework that allows to best 
assess the relevant funding and investment vehicles available as well as the provision of actual funds. 

In section 5.2, pillar E.2, the Union funds available for CRM are listed. While some projects, especially for 
such involving recycling and located in an assisted area, should have several possibilities to attract funding, 
others, such as no less important extraction projects, especially such located in non-assisted areas, are likely 
to struggle to fill gaps in private financing with public funds. 

Additionally, projects may sometimes struggle to identify available funds given difficulties in assessing their 
eligibility  against  the  several  conditions  attached.  While  other  countries’  funding  programmes  are  either 
targeted at raw materials (e.g. JOGMEC in Japan, see also Annex 7) or designed in a simple way (e.g. the US 
Inflation Reduction Act, using tax breaks), the EU has a variety of relevant programmes. This is a problem 
when, as is currently the case, there is no coordinating capacity to help CRM project developers find the right 
combination required to realise their projects financially.  

CRM  projects,  especially  at  the  refining  and  recycling  stages,  can  be  very  energy-intensive.  While  it  is 
assumed in this report that the extremely high energy prices seen in 2022 will not last into the medium term 
and more additions of affordable decarbonised sources to the energy mix will bring prices further down, it is 
likely that EU energy prices will stay higher than those in other regions. This constitutes a challenge for the 
CRM Act ambitions of building up additional capacity along the CRM value chain, particularly if prices stay 
high for long. The CRM Act itself will not be able to address this challenge, but the Commission is working 

76 Examples in this respect are the German UFK programme, which provides a government guarantee for privately financed projects 
in third countries provided that a long-term off taker agreement exists with a German client; and the French Bpifrance’s Strategic 
Project Insurance, introduced in 2018, which provides an 80% insurance for projects located in France or involving a French 
business partner. 
77 See also the results of the public consultation. 
78 51% of respondents to the open public consultation agree or strongly agree that accessing private financing for CRM projects in 
the EU is difficult and a challenge for the expansion of the EU’s critical raw materials capacities; many respondents are neutral on 
this question; 9 % disagree or strongly disagree. 56% of respondents agree or strongly agree that there is a difficulty to access public 
funding in the EU; 4 % disagree or strongly disagree. 64% of the 259 respondents to the open public consultation agree or strongly 
agree that the price volatility or unpredictability poses a challenge to the roll-out of CRM projects in Europe. Some stakeholders 
make the point that the absence of mining activities in the EU taxonomy would make funding and investment unattractive (see 
Annex II). 

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on other files to improve the situation, for example by updating the EU’s Temporary Crisis Framework (to 
become the Temporary Crisis and Transition Framework), (e.g., to offset the higher energy cost compared to 
its international competitors). 

2.2.2.4. 

Driver 2.4: Lack of CRM-related skills and expertise 

The mining sectors employs 3.7 million people worldwide (1.5 million in developed countries, 2.2 million in 
developing countries). Work force is considered one of the top business risks and opportunities in mining and 
metals79. The limited number of projects in the EU targeting the raw materials value chain has led to a skills 
shortage,  as  jobs  related  to  mining  (from  mining  engineers  to  expert  in  national  administrations)  have 
diminished in the past decades. Mining and metals companies are facing their greatest ever talent shortage 
following a massive wave of retirements and resignations. The emergence of the EU CRM value chain would 
create further demand for skilled workers, thereby posing a risk for shortage increase if no action is undertaken. 
The materials dimension of the battery value chain alone may create up to around 200 000 jobs in 2030 and 
0.5 million jobs when in full transition (after 2030).80 

2.2.2.5. 

Driver 2.5: EU waste legislation does not sufficiently target critical raw materials 

recovery 

As most critical raw materials are metals, they are in theory highly recyclable. Currently, however, the share 
of recycled CRMs is very low (see Annex 10). This is due to a combination of factors: most CRMs are used 
in low concentrations as part of alloys or other mixtures, which make the recovery processes from end-of-life 
products technically and economically complex and difficult; the total amount of many CRMs used has also 
not been large in the past, as important markets (e.g. renewables, electric mobility, digital) have been growing 
at rapid rates in the past, and the materials are often bound in long-lived products (e.g. 20 or more years for a 
wind turbine); this means that when they are recovered, the so far small quantities often do not justify costly 
investments into developing targeted recycling processes and building and running industrial-scale operations. 
As  a  result,  CRMs  are  currently  often  disposed  of  at  the  end  of  a  product's  lifetime,  or  non-functionally 
recycled (i.e. recycled in a way that does not make use of the special properties of the raw material). Moreover, 
current recycling practices and waste legislation often focus, to a large extent, on waste collection and de-
pollution, and on overall mass recovery but too little on the recovery of trace metals such as CRMs.  

The most important waste streams for CRM recovery (Extractive waste, batteries, electrical and electronic 
equipment  (WEEE),  end-of-life  vehicles)  are  covered  by  dedicated  sectoral  legislation  specifying  (e.g. 
extended  producer  responsibility,  specific  treatment  requirements,  and  collection  and  recovery  targets).  In 
addition, the Waste Framework Directive covers all waste streams horizontally (e.g. requiring Member States 
to draw up waste prevention and waste management plans). Apart from the proposed Batteries Regulation, 
these legislations do not specifically target the recovery of CRMs.81 

An area of particular interest for CRMs is extractive waste. Historically most mining operations were targeted 
at high-volume commodities such as iron and copper. As CRMs commonly co-occur with these carrier metals, 
extractive waste may contain significant amounts of CRMs82. Jointly recovering and valorising base metals, 
CRMs and aggregates could be economically interesting83, with the advantage that such operations take place 
on  brownfield  sites,  lowering  risk  of  environmental  impacts  and  conflicting  land-use  interests.  A  barrier 
however lies in the lack of knowledge concerning CRMs in closed and abandoned mines, as well as the risk 
and liability assumed by a company re-mining a site with potentially unknown legacy. The Extractive Waste 

79 https://www.ey.com/en_gl/mining-metals/risks-opportunities Top 10 business risks and opportunities for mining and metals in 
2023, Ernst and Young. 
80 Fraunhofer-institut für system und innovationsforschung ISI – Job preview study: job effects in the upstram battery value chain. 
81 See Annex 10 for more detail on the current shortcoming in terms of CRMs of existing waste legislation. 
82 JRC (2019): Recovery of critical and other raw materials from mining waste and landfills; pg. 93-98 of SCRREEN-D3.2-
Identification-and-quantification-of-secondary-CRM-resources-in-Europe.pdf 
83 JRC (2019): Recovery of critical and other raw materials from mining waste and landfills 

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Directive currently regulates primarily how to minimise and manage waste generation and it requires Member 
States to draw up an inventory of closed and abandoned facilities, but it does not provide for incentives or 
information gathering to promote recovery of CRMs. 

In the open public consultation, 66% of respondents agree or strongly agree with the statement that “EU waste 
legislation does not sufficiently incentivise the recovery and recycling of raw materials”. 

2.2.2.6. 

Driver 2.6: Lack of high-quality technical standards for critical raw materials-

related industrial processes  

The availability of high-quality technical standards is essential to ensure a level playing field in the single 
market for businesses and to underpin consumer confidence. Standards can help facilitate the creation of a 
transparent  global  market  for  critical  raw  materials.  Currently,  European  and  international  standards  only 
partially  cover  critical  raw  materials-related  industrial  processes,  including  processes  involved  in  their 
extraction, processing and recycling.  

At the level of the relevant European Standardisation Organisation CEN, a number of technical committees 
exist in charge of the standardisation of metals (aluminium, copper, nickel and steel) but critical raw materials 
are not covered by the work of these committees. As regards the international aspect, as highlighted in the 
recent  EU  Standardisation  Strategy,  other  actors  follow  a  more  assertive  approach  to  international 
standardisation than the EU and are taking the lead to promote their technological solutions.  

At the level of the International Standardisation Organisation (ISO), standardisation efforts related to critical 
raw  materials  have  been  mainly  instigated  by  non-EU  countries.  The  Chinese  standardisation  body  has 
initiated standardisation on rare earths (2015) and lithium (2020) within ISO, covering the whole value chain 
including upstream extraction and sustainability. On rare earths, the results to date indicate slow progress as 
concerns the sustainability aspects, and the level of ambition is lower than what is set out in the EU principles 
for sustainable raw materials.84It is to be noted that, since 2021, Standards Australia leads the ISO Strategic 
Group  on  Critical  Minerals.  The  mandate  of  this  group  was  to  identify  which  minerals/metals  could  be 
standardised in ISO. 85 

There currently does not exist a common European strategy to ensure that standardisation efforts for critical 
raw materials sufficiently reflect the sustainability principles underlying EU legislation relevant for the critical 
raw materials value chain.  

Driver 2.7: Lack of public acceptance for critical raw materials mining in Europe 

The issues pertaining to permitting of critical raw materials projects are often intertwined with issues of lack 
of public acceptance. The Public Consultation showed that a lack of, or limited, public acceptance for new 
critical  raw  materials  projects  in  EU  was  often  driving  away  investments  in  the  value  chain  (64  %  of 

84 For REEs, actions focus on the whole value chain including rare earth mining, concentration, extraction, separation and 
conversion to useful rare earth compounds/materials (including oxides, salts, metals, master alloys, etc.), covering also 
sustainability of different processes. 
85 Although work is not yet finalised, several minerals or metals have been identified as being of a particularly strategic nature: 
cobalt, indium, vanadium, graphite, gallium, tungsten. Their mandate was extended by 12 months to summer 2023. 

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respondents agreeing or strongly agreeing). Licence to operate was reported as a main business risk868788, other 
abuses  of  fundamental  labour  rights,  such  as  child  labour  are  prevalent89.  This  tarnishes  the  reputation  of 
mining  in  Europe  as  well,  where  environmental  impacts,  worker  rights  and  public  participation  are  well-
regulated (see discussion of the environmental legislation under Annex 8).  

Improvement and better enforcement of environmental legislation, including post-concession management, 
should  address  concerns  from  society.  Nevertheless, resistance  to  projects,  particularly  for  extraction,  still 
exists,  driven  partially  by  justified  environmental  concerns  and  partially  by  what  has  been  termed 
“NIMBYism” – a situation where stakeholders agree on the need for such projects in general but are opposed 
to the siting due to local interests90. The European Federation of Geologists provided a list of the top 10 mining 
opportunities in the critical raw materials sectors that are stalled/on standstill due to permitting and/or social 
engagement issues. Such projects relate to the production of lithium, rare earths, nickel, graphite, copper.91 

2.2.3. Sub-problem 3: EU sourcing of critical raw materials is not sufficiently sustainable  

2.2.3.1. 

Driver  3.1:  The  market  does  not  take  sufficient  account  of  the  environmental 

footprint of critical raw materials 

The CRM value chain is associated with a range of environmental impacts. For example, the production of 
rare  earth  elements  (REEs),  used    for  instance  in  electric  motors  and  wind  turbines,  is  associated  with 
significant material and energy consumption and generates large amounts of air and water emissions and solid 
waste.92 Similarly, the use of platinum group metals in electrolyte membrane fuel cells is the main determinant 
of the fuel cells’ environmental footprint, considering the acidification impacts associated with the extraction 
of these metals.93  The production of cobalt and lithium, essential for battery production, is amongst other 
things associated with significant greenhouse gas emissions.94 Overall, it was estimated that greenhouse gas 
emissions associated with overall primary metal and mineral production accounted for approximately 10% of 
total global energy-related emissions in 2018.95 Life-cycle analyses of the EU’s material consumption and its 
environmental  impacts  suggest  that  it  currently  takes  up  a  disproportionate  share  of  the  safe  ecological 
operating space.96 

If left unaddressed, the environmental footprint of CRM extraction and processing may cancel out, to an extent, 
the environmental benefits of their use in green technologies and could mean that decarbonisation comes at 
the cost of an increase of other detrimental impacts. It is unlikely that the market, left to its own devices, will 

87 https://www.economist.com/middle-east-and-africa/2022/07/05/how-the-world-depends-on-small-cobalt-miners 
“Roughly 140,000-200,000 people in the Copperbelt work as artisanal miners. Most earn less than the equivalent of $10 per day, 
according to the Federal Institute for Geosciences and Natural Resources (bgr), an arm of the German government. That is still a 
better wage than most get in a country where 73% earn less than $1.90 a day.” 
88 https://www.amnesty.org/en/documents/afr62/3183/2016/en/ 
89 https://www.ilo.org/manila/publications/WCMS_720743/lang--en/index.htm 
90 See for example: NIMBYism Is Global, And That’s A Problem For The Energy Transition (forbes.com); Rare-Earth NIMBY 
Activists Help China Dominate the Industry (foreignpolicy.com) 
91 European Federation of Geologists   
https://eurogeologists.eu/wp-content/uploads/2022/10/2022_EFG_List_Top10_Mining_Opportunities.pdf 
92 Navarro, Julio, and Fu Zhao. "Life-cycle assessment of the production of rare-earth elements for energy applications: a review." 
Frontiers in Energy Research 2 (2014): 45. 
93 Stropnik, Rok, et al. "Critical materials in PEMFC systems and a LCA analysis for the potential reduction of environmental impacts 
with EoL strategies." Energy Science & Engineering 7.6 (2019): 2519-2539. 
94 Gregoir, L., and K. Van Acker. "Metals for clean energy: pathways to solving Europe’s raw materials challenge." Eurometaux, KU Leuven (2022). 

95 Azadi et al. (2020). Transparency on greenhouse gas emissions from mining to enable climate change mitigation. 
96 JRC Publications Repository - Consumption and Consumer Footprint: methodology and results (europa.eu) (Note that this study 
does not separately show the impacts associated with the EU’s consumption specifically of critical raw materials). 

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ensure that the impacts associated with the CRM value chain are properly identified and internalised. Steering 
the  market  toward  more  sustainable  CRMs,  however,  has  the  potential  to  drive  down  impacts  given  the 
differences in the environmental footprint of CRMs available to EU buyers. This is evidenced, for example, 
by the difference in footprints observable between CRMs produced using different production methods97. It is 
also clear that the varying carbon intensity of the energy used in the extraction and refining of CRMs leads to 
varying  environmental  footprints98.  In  addition,  recycled  CRMs  have  generally  a  lower  environmental 
footprint than primary materials, given the absence of the extraction phase and the higher purity of inputs (in 
cases where effective collection and sorting systems exist). 

Even though stakeholders, including downstream users, state that they are willing to take into consideration 
the relative sustainability when procuring materials99, the market response so far has resulted in the creation 
of different methods and initiatives, with a varied level of reliability and coverage.100 The Commission has 
developed the Product Environmental Footprint (PEF) to provide a common and robust method to measure 
the footprint of different materials sold on the EU market and distinguish between the environmental impacts 
of  these  materials.101  However,  uptake  of  the  PEF  method  for  the  assessment  of  CRM  is  still  limited.  In 
addition, different public and private certification systems with different scopes and coverage are currently 
available to show the sustainability of raw materials sold on the EU market.102 Having different overlapping 
schemes to show sustainability of CRMs can lead to potential confusion and undermine their effectiveness. 
Without complete information, competition driven by sustainability is diminished to the extent that customers 
cannot make choices based on sustainability. In that regard, some stakeholders have underlined the need to 
assess the suitability of different certification schemes.103 In addition, even where information is available, 
there is currently nothing preventing users of critical raw materials from procuring the most impactful (and 
often cheaper) materials. It can reasonably be assumed that, as long as the negative externalities of CRMs are 
not accounted for, at least some users will continue to be mainly driven by cost considerations, continuing to 
procure the most polluting CRMs. Sustainability chapters in trade agreements are meant to prevent a ‘race to 
the bottom’ and to sustainably trade natural resources, while encouraging trade in raw materials for the climate 
transition104. They are however limited to countries with which the EU has a FTA, and thereby do not cover 
all CRMs entering the EU market, constraining the EU’s ability to incentivise a shift in the global production 
of CRMs toward more sustainable practices. Other international instruments (c.f. Annex 8) seek to ensure 
social and environmental due diligence practices for EU companies. 

97On difference between brine and hard rock based lithium, see "Metals for clean energy’’ report (Gregoir and Van Acker).‘. On 
magnesium, see Ehrenberger, Simone. "Carbon Footprint of Magnesium Production and its Use in Transport Applications." (2020). 
For scandium, see Kaya, Şerif, et al. "Scandium recovery from an ammonium fluoride strip liquor by anti-solvent crystallization." 
Metals 8.10 (2018): 767. . For titanium, see Pal, Uday B. "A lower carbon footprint process for production of metals from their oxide 
sources." JOM 60.2 (2008): 43-47. 
98 See e.g. figure in Annex 10, source: "Metals for clean energy’’ report (Gregoir and Van Acker) 
99 For example, 186 (72 %) out of 259 respondents to the PC agreed or strongly agreed that CRMs should be accompanied by 
information on their environmental footprint. Business interest is also driven by changing consumer preferences: based on a recent 
EU survey (Consumer conditions survey, European Commission, 2021.), the majority of EU consumers being “occasional” 
consumers of environmentally-friendly products (56%) and more than a quarter paying attention to the environmental impact of 
all or most goods and services (23%), and 67% EU citizens buy products that are better for the environment even if they cost more. 
100 There are currently 457 voluntary environmental labels worldwide and over a 100 in the EU (Ecolabel index 2020, 
http://www.ecolabelindex.com/), underpinned by non-comparable methods. 
101 Commission Recommendation of 16.12.2021 on the use of the Environmental Footprint methods to measure and communicate 
the life cycle environmental performance of products and organisations 
102 See e.g. the overview of different schemes provided in IEA, I. (2021). The role of critical minerals in clean energy transitions. 
World Energy Outlook Special Report, p. 240. 
103 See for example the Call for Evidence submission of the European Automobile Manufacturers’ Association. 
104 Sustainable development in EU trade agreements (europa.eu) 

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2.3.  How likely is the problem to persist?  

The main problem identified, the lack of secure and sustainable access to critical raw materials is a forward-
looking problem, as demonstrated above, and therefore, likely to persist in the case of no targeted intervention. 
As discussed in textbox 3 of Annex 10, technological innovation and behaviour patterns have the potential to 
affect  the  evolution  of  demand  for  critical  raw  materials.  However,  most  projections  show  a  significant 
increase for several critical raw materials that outpaces supply currently on-line or planned, thus likely leading 
to  elevated  prices,  more  frequent  instances  of  supply  disruption  and  heightened  competition  for  available 
resources. These considerations mainly apply to the medium term (2030-2040), where large technological and 
social  innovations  are  unlikely,  and  the  major  sectors  driving  critical  raw  materials  demand  (renewables, 
electric vehicles) are expected to continue growing. In the longer term, towards 2050, however, technological 
innovations  spurred  by  scarcity  and  high  prices,  as  well  as  the  substantial  amount  of  CRM-rich  products 
reaching  their  end-of-life,  are  likely  to  alleviate  the  pressures  while  bringing  the  EU  closer  to  a  circular 
economy for metals (including many CRMs). Of course, new and currently unforeseen challenges could also 
develop within this longer timeline. 

The new CRM production capacities created by third countries may have an effect on global markets, but as 
explained  in  Annex  10  –  context,  the  presently  known  pipeline  would  not  be  sufficient  to  meet  the  gaps 
between supply and demand for some critical raw materials. In addition, these new supply sources may be 
reserved  for  domestic  off-takers  or  for  partners  that  can  provide  access  to  other  critical  raw  materials  in 
exchange. Additionally, acute crisis situations may trigger protectionist reactions, as observed with vaccines 
and  personal  protective  equipment  in  the  Covid-19  crisis,  making  agreements  and  memorandum  of 
understanding for external supply ineffective.  

As for the likelihood of the sub-problems and problem drivers to persist, anticipation and risk mitigation efforts 
by companies and Member States are likely to increase but only the most resourceful will be able to build an 
effective  risk-preparedness  system  on  their  own.      Smaller  companies  and  Member  States  are likely  to be 
disadvantaged in a crisis, even if the Single Market Emergency Instrument’s provisions would mitigate the 
unequal impacts to a certain degree. There would be no coherent and systemic provision of information by 
public authorities to guide and alert companies and governmental bodies alike. 

Without any further policy action, the EU is not likely to increase its production capacity along the critical raw 
materials value chain – in fact, processing/refining capacity in the EU is currently shutting down due to the 
high energy prices and the recovery is uncertain105 – except in certain battery-related value chains such as 
lithium, which are benefiting from strong public support. Private investment and financing along the value 
chain may increase in response to rising critical raw materials prices, but in the absence of public investment 
into exploration, de-risking support and streamlined permitting procedures, investments are expected to remain 
far below what is needed to strengthen the EU’s resilience.  

Finally, as noted before, circularity will increase over time due to technological advancements and greater 
availability of waste containing critical raw materials, but for this development to achieve its full potential, 
accompanying changes to regulation putting a greater focus on CRMs and providing obligations or incentives 
to  recover  are  required.  Similarly,  consumer  expectations  and  industry  initiatives  will  certainly  increase 
transparency and sustainability of critical raw materials over time. Without public action, there is a risk of 
greenwashing  and  confusion  that  would  be  hard  to  overcome  only  by    private  initiative.  Given  the 
comparatively small market share of EU companies in the global raw materials value chains, international 
standards that might be in conflict with EU regulation and values are likely to be  dictated by the dominant 
actors if the EU does not strategically coordinate and engage with international partners. 

105 Position paper by Eurometaux submitted in response to the Call for Evidence. 

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2.4.  Lessons learnt from non-regulatory actions 

The 2008 initiative proved to be a useful tool for the EU to begin considering access to critical raw materials 
as a strategic matter. The three dimensions outlines there have shaped the EU and wider society discussion 
around critical raw materials dependencies. The EU List of Critical Raw Materials has served as a reference 
for academia, stakeholders and even international partners. The 2020 Action Plan served to highlight new 
trends and contexts, such as the link of CRM dependencies with the green and digital transitions, and outline 
several  concrete  actions  that  could  be  taken  without  a  dedicated  regulatory  framework.  However,  it  also 
uncovered its limitations, with many actions having to be taken by other actors. Also, as demonstrated by the 
continued dependence on third countries and the rising number of raw materials present on the criticality list 
(from 14 in 2011 to 30 in 2020 and 34 in 2023), the underlying challenge is getting worse. Some limitations 
of the approach followed so far are noteworthy: 

First, even though industrial alliances have identified investment pipelines that concern some CRMs (e.g., on 
rare earths), the financing tools are scattered around different EU, national and private investment vehicles 
and  are  still  insufficient  to  cover  the  investment  gaps  (identified  in  Annex  12).  In  addition,  conversely  to 
renewable energies or Chips manufacturing106, there is no framework in place to ensure that CRM projects 
overcome the difficulties encountered by the length or complexity of permitting processes.  

Second, the non-regulatory actions have not been sufficient to encourage Member States in developing their 
knowledge of their geological resources on their territory or their capacity to monitor and prepare for supply 
disruptions.  

Third, even though EU level monitoring through the criticality assessment has become a key framework for 
the  analysis  of  CRMs,  it  remains  a  punctual  exercise  which  does  not  itself take  into  account  the  strategic 
priorities of EU or national policies, for instance in terms of technologies. 

Fourth, initiatives so far have not been able to tackle the increasing needs expressed by the industry and EU 
citizens to get access to sufficient information regarding the sustainability of CRMs. 

3.  WHY SHOULD THE EU ACT?  

3.1.  Legal basis 

The  initiative  intends  to  improve  and  ensure  the  Union’s  secure  and  sustainable  supply  of  critical  raw 
materials. Without such efforts, current supply and demand developments are likely to create a serious and 
structural risk of supply disruptions for a range of critical raw materials.  

As CRMs are essential to the functioning of multiple strategic sectors, potential supply disruptions must be 
addressed  in  order  to  preserve  a  stable  functioning  of  European  markets.  Therefore,  the  onset  of  supply 
disruptions, and of the associated shortages and prices volatilities, would be likely to trigger efforts at Member 
States’ level to address their consequences (e.g. through stockpiling or export restrictions). Although justified 
in principle, such efforts have, if left uncoordinated, the potential to distort competition and create intra-EU 
restrictions  to  the  free  movement  of  goods.  By  aiming  to  structurally  decrease  the  likelihood  of  supply 
disruptions, therefore, this initiative will contribute to ensuring the well-functioning of the Single Market.  

106 COM(2022) 46 final, Chips Act 

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In addition, in light of the significant economic impact of potential supply disruptions, it is likely that Member 
States will, in the absence of EU action, initiate measures to ex ante lower the risk of their occurrence.107 While 
adequate  with  a  view  to  addressing  deficiencies  at  a  national  level,  such  measures  could  also  lead  to  an 
incoherent response, thereby leading to less effective solutions and potentially fragmenting the Single Market 
or distorting competition. By proposing a coherent Union approach to improving and ensuring the security of 
supply of critical raw materials, this initiative will help prevent the potential distortion of competition and 
fragmentation of the Single Market likely to result from such uncoordinated actions and help to preserve a 
level playing field for businesses within the EU.  

To set up a harmonised EU approach to decrease supply risks for critical raw materials, therefore, Article 114 
of the Treaty of the Functioning of the European Union (TFEU) is the appropriate legal basis. In addition, 
regarding the amendments to existing legislation on waste management considered in this impact assessment, 
they would have to be based on the same legal basis as the legislation to be amended (Article 192 TFEU).    

3.2.  Subsidiarity: Necessity of EU action 

No single Member State alone is capable of effectively addressing the growing critical raw materials supply 
risks – not least due to lack of geological occurrences in an individual Member State and to the substantial 
economies of scale in the critical raw materials value chain. The measures included in this initiative would not 
be as effective if implemented by Member States acting alone, as the problems they address concern the Single 
Market as a whole. They are not limited to single Member States or to a subset of Member States but to the 
EU industrial base and the EU-wide value chain of critical raw materials. In addition, approaches at Member 
States’ level only are unlikely to be adequate to serve the needs of closely intertwined supply chains within 
the internal market.  

3.3.  Subsidiarity: Added value of EU action 

Taking into account that supply chains are widely spread across Europe, EU action is essential to generate 
economies  of  scale,  propose  solutions  that  fit  the  scope  of  the  problem  and  to  limit,  if  not  to  avoid,  the 
fragmentation of efforts and associated inefficiencies. In line with this logic, the proposed actions focus on 
areas where there is a demonstrable value added in acting at Union level due to the scale, speed and scope of 
the efforts needed. For example: 

 

 

actions aimed at mobilising investment in critical raw material projects along the value chain could be 
most effective designed and coordinated at Union level, given the scale of the investments  needed and 
because the resulting capacities should serve the full internal market. 
actions aimed at improving monitoring capacities at Union level will achieve greater effectiveness than if 
left  uncoordinated.  Together,  Member  States  and  Commission  will  be  better  able  to  anticipate  supply 
disruptions than through a patchwork of national efforts. The framework proposed should allow for a more 
efficient division of tasks and for the sharing of relevant information to prevent the duplication of efforts.  

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1.  General objective 

The general objective of the Critical Raw Materials Act is to ensure the EU’s secure access to critical raw 
materials, while incentivising the development of sustainable supply sources. This ultimately contributes to 
economic growth and high living standards in the EU, prevents disruptions and distress within the European 

107 For example, both Spain and France have announced future actions for ensuring supply of CRMs referring to many of the same 
fields of action as considered in this initiative, see  Hoja de ruta para la gestión sostenible de materias primas minerales 
(miteco.gob.es) and Strategic metals: BRGM in the forefront of the actions announced by the State | BRGM. 

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single market and increases the competitiveness of European businesses, without neglecting the EU’s role in 
promoting sustainable development and environmental protection globally.     

Given the close link between CRMs and the green and digital transition, as well as the many geopolitical 
implications  of  critical  raw  materials  supply,  this  initiative  is  indispensable  to  the  achievement  of  the 
Commission priorities “A European Green Deal”, “A Europe fit for the digital age” and “A stronger Europe 
in the world”. 

The initiative is expected to contribute to the achievement of the 2030 Agenda for Sustainable Development 
and its Sustainable Development Goals (SDGs), in particular SDG #7 Affordable and clean energy, SDG #8 
Decent  work  and  economic  growth,  SDG  #9  Industry,  innovation  and  infrastructure,  SDG  #13  Climate 
action.108 

4.2.  Specific objectives 

The initiative pursues 3 specific objectives (SOs): 

  SO1. Increase EU industry’s awareness and mitigation of CRM-related risks in the global supply chain 
  SO2. Increase the EU CRM value chain’s capacity in the internal market, notably by: 

Increasing public and private exploration efforts 

o 
o  Streamlining permitting procedures 
o 
o  Maximising the recovery of critical raw materials from relevant waste streams 
o  Promoting  high-quality  technical  standards  for  critical  raw  materials-related  industrial 

Improving financing conditions for investments along the critical raw materials value chain 

processes  

  SO3. Reduce the environmental footprint of the EU’s CRM consumption  

Interaction between the specific objectives and trade-offs 

There are many interactions between these specific objectives, both positive (synergies) and negative (trade-
offs): Greater awareness of CRM-related risks in industry (SO1) for example is likely to increase companies’ 
willingness to sign off-take agreements with and directly invest into CRM projects in the EU, where the risk 
of disruption is likely to be smallest, thereby contributing to increased EU capacities along the CRM value 
chain (SO2). Increasing EU capacities (SO2) in turn is likely to reduce the environmental footprint of the EU’s 
consumption of critical raw materials (SO3) since the EU has a high level of environmental regulation and a 
relatively low-carbon energy mix. This is especially true for increased EU capacities at the recycling stage, 
which means a higher share of secondary CRMs, which inherently have a lower energy requirement and lower 
environmental footprint. Conversely, a reduced environmental footprint (SO3) can be expected to increase 
societal acceptance for investment into critical raw materials production in the EU (contributing to SO2).   

While synergies  between  the  three  specific  objectives  dominate,  trade-offs come  into  play  when these  are 
pushed  to  the  extreme:  Banning  all  imports  of  CRMs  from  relatively  unsustainable  sources,  for  example, 
would certainly reduce the EU’s environmental footprint (SO3) but be very detrimental to its security of supply 
(the  general  objective)  and  to  industry’s  risk  mitigation  efforts  (SO1).  Similarly,  an  exclusive  focus  on 
increasing EU capacities along the CRM value chain (SO2), if achieved by lowering environmental standards 
in the EU, would likely increase the EU’s environmental footprint (contrary to SO3). Therefore, a balanced 
approach  has  to  be  pursued,  especially  with  respect  to  specific  objective  3.  Such  an  approach  involves 
balancing  the  negative  impacts  associated  with  any  material  consumption  on  the  one  hand  with  the  clear 
economic and environmental benefits of that material consumption (e.g. realisation of the green transition). It 
also involves having a realistic view of the state of sustainability around the world today, while ambitiously 
charting a path towards solutions that avoid these trade-offs – for example, low-impact mining techniques, 

108 More a more extensive overview of the impact of the critical raw materials value chain on SDGs, see: Raw Materials Information 
System (europa.eu), How can mining contribute to the Sustainable Development Goals? | Africa Renewal (un.org) 

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energy-efficient processes and ultimately the circular economy, which can provide the lowest-impact and at 
the  same  time  most  secure  raw  materials.  The  measures  in  place  to  ensure  the  development  of  specific 
objective 3 should therefore always consider the need for ensuring the main objective of supply security. 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? 

5.1.  What is the baseline from which options are assessed?  

The potential impacts of the policy options are measured against the current dynamic baseline scenario that 
consists  of  no  additional  EU  actions,  meaning  no  change  to  the  currently  existing  or  proposed  regulatory 
framework and the wider policy approach on critical raw materials. This notably relates to the implementation 
of the 2020 Action Plan on Critical Raw Materials. 

As noted in section 2.3, “How likely is the problem to persist?”, demand for critical raw materials is expected 
to grow rapidly and outpace supply, thus leading to increased prices and supply risks for critical raw materials 
needed for the green, digital and resilience ambition of the EU in the medium term (around 2030). However, 
in the longer term, secondary supply from recycling is forecasted to increase and become a relevant factor for 
many critical raw materials around 2040 and further increase towards 2050, thus alleviating pressures, as long 
as its  potential  is tapped into. Thus,  this  approximate development  of  demand  and  primary  and secondary 
supply over the coming decades should be taken as the baseline. This means that the urgency and potential 
benefit of this initiative is greatest when considering the medium-term (2030) perspective. However, should 
also not be taken for granted that the issues would resolve themselves in the long-term, as projections may be 
assuming  precisely  that  policy  action  will  be  taken  at  some  point,  For  instance,  .  increase  in  circularity 
observed over time may be difficult to attribute to the circularity-related actions proposed, since they would 
affect the speed and size of the transition towards circularity rather than the direction per se. 

Looking  more  concretely  into  the  problem  drivers  and  associated  objectives,  the  monitoring  and  risk 
preparedness framework of the EU and its Member States (Driver 1.1./SO1) would remain unchanged in the 
baseline option – implying a continuation of current voluntary coordination, public raw materials intelligence 
agencies only being active in a few countries and no strategic stockpiles for critical raw materials. Meanwhile, 
private companies may increase their risk anticipation and mitigation efforts but this is likely to be limited to 
leading large companies with the sufficient resources and the power to impose e.g., diversification conditions 
on their suppliers. The Single Market Emergency Instrument would be assumed to be in force and thus provide 
a vigilance and crisis response framework, triggered in case of foreseen (vigilance mode) or actual (emergency 
mode) disruptions to critical raw materials supply. Stockpiles would be built up during the vigilance mode and 
released during the emergency  mode, and information requests and priority-rated orders could be made to 
companies producing or possessing stocks of the critical raw materials currently disrupted. However, no efforts 
would have been made to build up strategic stockpiles before the onset of a crisis, and, given the insufficient 
capacities along the critical raw materials value chain (see next paragraph), as well as the lack of support for 
companies to manage critical raw materials supply risks, only very few companies would be able to respond 
to an information request or priority-rated order. 

Investment into the critical raw materials value chain (SO2) would remain limited in the baseline scenario, 
except in the battery-related value chains where the coordinated effort of the European Battery Alliance to 
support investments (including through public subsidies and a dedicated regulatory framework – the Battery 
Regulation) and bring off-takers together with potential producers would continue. Some critical raw materials 
projects  currently  in  the  potential  pipeline  would  advance  after  securing  financing  and  passing  lengthy 
permitting procedures, but many projects will likely not be realised in the absence of additional policy action. 
Continued high energy prices could lead to definitive closures of European refining plants, which would affect 
critical raw materials directly but also could have indirect effects through a loss of metallurgical expertise that 
can be transferred across raw materials sectors. European downstream industries would largely continue to 
source from outside the EU and be affected by supply disruptions, relying only on their individual negotiating 

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power, as well as potential use of trade defence instruments and dispute settlement under WTO or bilateral 
free trade agreement rules. Overall, import dependence would likely increase. 

Regarding circularity, the availability of waste in the baseline scenario would develop as in the “intervention 
scenario” but no regulatory incentives would be given to focus on the recovery of CRMs. Notably, critical raw 
materials recovery from extractive waste would be realised in some projects, as is already the case today, but 
not on a systematic scale, given the lack of information and the risks associated with re-opening a closed site. 
Overall, the contribution of secondary critical raw materials to satisfying demand would increase, but at a slow 
pace.  

As regards environmental footprint (SO3), increasing sustainability concerns are likely to continue driving the 
development of private certifications schemes and assessment methods as well as an increasing willingness to 
procure relatively sustainable CRMs. However, there is a risk that the effectiveness of such efforts would be 
undermined  if  methods  and  certification  schemes  contradict  each  other.  In  the  absence  of  a  harmonised 
approach, customer confidence could be too low to effectively implement those preferences and information 
could remain incomplete. It should also be noted, that where a product-level footprint exists for a product 
containing CRMs (as is e.g. the case for larger batteries), there would be an incentive to procure sustainable 
CRMs for that specific application (to the extent that the relevant products are intended for the EU market). 
The proposed inclusion of extraction and treatment of industrial minerals and metals the scope of the Industrial 
Emission Directive would improve the environmental footprint of CRMs produced in the EU. A number of 
European  legislative  initiatives  in  force  and  under  adoption  and  the  implementation  of  positive  agenda  in 
cooperation  with  third  countries  to  improve  the  governance  of  extractive  industry  would  improve  the 
sustainability of local production, imports and foreign investments109. However, those measures would not 
cover all CRMs, the whole value chain or all sustainability issues, and are not all legally binding. Therefore, 
buyers of CRMs driven solely by price considerations will continue to at least partly procure CRMs with a 
high environmental footprint. Furthermore, international standards may not adequately reflect EU values in 
terms of sustainability and circularity and may be ineffective to ensure the EU’s policy objectives are achieved.  

The problem addressed with this initiative is inherently international in nature because 1) other countries face 
the same challenges of supply security, and 2) the EU relies substantially on external sources for CRM supply. 
Therefore, the following considerations need to be taken into account both in the baseline scenario and across 
the 3 different policy options. 

First, the impact of actions by other global actors also has to be considered: Already today, relevant actions 
by partners and competitors can be observed, as discussed in Annex 7, including financial support for foreign 
or domestic critical raw materials projects, the conclusion of new partnerships, which are likely to lead to a 
greater degree of diversification over time at the global level, though it is uncertain to what extent the new 
capacities would be available to EU actors.  

Second, the EU’s global actions to diversify its supply chain must also be considered across all options as such 
efforts aim to reduce the dependencies on concentrated supply sources. Because those actions are ongoing, as 
described in Textbox 2, and since the path forward follows clear priorities already set out in the 2020 CRM 
Action Plan and in the EU’s 2022 Trade Policy Review, they are considered as being included in each of the 
policy options presented below. This impact assessment’s ability to assess directly their impact is furthermore 
limited by the fact that such actions are not only EU driven but also depend on the third country’s policy (i.e. 
for the conclusion of a FTA or Strategic Partnership). 

Textbox 2: The EU’s international actions on raw materials – the baseline also underpinning different 
options 

109 Those instruments are developed in the Annex 8 "Interplay with other legislation and policies", particularly under the heading 
"International instruments". 

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In view of reducing the supply risks from abroad, the EU has been pursuing two main actions: developing 
partnerships on raw materials value chains with resource rich countries, as announced in the 2020 Action 
Plan for CRMs adopted in September 2020 (action 9) and negotiating trade agreements to facilitate trade 
and investment in CRM in third countries. 

The partnerships on raw materials value chains with resource rich countries are cooperation instruments of 
non-binding nature and have a rather holistic approach. Although the ultimate objective of the partnerships 
is about integration of the raw materials value chains between the partner country and the EU, they are 
comprehensive, and cover aspects such as research and innovation and leverage of ESG (environmental, 
social and governance) standards. For the EU the sustainability of supply is as relevant as the security and 
this model of cooperation covers these two angles, thus creating mutually beneficial partnerships. 

The partnerships with developed countries are usually based on three pillars: integration of raw materials 
value  chains  –  the  business-oriented  pillar;  cooperation  on  research  and  in  innovation  along  the  raw 
materials value chains – to develop cutting edge and clean technologies and solutions for the raw materials 
value  chains;  and  cooperation  on  ESG  standards  –  that  aims  at  improving  sustainability  along  the  raw 
materials value chains, in its three dimensions. The partnerships with developing countries are based on five 
pillars: to  the  three  pillars  above  it  adds  a  pillar  on  capacity  building,  training  and  skills  along  the  raw 
materials value chains and a pillar on deployment of the necessary hard and soft infrastructure to support 
projects development. 

The partnerships have a roadmap associated, that identifies concrete actions to be developed under each 
pillar.  Some  of the  actions  can be crosscutting. To  develop  the roadmap,  in  agreement  with  the  partner 
country, the EU consults its Member States and the industry, bringing together relevant existing and planned 
actions, within a true Team Europe approach. The Global Gateway110 is instrumental in the implementation 
of the roadmaps. The implementation. The implementation of the roadmaps is monitored and updated as 
agreed with the partner country. 

So  far,  the  EU  has established  partnerships  with  Canada  (June  2021),  Ukraine (July  2021), Kazakhstan 
(November  2022)  and    Namibia  (November  2022).  The  EU  is  currently  negotiating  partnerships  with 
Norway and Greenland. The EU is also participating in a working group on a raw material supply chain 
track within the EU-US Trade & Technology Council and is cooperating with like-minded countries  under 
the multilateral and US-initiated Minerals Security Partnership (MSP). Building on the existing initiatives, 
the EU will also work with like-minded partners to establish a Critical Raw Materials Club to ensure the 
secure, sustainable and affordable globally supply of raw materials essential for the twin transition111. 

At this stage, it is not possible to assess the benefits of this recent strategy. However, by virtue of example, 
the partnership with Canada is enabling the development of different investment projects which would in 
turn benefit both the EU and Canada’s CRM value chain. For instance, within the context of the pillar on 
the “Integration of Canada-EU Raw Materials Value Chains”, the current ERMA pipeline includes five 
advanced projects coordinated by Canadian companies in partnership with their European partners, for a 
total investment value exceeding EUR 2 billion. Four of these projects deal with exploration and mining of 
primary resources including critical (e.g. lithium and rare earths) and non-critical materials (molybdenum), 
while the fifth one focuses on the rare earth permanent magnet value chain. Financing solutions are beings 
sought for four of these projects. In addition, six other projects in exploration, mining and processing are 
being evaluated, bringing the total investment potential to over EUR 3.2 billion by 2030. Two of the projects 
are  located  in  Canada  and  one  in  Greenland,  and  all  rely  on  joint  technical  expertise,  machinery  and 

110 The European Commission and the EU High Representative have set out the Global Gateway, a new European strategy to boost 
smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across 
the world. 
111 COM(2023) 62 final, A Green Deal Industrial Plan for the Net-Zero Age 

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technologies from both Canada and Europe. The other projects are located in Europe, with one of them 
sourcing its raw materials also from Africa. 

In addition, EU makes use of its trade bilateral agreements to deepen trade and investment links with certain 
partners.  These legally binding agreements provide new export and import opportunities by eliminating 
tariffs and quotas. Some of the EU’s trade agreements also have an Energy and Raw Materials chapter with 
provisions that aim at facilitating trade and investment in the context of CRM supply chains for example 
by: ensuring a level playing field for EU and domestic operators and facilitating EU companies to invest, 
such as when applying for an authorisation for exploration or production; by increasing the legal certainty 
for  operating  easily  an  economic  activity  by  limiting  the  capacity  of  third  countries  to  introduce  trade 
barriers such as export restrictions, export taxes, export licenses, import/export monopolies or dual pricing 
as well as by facilitating customs procedures; by improving the legal environment for protecting intellectual 
property  rights;  by  ensuring  the  sustained  efforts  by  our  trading  partners  to  implement  social  and 
environmental international standards.  
The recent trade agreements with Mexico, the United Kingdom, New Zealand and Chile already contain a 
dedicated Energy and Raw Materials chapter.  

5.2.  Outline of the policy pillars 

On the basis of the mapping of problem drivers (see Section 2.2), different pillars were identified that should 
form part of an initiative aiming to address all the identified problem drivers by achieving the general and 
specific objectives detailed in section 4. These generally follow a 1-to-1 correspondence, with the exception 
of the two horizontal pillars (A and B), which provide the overarching scope and objectives of the initiative. 
These pillars are implemented by different approaches (which, bundled together, compose the three policy 
options described in section 5.3 and assessed in section 6. The approaches are described in more detail in 
annex 5. 

TABLE 1. OVERVIEW OF OBJECTIVES, DRIVERS AND PILLARS 
Pillar 
Objective 

Problem driver 

A.  Definition  of  critical  and 

strategic raw materials 

B.  Setting 

strategic 

raw 

materials targets 

C.  Governance 
  C1.  Monitoring  and 

risk 

assessment 

  C2. 

Company 

risk 

preparedness 

[horizontal] 

[horizontal] 

1.1  Lack of systematic monitoring and 

risk preparedness 

SO1. 
EU 
Increase 
industry’s awareness and 
mitigation  of  CRM-
related risks in the global 
supply chain 

SO2.  Increase  the  EU 
CRM 
chain’s 
value 
capacity  in  the  internal 
market 

Insufficient 

2.1 
European mineral resources 

exploration 

  C3. Strategic stocks 
D.  Exploration 

of 

2.2  Unpredictable  and 
permitting procedures 

fragmented 

2.3 Difficulty in accessing financing 

E.  Support to the value chain 
  E1. Permitting procedures 
  E2. Access to finance 

2.5  EU  waste  legislation  does  not 
sufficiently target CRM recovery 

F.  Waste legislation 

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2.6  Lack  of  high-quality  technical 
standards  for  CRM-related  industrial 
processes  
3.1 The market does not take sufficient 
account of the environmental footprint 
of CRMs 

G.  Standards for the critical raw 

materials value chain 

H.  Environmental  footprint  of 

critical raw materials 

SO3. 
the 
Reduce 
environmental  footprint 
the  EU’s  CRM 
of 
consumption   

5.2.1.  TABLE 3: OVERVIEW OF POLICY APPROACHES PER PILLAR 

Pillars 
A. 
critical 
strategic 
materials 

Defining 
and 
raw 

Setting 
B. 
raw 
strategic 
materials targets 

C. Governance 

C.1  Monitoring 
and 
risk 
assessment 

Strategic 

C.2 
stocks 

C.3  Company 
risk 
preparedness 

Policy approach 1 

Policy approach 2 

Policy approach 3 

Legal definition of critical 
raw  materials  [discarded 
at an early stage] 

Legal definition of strategic 
raw  materials  [discarded  at 
an early stage] 

Legal  definition  of  both 
critical  and  strategic  raw 
materials 

Developing  a  framework 
to  set  EU-level  guiding 
targets  for  strategic  raw 
materials 
regarding 
capacity  

Tasking  expert  groups 
RMSG  and  EIP  on  raw 
materials 
to  carry  out 
tasks  on  monitoring  and 
risk assessment [discarded 
at an early stage] 

proposals 

targets 
Setting  EU-level 
obliging 
the  governance 
structure  to  work  toward 
through  Strategic 
them 
Projects 
(c.f. 
pillar  E)  and  performance 
review( 
Developing a dedicated EU 
CRM board supported by a 
network 
national 
of 
agencies  and  operational 
the 
capacity 
Commission 
Developing 
capacities 
assessment 
EU-level 
Ensuring 
stock 
coordination 
assessment 
the 
stockpiling  of  strategic  raw 
materials 

monitoring 
risk 

and 
for 

within 

and 

Setting  national  targets  for 
strategic 
raw  materials 
based on national resources 
and 
capacities 
[discarded at an early stage] 

existing 

Developing  an  operational 
capacity  as  a 
separate 
structure  to  implement  the 
CRM Act's provisions 

Approach  2  +  Developing 
monitoring 
risk 
management capacities 

and 

Approach  2  +  Enabling  the 
common 
of 
purchase 
strategic raw materials 

 Developing 
requirements 
on  company  diversification 
and stockpiling 

Approach  2  +  providing 
direct  support 
foster 
companies’ resilience 

to 

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Requirement 
for 
Member States to report 
the  mapping  and 
on 
evaluation 
the 
strategic  (and  critical) 
mineral  resources  and 
extractive waste areas in 
the EU 

of 

Requiring  Member  States 
to set up strategies to work 
towards  achieving  more 
stable  and  secure  supply 
of CRM  

CRM  projects 
considered 
in 
planning  

to  be 
spatial 

D. Exploration 

E. Support to the 
value chain 

E.1  Permitting 
procedures 

E.2  Access 
finance 

to 

Encourage  the  setting  up 
of an Investment Platform 
for  the  CRM  value  chain 
finance 
and 
through 
existing 
instruments 

leverage 

F. 
legislation 

Waste 

Adoption 
of 
a 
and 
Recommendation 
announcements  of  future 
CRM circularity actions 

requirement 

National 
to 
report  on,  develop  and 
implement 
national 
exploration programmes for 
critical) 
strategic 
(and 
and 
resources 
mineral 
extractive waste. 

Approach  2  +Obligation  to 
report  to  the  governance 
structure  on  the  land  use 
decisions 
to 
known  deposits  containing 
strategic raw materials 

applicable 

Developing 
Projects  with 
support, 
partner countries abroad 

Strategic 
stronger 
in  Europe  and 

Approach  2  +  Require 
Member  States  to  dedicate 
sufficient  resources  to  their 
permitting   

Approach  1  +  Set  up  a 
dedicated  CRM  Fund  with 
Commission 
new 
contribution  and  Member 
State contribution, managed 
by  governance  structure.  It 
should  be  able  to  provide 
loans,  equity  and  grants  to 
projects  in  all  stages  of  the 
CRM  value 
in 
compliance  with  State  Aid 
rules 

chain, 

Developing 
Projects, 
partner countries abroad 

Strategic 
in  Europe  and 

to 

Approach  1  +  Mandatory 
make 
measures 
permitting 
for  Strategic 
Projects more predictable 
Approach  1  +  Promote and 
advise  the  setting  up  of  a 
dedicated  CRM  fund 
to 
combine  Member  State 
funding  with  contributions 
from  existing  EU  funds.  It 
should  be  able  to  provide 
loans and equity to projects 
in  all  stages  of  the  CRM 
value  chain,  in  compliance 
with State Aid rules. Grants 
could be considered as well, 
depending  on  the  types  of 
resources available 
Approach  1  +  Targeted 
the 
amendment 
Extractive  Waste  Directive 
and 
circularity 
provisions in the CRM Act 

certain 

of 

G.  Actions  on 
standards for the 
critical 
raw 
materials  value 
chain 

H. 
Environmental 
footprint 
critical 
materials 

of 
raw 

Increase  efforts  to  have 
EU  rules  and  principles 
reflected  in  international 
standards 

Approach  1  +  Mandate 
development  of  standards 
standardisation 
and 
regarding 
deliverables 
relevant industrial processes 

Approach  2  +  Set  essential 
requirements  for  regarding 
relevant industrial processes 
and  mandate  development 
harmonised 
of 
standards  [discarded  at  an 
early stage] 

related 

Set 
minimum 
for 
requirements 
certification  schemes  for 
sustainable CRMs 

Approach  1  +  Require 
declaration 
of 
environmental  footprint  for 
CRMs sold in the EU 

Approach  2  +  Putting  in 
place  a  mechanism 
for 
setting  performance  classes 
and maximum thresholds 

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5.2.2. 

Pillar A – Defining critical and strategic raw materials 

At EU level, the Commission currently performs the criticality assessment (described in detail below) and 
conducts a foresight exercise on critical raw materials used in strategic sectors and technologies. However, the 
list of critical raw materials currently does not have legal status and only limited implications.   

5.2.2.1. 

Approach  1:  Legal  definition  of  critical  raw  materials,  based  on  the  current 

criticality assessment methodology and covering the whole EU economy  

This approach would consist in defining the scope of the regulation and all its measures based on the current 
criticality assessment methodology. The methodology covers a wide range of economic sectors and would 
continue to rely on the criteria:  

 

 

economic importance (EI), based on the value added of corresponding EU manufacturing sectors and 
corrected by a substitution index; and  
supply risk (SR), based on supply concentration (at global and EU level, weighted by a governance 
performance index) corrected by recycling and substitution parameters.  

Raw materials exceeding the thresholds set for both criteria are considered at high risk of supply disruption 
(based on their supply concentration, weighted with governance indicators) and of high economic importance, 
and would therefore be defined as critical.  

5.2.2.2. 

Approach 2: Legal definition of only strategic raw materials based on multi-criteria 
analysis including supply and demand foresight and relevance for strategic applications   

Under this approach, a new concept of “strategic raw materials” would be introduced. This concept would 
take  into  account  better the  foresight  perspective,  and  provide a  stronger focus  on applications  considered 
strategic, such as renewable energy, electric mobility, aerospace and defence, digital or medical technologies. 
The list of raw materials identified as strategic would be enshrined into law and set a narrow scope for the 
measures proposed under this initiative. It would be shorter than the current list of critical raw materials and 
would likely overlap with it, but not fully be a subset as some raw materials that are strategically important 
and likely to face future supply challenges (e.g. copper, nickel and aluminium) are currently too diversified to 
pass the supply risk threshold of the criticality assessment.    

The  methodology  to  define  strategic  raw  materials  would  build  on  the  data  collected  for  the  criticality 
assessment but apply also more subjective/qualitative factors, notably relevance for strategic applications and 
forecasted demand growth. It would be applied to the full set of assessed raw materials, not only the ones 
currently identified as critical. As this would be a new concept and as important data has yet to be gathered, 
the exact methodology is not yet defined, but the following is a list of the factors considered for inclusion: 

  Relevance for strategic sectors and technologies:  
  Future supply and demand forecasts for 2030: 
  Production volumes:  
  Other potential factors:  

  A governance structure (cf. Pillar C) would monitor a full list of non-energy, non-agricultural raw 
materials,  compiling  databases  (annually)  on  current  EU  production,  imports,  exports, 
consumption, recycling etc. for all raw materials.  

5.2.2.3. 

Approach  3:  Legal  definition  of  both  critical  and  strategic  raw  materials,  with 

concentric circles of policy measures’ scope 

Under this approach, both of the concepts/lists described above would be given legal status. The list of critical 
raw materials identified based on the above-described criticality assessment would be amended to include all 

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strategic raw materials identified based on the above-described multi-criteria assessment, such that strategic 
raw materials would be a subset of critical raw materials. The thus slightly enlarged list of critical raw materials 
would define the overall scope of the Critical Raw Materials Act 

The  following  figure  maps  the  measures  described  under  other  pillars  against  the  set  of  all  screened  raw 
materials, critical raw materials and strategic raw materials: 

5.2.3. 

Pillar B – Setting strategic raw materials targets   

5.2.3.1. 

Approach 1: Developing a framework to set EU-level guiding targets for strategic raw materials 

regarding capacity  

First, this approach would set headline targets for the development of EU capacity per strategic raw material 
by 2030, e.g. the EU is able to meet 30% of its needs for a specific strategic raw material by 2030. Headline 
targets  would  be  set  specifically  for  strategic  raw  materials  for  which  the  investment  needs  and  potential 
capacities are more clearly identified, e.g. lithium and rare earths. 

Then, to achieve such headline targets, more specific value chain targets would be set, where appropriate, 
for extraction, refining and recycling:  

In terms of time horizon, the first value chain targets would be set for 2030, and would have to be announced 
within one year of entry into force of the regulation. In 2030, following an assessment by the governance 
structure, new targets would be set for 2040, and similarly for 2050.  

When set, the value chain targets would have to take into account:  

o  Existing  EU  targets  for  the  deployment  of  EU  renewable  energy  (Renewable  Energy 
Directive),  as  it  drives  the  need  for  green  technologies  containing  strategic  raw  materials. 
SRM needs created by defence or digital strategies would also be taken into account. 

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o  Existing recycling targets (recycled content or waste recovery), which could drive the EU’s 

ability to meet EU recycling capacity targets (e.g., in the Batteries regulation 

o  The geological endowment of Member States and the EU as a whole, as reported in pillar D, 
for  the  setting  of  extraction  targets,  taking  into  account  the  feasibility  studies  operated  by 
private or public bodies. 

o  The  industrial  capacity  of  Member  States  and  the  EU  as  a  whole  so  as  to  determine 

refining/processing and recycling targets. 

o  The existing and planned projects pipelines, as reported by the relevant industrial alliances as 

well as by the Member States to the governance structure. 

o  The expected growth of EU demand for the strategic raw materials on which targets are set.  
o  The concentration of global supply for the strategic raw material. 

5.2.3.2. 

Approach  2:  Setting  EU-level  targets  obliging  the  governance  structure  to  work  toward  them 

through Strategic Projects proposals (cf. pillar E) and performance review 

Conversely to approach 1, the targets would be directly set in the Regulation, at different value chain stages. 
They would be aspirational targets, with a double role: 

1)  Provide a common objective for public policies and private actors to work toward their achievement; 
2)   Serve as a criteria for the selection of Strategic Projects, which would have to demonstrate that their 

future output will serve to develop such targets.  

The target levels would be formulated with headline figures, and would ensure that, for each strategic raw 
material and by 2030,  

o  Union  extraction  capacity  is  able  to  extract  the  materials  needed  to  cover  at  least  X %  of 
Union’s  annual  consumption  of  refined  materials,  to  the  extent  that  the  Union’s  known 
reserves allow for this; 

o  Union refining capacity is able to refine at least X % of the Union’s annual consumption of 

refined materials; 

o  Union  recycling  capacity  is  able  to  produce  secondary  materials  covering  at  least  X  %  of 

Union’s annual consumption of refined materials; 

In addition, compared to approach 1, the Commission would have a formal role in tracking progress towards 
the targets, based notably  on the state of  exploration of national resources of critical raw materials; on the 
advancement of Strategic Projects (cf. Pillar E), and on whether their development is impeded by specific 
factors, notably permitting bottlenecks, lack of investment, etc.  

If it is apparent that EU capacities are not developing sufficiently to meet the EU-wide targets, the Commission 
would assess the necessity for adopting new measures.  

5.2.3.3. 

Approach 3: Setting national targets in the regulation for strategic raw materials 

based on national resources and existing capacities   

Under this approach, Member States would be imposed country specific targets at different value chain stages 
for strategic raw materials with a view to decrease the vulnerabilities and to increase the resilience, after the 
governance  structure’s  initial  assessment  of  their  industrial  capacity  and  mineral  resources.  Those  targets 
would be adopted through delegated act. The Commission would jointly agree, no less than 6 months after the 
first 2030 review, on a set of measures to unlock the Member State’s potential and contribution to achieving 
the targets. 

If, in a subsequent review of the Member State’s performance 2 years after the first review, no further progress 
has been made, the Commission should assess the origin of this lack, notably to determine the origin of it. In 

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the event where permitting bottlenecks are the concern, the Member State would be compelled to review its 
permitting procedures and allocate sufficient resources to the public authorities in charge. 

5.2.4. 

Pillar C – Governance structure   

This pillar seeks to enable the EU to increase its ability to foresee and mitigate structural supply shocks before 
they  materialise,  notably  by  enabling  Member  States  and  companies  to  build  up  their  resilience  through 
appropriate tools. The scope, depth, speed and efficiency of such tools are inherently linked to the governance 
structure that would be charged with carrying out the tasks specified in the subsequent (sub)pillars (C.1, C.2, 
C.3)  on  monitoring  and risk-assessment,  strategic  stocks  and  risk  preparedness.  Therefore,  the  approaches 
proposed are bundled together as part of options 1, 2 and 3, and the resources are adapted according to the 
scope of the tasks proposed.   

5.2.4.1. 

Approach 1: Tasking expert groups RMSG and EIP on raw materials to carry out 

tasks on monitoring and risk assessment 

Under this approach, the Commission would rely on its existing expert groups (RMSG, EIP on RM) to develop 
relevant  tasks  on  monitoring  and  risk  assessment. The  relevant experts  would meet  at  technical  level  fora 
focusing discussion and exchanges on structural issues pertaining to the critical raw materials value chain, 
providing advice to the Commission on different pillars. 

5.2.4.2. 

Approach  2:  Developing  a  dedicated  EU  CRM  board  supported  by  a  network  of 

national agencies and operational capacity [within the Commission] 

Under this approach, the Commission would propose to set up a EU CRM board composed by representatives 
of Member States and the Commission. This board would be in charge of building on the existing resources 
within the Commission and Member States administration to carry out the tasks described in the subsequent 
pillars  (C1,  C2,  C3).  Based  on  the  contributions  of  the  actors  below,  the  board  would  issue  advice  to  the 
Commission on particular actions, such as on defining strategic raw materials and setting targets for them on 
EU  supply  capacity  and  EU  diversification,  as  well  as  on  building  up  strategic  stocks,  and  on  proposing 
Strategic Projects (as per pillar G and K). The board would adopt its rules of procedure at its first meeting and 
the Commission would provide a common secretariat for the board and the network described below. 

For tasks pertaining to the definition of strategic raw materials and their targets, as well as  regular market 
monitoring  and  forecasting  for  the  selected  raw  materials,  the  board  would  rely  on  the  secretariat  with 
intelligence capacity and a network of national supply agencies established by the regulation. Member States 
would appoint representatives from the relevant authorities, and their national intelligence or other relevant 
raw materials agencies. In the event where a Member State would not have a national supply and intelligence 
agency on critical raw materials or equivalent, it would nominate a representative from the authority in charge 
of  geological  or  mineral  resources.  The  Member  State  would  also  be  encouraged  to  gather  the  necessary 
resources for assessing its own territories and developing its expertise in the sector.  

Approach 3: Developing an operational capacity as a separate structure to implement 
the CRM Act's provisions 

This approach would consist of creating a full-fledged operational capacity on critical raw materials, that is 
external to the Commission itself and is set on a permanent basis rather than relying on regular cooperation of 
Member States and European capacities as provided by the board and network under approach 2. 

There  are  different  formats  that  this  operational  capacity  could  take,  such  as  the  creation  of  a  dedicated 
decentralised EU agency on critical raw materials or the creation of a dedicated directorate on critical raw 
materials in an existing agency.  

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The operational capacity would ensure the exchange of information, cooperation and coordination with the 
relevant governance bodies that deal with the vigilance and crisis response for raw materials. 

5.2.5. 

Pillar C.1 Monitoring and risk assessment 

5.2.5.1. 

Approach 2: Developing monitoring capacities and risk assessment  

This approach would define precise monitoring tasks that would be carried out by the EU CRM board (i.e. the 
governance structure set out in approach 2 of Pillar C). The approaches 2 and 3 develop a more comprehensive 
and permanent framework dedicated to critical and strategic raw materials, ahead of crisis, while taking the 
instruments proposed in the SMEI into account (c.f., early warning mechanism, in approach 2). 

Scope: With the support of the Commission, the board, with the support of the network, would develop a 
market monitoring capacity related to the critical raw materials industrial value chain, focussing on risks that 
may disrupt, compromise or negatively affect the supply of critical raw materials.  

Means and actions: Through the network, the board would ensure to the best extent possible the coordination 
of research activities of national agencies on a specific material or value chain and the subsequent knowledge 
sharing amongst them in order to avoid overlap and gain added value in depth and knowledge. To develop 
such  capacity,  there  is  a  parallel  need  to  ensure  information  sharing  from  Member  States  and  companies 
operating in the CRM value chain. 

Deliverables:  

First, this monitoring would feed into the determination of critical and strategic raw materials, that the Board 
would propose to the Commission (c.f. Pillar A) and would better inform subsequent policy decisions. It would 
be used to publish more regular information on monitoring through the publication of regular reports on the 
state of critical and strategic raw materials supply chain. The Commission would develop and run stress test 
of strategic raw materials value chain to estimate the likelihood and impacts of a future disruption (model-
based, scenario-based, exercises with participating companies).  

5.2.5.2. 

Approach 3: Developing monitoring and risk management capacities 

In addition to the monitoring and general risk assessment provided by approach 2, this approach would ensure 
the  development  of  targeted  risk  assessment  as  well  as  of  risk  management  tools,  thereby  supporting  the 
resilience of European companies. 

Means and actions: Targeted risk assessment would be carried out by the operational capacity (cf. approach 
3 of Pillar C) which would: 

  Conduct  real  time  monitoring  of  the  CRM  value  chain  (screening  of  news  reports,  business 

intelligence, high-frequency customs data),  

  Conduct  direct  stress  tests  on  strategic  raw  materials  value  chain  at  a  more  frequent  pace, 
coordinating with Member States supply agency but with additional capacity to run them itself ;  
  Develop an Early warning mechanism (EWM): based on the monitoring, information gathering and 
stress test, the operational capacity would develop a EWM that indicate that a strategic raw material 
is at risk of imminent shortage or disruptions.  

In addition to the coordination and information sharing tasks mentioned in approach 2, this approach would 
include information request from large companies operating in a strategic raw materials value chain in order 
to ensure a higher degree of information on the state of supply chains. 

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5.2.6. 

Pillar C.3 Companies’ risk preparedness 

5.2.6.1. 

Approach 2: Developing requirements on company diversification and stockpiling  

Under  this  approach,  specific  requirements  would  be  set  on  companies  to  ensure  their  preparedness  and 
resilience. Under those requirements, large companies (>250 staff) which consume strategic raw materials as 
a primary input for their production would have to comply with at least one of the following obligations:  

1)  Ensuring  a  diversified  source  of  suppliers  if  it  relies  on  strategic  raw  materials  (when  the  market 

structure allows); 

2)  Ensuring  a  sufficient  level  of  strategic  stocks  of  strategic  raw  materials  equal  to  60  days  of 

consumption;  

If they cannot ensure and demonstrate their adherence to one of those measures, companies would have to 
then report to the Member States in which they are established explaining the reasons for their non-compliance. 

Those companies would also have to develop an in-depth audit of their supply chain under the form of a stress 
test,  to  assess  regularly  their  vulnerability  under  different  supply  scenario  and  the  suitability  of  their  risk 
mitigation strategies.  

Member States would be responsible for ensuring the implementation of these obligations. 

5.2.6.2. 

Approach 3: Developing requirements on company diversification and stockpiling 

while providing direct support to foster companies’ resilience 

This approach would contain the measures developed in approach 2. In addition, to enable large companies to 
meet these obligations and to support SMEs in undertaking such efforts (even if SMEs would not face those 
obligations), this approach provides that the operational capacity advise companies on relevant strategies to 
enable them to mitigate supply chains risks. This support model could be defined in the legislation laying out 
the operational capacity’s tasks. 

Such advisory structure, inspired by the services some national agencies offer to companies, would allow for 
all EU companies operating across the critical raw materials value chain to benefit from direct advice.  

5.2.7. 

Pillar C.2 Strategic stocks 

5.2.7.1. 

Approach  2:  Ensuring  EU  level  coordination  and  stock  assessment  for  the 

stockpiling of strategic raw materials 

This approach would develop a mechanism to ensure higher coordination of strategic stockpiles amongst EU 
Member States, following the steps presented below. 

1) After the establishment of the list of strategic raw materials, Member States would be required to report 
(with the highest level of confidentially and security) to the Commission on the organisation and on the state 
of their stockpiles for the strategic raw materials.  

2) The Commission would review the common state of stockpiles and assess the potential convergences and 
overall  levels  of  stockpiles  across  the  EU,  against  a  benchmark  of  what  is  considered  as  a  safe  level  of 
stockpiling.  

3) A review of the state of play and implementation of the Commission’s recommendation would take place 
regularly  occur  to  monitor  progress.  The  SMEI  framework,  including  the  definition  of  targets  under  the 
mechanism set in the vigilance mode, and the coordinated release under the Single Market emergency phase, 
could still apply to critical and strategic raw materials in the event of a crisis or threat. 

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5.2.7.2. 

Approach 3: Enabling the common purchase of strategic raw materials 

In addition to approach, this approach would mean that the operational capacity would foster the development 
of stockpiles of strategic raw materials. Based on the needs expressed by interested companies, the operational 
capacity  (cf.  approach  3  of  Pillar  C)  would  purchase through  a joint  procurement  mechanism,  appropriate 
quantities of strategic raw materials.  

The interested companies would be financing the purchase of the stockpiles, as they are voluntary, albeit at 
lower costs given the fact that common purchasing would enable marginal saving. In addition, it would have 
to be assessed whether any financial instrument developed in pillar E.2 would be able to de-risk companies 
engaged in stockpiling by contributing to this mechanism. 

5.2.8. 

Pillar D – Exploration efforts in the EU 

The  approaches  developed  below  cover  the  early  stages  of  the  exploration  activities  related  to  mineral 
resources. They aim to enable further exploration activities by ensuring additional coordination or availability 
and reliability of data.  

5.2.8.1. 

Approach 1 - Requirement on Member States to report on the mapping and evaluation of the critical 

raw material resources and extractive waste areas in the EU  

With this approach, Member States would have to periodically report on the exploration activities carried by 
public  entities  and  non-confidential  information  of  exploration  activities  carried  by  companies,  targeting 
critical raw materials.  

This includes, but not only, existing public exploration programmes of mineral resources, targeting primary 
deposits (either currently or historically exploited or not) and/or secondary deposits (extractive waste of closed 
or abandoned facilities). Information on secondary resources should consider the volume, grades, mineralogy, 
technology feasibility and characteristics of the deposits, when available.  

Member States would also have to periodically report, using the UNFC classification system, on results from 
public  and  private  exploration  activities  (when  available)  that  have  already  estimated  mineral  resources 
(measured,  indicated  or  inferred)  or  reserves  (proven  or  probable)  according  to  existing  national  or 
international reporting codes.  

5.2.8.2. 

Approach  2  –  Requirement  on  Member  States  to  report  on,  develop  and  implement  national 

exploration programmes for critical raw material resources and extractive waste. 

Under  this  approach,  Member  States  would  be  compelled  to  implement  identified  actions,  even  if  the 
extraction  or  reprocessing  of  extractive  waste  is  not  part  of  their  industrial  or  economic  strategy.  The 
development  of  the  knowledge  produced  would  then  be  available  for  future  generations  and  enable  the 
development of the EU critical raw materials value chain. 

  Develop and implement public exploration programmes 

Member  States  would  have  to  develop  and  implement  programmes  for  the  public  exploration  of  mineral 
resources. The public exploration campaign would include geological mapping at a suitable scale, thematic 
mapping in particular hydrothermal alteration and structural maps, geochemical campaigns of soils, sediments, 
rocks and extractive waste, aerial geophysical surveys.  

  Reporting on critical raw material resources and extractive waste areas in the EU   

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With this approach, Member States would have to periodically report on the exploration activities carried by 
public entities and non-confidential information of exploration activities carried out by companies, targeting 
critical  raw  materials.  This  includes,  but  not  only,  public  exploration  programmes  of  mineral  resources, 
targeting  primary  deposits  (either  currently  or  historically  exploited  or  not)  and/or  secondary  deposits 
(extractive waste of closed or abandoned facilities).  

  Reprocessing existing geochemical and geophysical data sets 

Member  States  hold  substantial  repositories  of  raw  geochemical  and  geophysical  data  from  past  public 
exploration campaigns or acquired in the context of past exploration permits.  This data, together with new 
data  acquired  through  public  exploration  programmes,  could  be  reprocessed  with  new  and  innovative 
algorithms  and  processing  methodologies.  Under  this  approach,  Member  States  would  be  compelled  to 
develop  and  implement  adequate  policies  to  reprocess  existing  and  newly  acquired  geochemical  and 
geophysical data. 

 

 Developing predictivity maps 

Member  States  would  be  compelled  to  develop  and  implement  adequate  policies,  such  as  a  dedicated 
programme,  to  produce  and  update  predictivity  maps  for  critical  raw  materials  in  order  to  improve  the 
knowledge of the mineral  potential present in the EU. 

  Publication of data 

The results  of the  exploration  activities  promoted  by  Member  States through  the  actions  presented  above, 
would have to be periodically reported to the governance structure. 

Finally, this approach would, alike approach 1, encourage Member States to take due account of the occurrence 
of mineral resources containing critical raw materials (c.f., pillar A) when taking measures regarding land use 
that might affect the exploitability of the deposits. 

5.2.8.3. 

Approach  3:  Obligation  to  report  to  the  governance  structure  on  the  land  use 

decisions applicable to known deposits containing strategic raw materials 

In addition to approach 2, approach 3 would require Member States to inform other EU countries and the 
Commission through the governance structure of their intention to adopt a land use decision that would affect 
the potential to exploit of a known mineral deposit containing strategic raw materials, allowing for comments 
and discussion in the relevant fora.  

5.2.9. 

Pillar E – Support to the value chain 

5.2.9.1. 

Approach 1: Requiring Member States to set up strategies to contribute to a stable 

and secure supply of CRMs 

Under this approach, each Member State would be required to create a strategy outlining the ways and timeline 
how it can contribute towards achieving a more stable and secure supply of CRM in the EU, by identifying 
and supporting projects that are important across the CRM value chain. No specific legal notion of strategic 
projects would be established under this approach. 

5.2.9.2. 

Approach 2: Identify Strategic Projects, in Europe and partner countries abroad  

Under this approach, Strategic Projects would be established with legal consequences regarding permitting 
and access to finance as outlined in pillars E.1 and E.2.  

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Companies and investors, would be able to submit their proposals to the Commission.  To be eligible, projects 
would have to fulfil general minimum criteria, among them a meaningful contribution to the targets set under 
Pillar B, positive spill-over effects beyond the Member State where they are located and a positive outlook 
regarding long-term economic viability. The governance structure might apply more specific criteria per step 
of the value chain for each raw material mentioned in the list of targets. 

a  business  plan  evaluating  the  financial  viability  of  the  project,  including  an  overview  about  the  secured 
funding and the remaining financing needs and estimated time-to-market.  

an  assessment  of  the  level  of  public  acceptance  of  the  project  and,  where  relevant,  a  plan  for  ensuring  it, 
including actions (additional to what is already required) such as awareness campaigns to educate and inform 
the public of the importance of CRMs for the green transition and how these CRMs could be obtained in the 
EU in a responsible way or setting up mitigation and compensation mechanisms to ensure that the project 
contributes to the general development of the relevant area.   

The Commission would then share the application with the Member State where the project is intended to take 
place and ask for its general approval within one month for the project to receive the status of Strategic Project. 
Where it refuses, it would have to present its substantiated reasoning to the Commission who could request 
the  Board  to  discuss  these  reasons.  Where  the  Member  State  accepts,  the  Commission  would  check  the 
application for the fulfilment of the minimum criteria.  In case of many applications, the Commission would 
be able to prioritise applications for projects active on specific parts of the value chain in order to work towards 
a balanced representation of projects along all strategic raw materials along the value chain. The Commission 
would then assess the projects in consultation with the Board. For projects that fulfil the criteria, the decision 
to assign them the status of Strategic Project, this would be published as a Commission decision. 

Projects outside of the EU could also be labelled as Strategic Projects. To be eligible, those projects would 
also  have to  fulfil  general minimum  criteria,  among  them  high  environmental and  social  performance  and 
contribution to the targets laid out in pillar B. They would also need the support of one or more European 
companies that have committed to purchase at least e.g. 50% of the production of the respective strategic raw 
materials for e.g. 180 months for use in Europe. The projects should in principle be located in countries with 
which  the  EU  has  concluded  a  Free  Trade  Agreement  with  a  chapter  on  raw  materials  or  a  Strategic 
Partnership.  To ensure compliance with ESG criteria, the project would need to show sufficient evidence that 
it would qualify for a recognised certification scheme, if recognised. Otherwise, the same process would apply. 
The respective third country would be closely involved to ensure compliance on the ground. The board might 
also coordinate with the Global Gateway governance, which could help leverage EU Member States funds for 
projects outside the EU.  

5.2.10. 

Pillar E.1 – Permitting procedures 

Raw materials operations in the EU are subject to a comprehensive legislative framework that is meant to 
minimise a project’s adverse environmental impacts and ensure involvement of all relevant stakeholders in 
the permit-granting process. This framework is an essential achievement, which this initiative should build on. 
However, the unpredictability of permitting procedures in terms of duration and outcome has been shown to 
discourage much-needed investment into the European raw materials value chain. Against this background, 
this section sets out different possible approaches to speeding up permitting processes and making them more 
predictable. 

5.2.10.1.  Approach 1: CRM projects to be considered in spatial planning    

Intervening in an early phase, well-designed spatial planning has the potential to reduce land use conflicts and 
point  project  developers  to  suitable  sites,  which  in  turn  is  likely  to  accelerate  permit-granting  procedures. 
Analogous  to  Union  legislation  on  the  deployment  of  renewable  energies,  therefore,  Member  States’ 

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competent national authorities at national, regional and local level would be required to take into consideration 
and provide for the realisation of CRM projects when developing spatial plans.    

Given the potential effects on the environment of CRM projects, Member States should, when developing 
those spatial plans, apply the Strategic Environmental Assessment (SEA) Directive11.   

5.2.10.2.  Approach 2: Mandatory measures to make permitting for Strategic Projects more 

predictable   

This approach includes the measures set out in Approach 1.  

In  order to  ensure  a  secure  investment  climate  for  Strategic  Projects  (see  Pillar G)  in  particular,  a  general 
requirement would be set for Member States to ensure that administrative procedures for their approval are 
streamlined and expedited at the appropriate administrative level.  

In order to put such streamlining into practice, Member States would also be required to take the following 
concrete measures in relation to Strategic Projects:  

 

allocating  the  status  of  the  highest  national  significance  possible  under  national  law  to  Strategic 
Projects for the purpose of permit granting processes;   
applying a joint procedure combining all relevant assessments for a given project;   

 
  designating a ‘one-stop shop’, in the form of a competent authority which should be the sole point of 

contact for project promoters during the entire process  
adhering to specific time limits for different stages of the permit granting procedure;  
allowing documents to be submitted digitally;  

 
 
  making available a manual of procedures for project developers.  

As  regards  the  duration,  there  would  be  an  overall  time-limit  set  for  overall  permit  granting  procedure 
(covering  the  period  from  the  date  of  acceptance  of  the  submitted  application  file  until  a  comprehensive 
decision)  for  Strategic  Projects  (e.g.  18  months).112  More  specific  time  limits  would  also  be  introduced 
pertaining to specific steps of the permitting process. 

The above-mentioned time limits would be without prejudice to potential delays caused by judicial or non-
judicial appeals. However, Member States would be required to, where available under national law, apply 
urgency procedures for possible litigation related to the permit granting process.   

Lastly, this approach would provide direction to Member States on the application of substantial permitting 
conditions. The nature protection rules that are integral part of the relevant permitting conditions (i.e. the Birds, 
Habitats  and  Water  Framework  Directives)  provide that projects  considered  to be  in  the  overriding  public 
interest can be allowed to go forward even in the case of limited adverse impacts on the environment.  

5.2.10.3.  Approach  3:  Require  Member  States  to  dedicate  sufficient  resources  to  their 

permitting   

This approach includes the measures set out in Approach 1 and 2.  

It  would  also  introduce  a  requirement  on  Member  States  to  dedicate  sufficient  resources  to  permitting 
procedures for Strategic Projects. Following the example similar provision in the field of competition and 
consumer protection law, Member States would, more in particular, be required to ensure that responsible 

112 Similar to the time limit included in the TEN-E Regulation for cross-border energy infrastructure projects (18 months) or the RED 
II Directive for renewable power plants (24 months).  

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authorities  have  a  sufficient  number  of  qualified  staff  and  sufficient  financial,  technical  and  technological 
resources necessary for the effective performance of their functions. 

5.2.11. 

Pillar E.2 – Access to finance  

5.2.11.1.  Approach  1:  Encourage  setting  up  of  Investment  Platform,  leveraging  finance 

through existing instruments  

Under this approach, no new funding instruments outside the possibilities of the current framework would be 
established, but the Commission would work towards an extended use of the existing possibilities and to tie 
them  as  closely  as  possible  to  the  Strategic  Projects.  This  would  include  fostering  the  setting  up  of  an 
investment  platform  under  InvestEU,  which  specifically  supports  CRM  projects.  This  would  require  an 
Implementing Partner that has a valid Guarantee Agreement with the Commission (e.g. the Agreement with 
the EIB that administers 75% of the Commission’s guarantee allows to fund raw materials projects), which 
enables  the  EU  guarantee  and  helps  attracting  additional  funding  from  private  and  public  sources.  Under 
InvestEU a wide variety of financial instruments can be provided, for example loans, equity or hybrid products. 
An InvestEU Advisory Hub on CRM would be set up to support provide technical assistance and advisory 
services to project promoters (as well as financial intermediaries), including for the creation of the investment 
platform. Additionally, the use of other existing funds for domestic use (RRF, Innovation Fund, Cohesion 
Funds, etc.) should be promoted and fostered for these projects. For CRM projects abroad funds aiming at 
international spending would be used (NDICI, EFSD+, IPA, etc.).  

5.2.11.2.  Approach 2: Dedicated CRM Fund with Member State contributions and limited 

EU contribution from existing sources 

In addition to approach 1, the Board, with a dedicated standing sub-group consisting of financial experts from 
the Member State as well as the Commission, would provide support to Strategic Projects in access to finance. 
It  would  point  to  existing  sources  that  could  provide  funding,  including  on  level  of  the  Member  State, 
international financial institutions, national promotional banks and the Union.  

The support from public sources would be applied to crowd-in private money and increase the leverage. It 
would focus on filling the remaining gap where the market struggles to finance it due to market failures.  
Despite these efforts, significant gaps would persist in the funding landscape. For example, cohesion funding 
provides only limited opportunities for investment in wealthier regions of the EU, where geological resources 
for extraction, or energy availability for refining may be better; most other relevant funds are directed either 
at innovative projects or projects directly contributing to positive environmental and climate impacts (without 
considering the role of CRMs in enabling clean technology). Importantly, current funding conditions do not 
address strategic autonomy as a goal (even though the Trade Policy Review and other official strategy papers 
have  endorsed  this  concept)  while  investments  in  areas  such as  CRMs  are  essential  for  this  objective.  An 
important project about, for example, rare earth extraction in the north of Sweden would therefore still struggle 
to attract funding.  

Where public support qualifies as State Aid, existing State Aid rules would be respected. The support from 
public sources would be applied to crowd-in private money and increase the leverage. It would focus on filling 
the remaining gap where the market struggles to finance it due to market failures. Supported projects would 
also need to show their long-term economic viability under functioning market conditions, the aim would not 
be to support that permanently require operational support.  

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Therefore, the Commission would work with interested Member States to set up a dedicated CRM Fund to 
further  support  CRM  projects,  including  Strategic  Projects.  This  Fund  would  require  Member  State 
contributions and a contribution of existing EU sources to leverage this money with private financing113.  

To ensure the European dimension and to get closer to closing the large investment gap as shown in the access 
to finance part of the problem section, existing European resources would also be used. The necessary mix of 
different financial instruments would depend on the project’s specificities, notably the stage of the value chain 
(e.g. risk capital, loans). The Fund’s purpose would be to support the CRM value chain in Europe and partner 
countries abroad, in particular Strategic Projects, and to generate a return on investment. The Fund should be 
able to provide loans and equity to projects along the entire CRM value chain, focussing on Strategic Projects. 
Grants should also be considered but depend on the type of financial resources and set up of the Fund.  

The support from public sources would be applied to crowd-in private money and increase the leverage. It 
would  focus  on  filling  the  remaining  gap  where  the  market  struggles  to  finance  it  due  to  market  failures. 
Supported  projects  would  also  need  to  show  their  long-term  economic  viability  under  functioning  market 
conditions, the aim would not be to support that permanently require operational support.  

5.2.11.3.  Approach 3: Dedicated CRM Fund with additional Commission contribution and 

Member State contribution 

In addition to approach 1, the Commission would set up a dedicated CRM Fund that combines new EU money 
with Member State contributions, leveraging private investments to support CRM projects along the value 
chain in Europe and abroad, prioritising Strategic Projects. It could be managed by the governance structure 
(i.e. the board or operational capacity, cf. Pillar C). The CRM Fund would be able to provide loans, equity and 
grants for investment support, in compliance with State aid rules. 

This  Fund  would  provide  a  common  European  approach  to  funding  CRM  projects.  With  the  appropriate 
endowment,  it  would  be  able  to  provide  more  and  riskier  financing,  and  could  also  be  less  bound  by 
profitability considerations and operate more freely (compared to the fund considered under approach 2) to 
effectively address proven market failures.  

5.2.12.  Pillar F – Waste legislation 

5.2.12.1.  Approach 1: Adoption of a Commission Recommendation targeting small consumer 

electronics and announcements of future CRM circularity actions 

  The Commission would adopt (as part of the CRM Act package) a Recommendation on take-back 
schemes for small consumer electronics, to improve the return of used and waste mobile phones, 
tablets and laptops, which contain significant amounts of critical raw materials.  

  The Communication accompanying the CRM Act would announce that the upcoming (Q2 2023) 
joint review of the  Directive on end-of life vehicles and the  Directive on the type-approval of 
motor vehicles with regard to their reusability, recyclability and recoverability (3R) will include 
provisions to  support recovery  of  CRMs    from  end-of-live  vehicles  and use of  recycled  CRM 
content in new vehicles. 

  The  Communication  accompanying  the  CRM  Act  would  announce  (for  Q1  2024)  upcoming 
secondary  legislation  under  the  current  WEEE  Directive  to  amend  its  Annex  VII  on  selective 
treatment for materials and components of WEEE to include a list of CRM-rich electrical and 

113 Depending on the design and governance of the upcoming Fund, its support may qualify as State aid, in which case State aid rules 
will apply. 

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electronic equipment and components thereof. It would also announce the launch of a preparatory 
study for the identification of such CRM-rich EEE and components. 

  The Communication accompanying the CRM Act would announce an upcoming review of the 
WEEE  Directive,  assessing  possibilities  of  introducing  information  requirements  (on  CRMs 
contained  in  electrical  and  electronic  equipment),  design  requirements  (for  dismantlability  of 
CRM-rich components) – in synergy with Ecodesign provisions –  and separate collection and 
recovery targets for a list of CRM-rich electrical and electronic equipment. 

  The Communication accompanying the CRM Act would announce actions to introduce EU end-

of-waste criteria for the most important waste streams containing CRMs.  

  The Communication accompanying the CRM Act would announce (for Q2 2024) a proposal to 
introduce specific waste codes for Lithium-ion batteries and intermediate waste streams (“black 
masses”) under the European List of Waste.  

  The Communication accompanying the CRM Act would announce (for Q2 2023) the launch of 
an Ecodesign preparatory study on potential product-specific requirements on recycled content 
and on scarce, environmentally relevant and critical raw materials, which would be followed up 
by implementing measures. It would also note the possibilities to set relevant requirements for 
CRM-rich products under the proposed Ecodesign for Sustainable Products Regulation. 

These measures would need further analysis in dedicated assessments. 

5.2.12.1.1. 

Approach  2:  Targeted  amendment  of  the  Extractive  Waste  Directive  and 

certain circularity provisions in the CRM Act 

  The  Commission  would  adopt  (as  part  of  the  CRM  Act  package)  an  amending  Directive  to  the 
Extractive Waste Directive, to introduce targeted changes aimed at increasing CRM recovery from 
extractive waste. The two main measures would be to require: 

1.  operators  of  extractive  waste  sites  to  perform  an  economic  pre-feasibility  study  of  the 
potential  to  recover  CRM  from  the  extractive  waste  generated  (as  part  of  the  waste 
management plans under Article 5), and  

2.  Member States to create a database of all closed extractive waste sites, search administrative 
records and perform geochemical sampling to identify quantities and concentrations of CRMs 
on these sites, and publish such information in order to encourage CRM recovery projects on 
those closed waste sites. 

The  CRM  Act  would  include  an  obligation  for  Member  States  to  develop  national  circularity  strategies, 
addressing  areas  of  national  competence,  such  as  waste  collection  and  treatment  systems,  national  R&I 
programmes for CRM recycling technologies and CRM substitution, and to gather data on the most important 
product and waste streams and stocks containing CRMs on their territory. 
5.2.13.  Pillar G - Actions on standards for the critical raw materials value chain 

5.2.13.1.1. 

Approach 1: Increase efforts to have EU rules and principles reflected in 

international standards  

This approach would include several actions to leverage this position specifically in relation to critical raw 
materials,  with  the  aim  of  ensuring  that  the  principles  and  values  underlying  relevant  EU  legislation  are 
reflected in international technical standards on CRMs, especially standards for ensuring the sustainability of 
industrial processes involved in the CRM value chain.    

This  approach  would  promote  a  more  strategic  and  coordinated  approach  to  international  standardisation 
activities by helping Member States, EU standardisation bodies and EU industries more effectively coordinate 
and share resources in support of international standardisation processes.  

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5.2.13.2.  Approach  2:  Mandate  development  of  standards  regarding  relevant  industrial 
processes   

In  addition  to  approach  1,  this  approach  would  look  beyond  the  EU’s  contribution  to  international 
standardisation  efforts  by  also  providing  direct  support  for  the  development  of  European  standards  and 
standardisation deliverables on the sustainability of CRM-related industrial processes.  

Based on the priorities set by the HLF and ERMA working groups, the Commission would request CEN to 
develop e,g, technical specifications, technical reports, workshop agreements or European standards.  

The development of standards following the mandate provided by the Commission to standardisation bodies 
is likely to take up to three years. 

5.2.13.3.  Approach 3: Set essential requirements regarding relevant industrial processes and 
mandate development of related harmonised standards  

In  addition  to approach  1, this  approach  would  include  the  setting  of essential requirements  related to the 
sustainability of CRM-related industrial process, e.g. on the water use and resource efficiency of extraction 
and  recycling  processes for  lithium.  Following  a  similar approach  to  the  New Legislative  Framework,  the 
Commission  would  issue  standardisation  mandates  for  CEN  to  develop  harmonised  European  standards, 
providing a presumption of conformity with the requirements to which they are linked.   

In addition to operationalising such requirements (allowing responsible economic operators to more easily 
apply  them  and  competent  authorities  to  more  easily  enforce  them),  the  creation  of  harmonised  European 
standards would provide an even stronger basis for European leadership in international standardisation fora.  

5.2.14.  Pillar H – Environmental footprint of critical raw materials 

5.2.14.1.  Approach 1: Set minimum requirements for certification schemes for sustainable 
CRMs  

This approach focusses on the reliability of general environmental claims (e.g. ‘this lithium was produced 
using sustainable practices’) made by operators selling CRMs on the EU market. The availability of specific 
qualified information on the environmental footprint is addressed in Approach 2 below 

5.2.14.2.  Approach 2: Require declaration of the environmental footprint of CRMs sold in 
the EU 

In  addition  to  approach  1,  this  approach  would  entail  requiring  economic  operators  to  declare  the 
environmental footprint of CRMs they sell on the EU market, as a market access requirement. This will help 
bring about transparency on the environmental footprint of CRMs and help shift the Union market towards 
lower impact CRMs, regardless of where they are produced.  

This requirement would only apply for CRMs for which there are material-specific calculation rules available. 
Before mandating the rules for the calculation of the environmental footprint of CRMs, a consultation process 
with  industry  and  Member  States  seems  necessary  to  fine-tune  those  rules  and  clarify  how  they  will  be 
maintained  over  time.  The  material-specific  calculation  rules  would  therefore  be  provided  by  means  of 
implementing acts prioritising CRMs with relatively higher demand and environmental impacts.  

Given the wide variety of environmental profiles of the different CRMs, the Commission would be empowered 
to, when specifying calculation rules, allow the footprint declaration to be limited to one or a subset of impact 
categories where this is justified based on the environmental profile of the different materials  

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The calculation rules would be based on the Product Environmental Footprint (PEF) method.1  

The requirement would in principle not apply to final products containing relevant CRMs. However, where 
the footprint of CRMs included in product is specifically referenced in any relevant product documentation, it 
would be required to justify that claim and refer to the declared footprint of the CRMs used.    

5.2.14.3.  Approach  3:  Putting  in  place  a  mechanism  for  setting  performance  classes  and 

maximum thresholds for environmental footprint 

In  addition  to  approach  1  and  2,  this  approach  would  consist  in  introducing  a  mechanism  to  set  footprint 
performance classes to further support market differentiation and the setting of maximum footprint thresholds 
for specific CRMs placed on the EU internal market. Such measures could have adverse effect on the security 
of supply for CRMs. Therefore, in light of this risk and in order to avoid any negative effect on supply security, 
the  following  measures  would  be  gradual,  progressive  and  evidence-driven.  Indeed,  for  each  maximum 
footprint threshold, there should be dedicated assessments conducted. 

This  approach  would  contain  the  following  gradual  steps:  First,  as  there  is  not  yet  sufficiently  detailed 
statistical information on the relative footprints of CRMs, the Commission would gather such information 
through the declarations proposed in approach 2 through secondary legislation. Second, once sufficient market 
knowledge is acquired through step 1, relevant CRMs would be categorized in an A-G scale based on their 
footprint. Third, a threshold would be identified, which would correspond to correspond to the limit values of 
the lower or lowest classes in the performance class scale. 

The  introduction  of  maximum  thresholds  the  third  step  would  only  be  possible  when  accompanied  by  a 
proportionate and dedicated assessment, which would take into account the relative distribution of the footprint 
values  for  the  relevant  CRMs  placed  on  the  Union  market,  the  extent  of  progress  in  the  reduction  those 
footprints as a result of the information requirement referred to in approach 2, and the effective and potential 
contribution of a threshold to the Union’s environmental and climate objectives. In addition, this assessment 
would take close account of the potential effects of thresholds on EU imports of the relevant CRMs, ensuring 
that the level of the thresholds is set so as to prevent potential bottlenecks for EU supply of CRMs. 

This approach would steer relevant economic operators to reduce the environmental footprint associated with 
their  CRMs  and  would  ban  from  the  market  those  materials  with  the  relative  highest  footprint.  Economic 
operators should be given sufficient time to adjust their production facilities. 

As explained, this measure would need further analysis in dedicated assessment. 

Interaction of approach 2 and 3 with other initiatives: The measures outlined in approaches 2 and 3 related 
to the environmental footprint of CRMs are in full coherence with existing initiatives related to the life-cycle 
impacts of products and materials, and would help contribute to achieving similar environmental aims. 

Batteries  Regulation:  the  recently  adopted  batteries  regulation  contains  similar  measures,  focusing  on  the 
carbon footprint of larger batteries placed on the EU market, i.e. combining information requirements with 
potential thresholds to be set gradually. Such batteries include several critical raw materials, including lithium 
and cobalt, and the footprint of such materials would be included in a battery’s overall footprint. Footprint 
requirements on critical raw materials contained in batteries add value for several reasons. Firstly, they would 
apply also to CRMs sold on the EU market for other applications than battery manufacturing.114 Secondly, a 
material-level  footprint  would  also  cover  the  EU  market  for  battery  materials  used  to  produce  batteries 
intended  for  export  (to  which  the  Battery  Regulation  does  not  apply).  Lastly,  the  availability  of  footprint 

114 Globally, 56% of lithium is used for rechargeable batteries, other primary uses are within the glass- and ceramics industry and 
for lubricating greases. Similarly, 49% of cobalt is used for rechargeable batteries. Other uses of cobalt are in superalloys and 
composite materials for e.g. turbine engines and cutting tools. See 
https://ecodesignbatteries.eu/sites/ecodesignbatteries.eu/files/attachments/EDbatteryFollowupWP4finalpreprint.pdf  

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information will be beneficial for battery manufacturers that need to calculate the footprint of their batteries 
intended to be placed on the EU market. Both sets of calculation rules are intended to be based on the PEF 
method and it should be ensured that they are complementary. 

Ecodesign  for  Sustainable  Products  Regulation  (ESPR):  the  proposed  revision  of  the  current  ecodesign 
directive is intended to widen its scope beyond energy-related product to allow the setting of wide range of 
requirements on a broad range of products, in order to improve their environmental sustainability, and provides 
for the introduction of a Digital Product Passport. Although the product parameters to be regulated (either by 
information  or  performance  requirements)  should  be  determined  at  product-specific  level,  the  possible 
parameters include the carbon and environmental footprint of products. However, it is important to note that 
the ESPR is proposed to focus only on final products (e.g. fridges) and intermediate products (e.g. steel). As 
such,  it  does  not  allow  to  set  footprint  requirements  for  CRMs.  Where  the  ESPR  imposes  a  footprint 
requirement on a product containing CRMs for which a footprint requirement also applies, the material-level 
footprint information can feed into the product level footprint calculation. 

Corporate Sustainability Due Diligence Directive (CSDD): The CCSD applies only to companies of certain 
size, including those active in the raw materials sector, and requires companies and their directors to,  inter 
alia set up due diligence processes that should include identification and prevention actual or potential adverse 
human  rights  and  environmental  impacts  in  the  company’s  own  operations,  its  subsidiaries  and  its  value 
chains. This initiative may not lead to the availability of complete product-level footprint information as the 
scope  of  environmental  impacts  to  be  taken  into  account  is  determined  by  a  list  of  relevant  international 
treaties, and does not encompass all PEF impact categories. However, where relevant, the calculation of a 
material-level footprint could contribute to the effective implementation of a due diligence policy.     

Carbon  Border  Adjustment  Mechanism  (CBAM):  The  recently  adopted  CBAM  is  intended  to  address 
greenhouse gas emissions embedded in certain carbon intensive imported goods, in order to prevent the risk 
of carbon leakage. CBAM was designed to function in parallel with the EU’s Emissions Trading System (EU 
ETS), to mirror and complement its functioning for imported goods. Given this specific aim, CBAM will not 
lead to making the footprint of all relevant goods placed on the EU transparent nor will there be any thresholds 
for embedded emissions. In addition to this fundamental difference, it should be noted that the current scope 
of the CBAM does not include an CRMs and that the CBAM only focusses on a single PEF impact category 
(climate change).  

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5.3.  Description of the policy options 

The approaches for each pillar were used to define realistic policy options, which represent combinations of 
different approaches. 

In order to avoid an unmanageable multiplicity of  options, measures were combined into the three distinct 
options that represent different levels of political ambition. The combination of measures has been designed 
to ensure adequacy between the scope of the tasks established and the level of resources required to perform 
them. The tasks defined in monitoring, stockpiling or companies’ risk preparedness pillars, for example, are 
intrinsically  linked to the governance  structure’s  ability  to  deliver them,  and  are  therefore  more  ambitious 
under option 3 which foresees the creation of an external operational capacity to perform them. This is meant 
to avoid the risk of under-implementation of the measures presented. 

For  some  of  the  pillars,  the  choice  of  the  preferred  policy  approach  is  straightforward  considering  the 
stakeholders’ feedback, proportionality and subsidiarity of measures. In such cases, some of the approaches 
are not included in any of the options, and annex 5 explains for each of them why they were discarded at an 
early stage. For others, in particular for far-reaching measures, the views of different stakeholders including 
Member States and businesses differ, hence the different approaches for these blocks have been included in 
the different policy options.  

For the reasons provided in the Section 5.1, the measures presented below mainly focus on European value 
chain; global value chain of critical raw materials remain nonetheless covered by dispositions on monitoring 
or on environmental footprint. 

The overview of the composition of the policy options resulting from the analysis in section 5.2 is presented 
in the table below. These three policy options will be analysed in detail in section 6.  

Policy option 1 

TABLE 2. OVERVIEW OF POLICY OPTIONS 
Pillars 
A. 
critical 
strategic 
materials 

Defining 
and 
raw 

Approach 3:  
Legal definition of both critical and strategic raw materials 

Policy option 2 

Policy option 3 

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Setting 
B. 
strategic 
raw 
materials targets 

Approach 1:  
Developing  a  framework 
to  set  EU-level  guiding 
targets  for  strategic  raw 
materials 
regarding 
capacity 

Approach 2:  
Setting EU-level targets obliging the governance structure 
to work toward them through Strategic Projects proposals 
(c.f. pillar G) and performance review  

C. Governance 

C.1  Monitoring 
and 
risk 
assessment 

Approach 2:  
Developing a dedicated EU CRM board supported by a 
network  of  national  agencies  and  operational  capacity 
within the Commission 

Approach 2:  
Developing monitoring capacities and risk assessment 

Strategic 

C.2 
stocks 

Approach 2:  
Ensuring EU level coordination and stock assessment for 
the stockpiling of strategic raw materials 

C.3  Company 
risk 
preparedness 

Approach 2:  
 Developing  requirements  on  company  diversification 
and stockpiling 

and 

Approach 3:  
Developing  an  operational 
capacity  as  a 
separate 
structure  to  implement  the 
CRM Act's provisions 
Approach 3: 
Approach  2  +  Developing 
risk 
monitoring 
management capacities 
Approach 3: 
Approach 2 + Enabling the 
of 
purchase 
common 
strategic raw materials 
Approach 3: 
Approach  2  +  providing 
foster 
direct  support 
companies’ resilience   

to 

D.  Exploration 
efforts in the EU 

E. Support to the 
value chain 

of 

Approach 1:  
for 
Requirement 
Member States to report 
the  mapping  and 
on 
evaluation 
the 
strategic  (and  critical) 
mineral  resources  and 
extractive waste areas in 
the EU 
Approach 1:  
Requiring  Member  States 
to set up strategies to work 
towards  achieving  more 
stable  and  secure  supply 
of CRM  

Approach 2:  
Requirement for Member States to report on, develop and 
implement  public  exploration  programmes  for  strategic 
(and critical) mineral resources and extractive waste. 

Approach 2:  
Strategic Projects, in Europe and in third countries  

E.1  Permitting 
procedures 

Approach 1: 
CRM  projects 
considered 
in 
planning  

to  be 
spatial 

Approach 2: 
Approach  1  +  Mandatory 
make 
measures 
permitting 
for  Strategic 
Projects more predictable 

to 

Approach 3: 
Approach  2  +  Require 
Member  States  to  dedicate 
additional sufficient staff to 
their permitting handling 

E.2  Access 
finance 

to 

EN 

Approach 1:  
Encourage  the  setting  up 
of an Investment Platform 
for  the  CRM  value  chain 
finance 
and 
through 
existing 
instruments 

leverage 

Approach 2:  
Approach  1  +  Promote and 
advise  the  setting  up  of  a 
to 
dedicated  CRM  fund 
combine  Member  State 
funding  with  contributions 
from  existing  EU  funds,  in 
compliance  with  State  Aid 

Approach 3:  
Approach  1  +  Set  up  a 
dedicated  CRM  Fund  with 
Commission 
new 
contribution  and  Member 
State contribution, managed 
by  governance  structure,  in 
compliance  with  State  Aid 

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rules.  It  should  be  able  to 
provide loans and equity to 
projects  in  all  stages  of  the 
CRM  value  chain.  Grants 
could be considered as well, 
depending  on  the  types  of 
resources available. 

rules.  It  should  be  able  to 
provide  loans,  equity  and 
grants  to  projects  in  all 
stages  of  the  CRM  value 
chain. 

Approach 2:  
Approach 1 + Targeted amendment of the Extractive Waste 
Directive and certain circularity provisions in the CRM Act 

Approach 2: 
Approach  1  +  Mandate  development  of  standards  and 
standardisation  deliverables  regarding  relevant  industrial 
processes 

Approach 3: 
Approach  2  +  Putting  in  place  a  mechanism  for  setting 
performance  classes  and  maximum  thresholds  (through 
delegated acts) 

F. 
legislation 

Waste 

G.  Actions  on 
standards for the 
raw 
critical 
materials  value 
chain 

H. 
Environmental 
footprint 
critical 
materials 

of 
raw 

a 

of 

Approach 1 
Adoption 
Commission 
Recommendation 
targeting  small  consumer 
electronics 
and 
announcements  of  future 
CRM circularity actions 
Approach 1:  
Increase  efforts  to  have 
EU  rules  and  principles 
reflected  in  international 
standards 
Approach 2:  
minimum 
Set 
requirements 
for 
certification  schemes  for 
sustainable CRMs + 
Require  declaration  of 
environmental 
footprint 
for CRM sold in the EU 

5.4.  Aspects of the main problem tackled through actions outside the scope of this impact assessment 

The pillars and approaches identified above are not per se sufficient to tackle the overall problem described in 
section 2. They are constrained to the options and measures that can be best tackled through direct regulatory 
actions, and that mainly focus on domestic dimensions, notably the reinforcement of the European value chain, 
its resilience to supply disruptions and the sustainability of its supply. Other actions are necessary to contribute 
to  the  main  objective,  notably  on  external  diversification;  skills  and  research  and  innovation.  In  all  cases, 
actions are already ongoing, but should be further strengthened in the context of the Critical Raw Materials 
Act in order to 

-  Ensure the diversification of EU supply 

Another key action to directly target the lack of supply security remains the pursuit of a diversification strategy, 
as engaged with Strategic Partnerships since the 2020 Critical Raw Materials Action Plan or through Free 
Trade  Agreements  (c.f.  Section  5.1).  The  Communication  attached  to  the  Critical  Raw  Materials  Act  will 
contain new initiatives that aim to address this matter directly. (c.f. Section 5.1). 

-  Develop adequate skills to support the CRM value chain 

Ongoing actions are contributing to developing the right skill sets for the CRM value chain to develop in the 
EU, responding to the identified problem driver 2.4. For instance, the EU-funded research project “Intermin”115 

115 https://interminproject.org/, co-funded under Horizon 2020 from 2018 to 2021.  

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identified, in particular for the mining sector, a shift towards higher cognitive and complex problem-solving 
skills, the need to re-skill and up-skill the workforce, the need to support mobility and rotation, the need to 
attract talents from other sectors and the need to increase collaboration with universities. It also underlined the 
need  for  social  skills  in  the  sector,  for  instance  skills  related  to  mining  rehabilitation  and  waste 
management116.The Communication will include other actions to tackle this issue, while in parallel promoting 
the development of relevant skills in the public sector. 

-  Strengthen EU efforts in research and innovation 

Ongoing  actions  are  supporting  research  and  innovation  efforts  to  ensure  the  deployment  of  adequate 
technologies, such as more sustainable exploration, mining, processing, refining, recycling opportunities or 
substitution development, responding to the identified problem driver 2.5. 

For instance, under the 2021-2024 Work Programmes of Horizon Europe, calls for proposals on Raw Materials 
are placed under Cluster 4 (Digital, Industry and Space). In total, the Commission has devoted around EUR 
550  million  for  raw  materials  R&I  in  exploration,  extraction,  processing,  refining,  recycling,  substitution, 
Earth Observation and policy support actions in this period. Initial R&I results are expected in 2026 when first 
projects will finish their work. Their further uptake to a more developed Technology Readiness Levels or 
implementation by the industry will be a necessary activity at that stage.  

The uptake of results is an issue for projects originating from H2020, where around EUR 600 million was 
devoted to around 70 technology projects in raw materials. For instance, a rare earths separation technology 
has  been  positively  tested  in  certain  sites  and  now  requires  ore  input  from  full  scale  extraction  activity. 
However, this can only happen when the mining site obtains necessary permits to start extraction activity. 
Thus,  the  regulatory  measures  to  strengthen  the  EU’s  CRM  value  chain  will  also  allow  to  validate  such 
research and innovation actions. 

Regarding  substitution,  following  the  magnesium  shortage  in  2021,  the  EU  funded  a  project  to  substitute 
magnesium in aluminium alloys for light weight mobility applications. The results are expected in 2024, three 
years  after  the  shortage  on  the  market.  A  more  forward-looking  approach  to  substitution,  covering  also  a 
broader set of raw materials and applications, could be a priority for future R&I projects. 

The Communication will announce actions to strengthen the EU’s leadership in the support for R&I projects 
on raw materials, notably by improving the coordination and coherence between regional, national and EU 
funding for critical raw materials R&I. 

-  Address the lack of public acceptance 

The measures on R&I and skills (presented above), as well as on the environmental footprint of CRMs and 
circularity  of  CRMs  (see  policy  pillars  and  options  in  the  next  chapters)  will  contribute  to  reducing  the 
environmental  impacts  associated  with  the  CRM  value  chain.  This,  combined  with  more  proactive 
communication by companies and policymakers on the high level of environmental protection in the EU, can 
contribute to addressing the lack of public acceptance for CRM projects in the EU identified as problem driver 
2.7. Similarly, the development of strategic raw materials targets clearly linking the availability of CRM to 
the EU’s green and digital transition objectives, the selection of Strategic Projects, and the general discussion 
around the measures taken under this initiative should contribute to raising awareness on the important role of 
CRM in our economy and society.  

116 https://interminproject.org/wp-content/uploads/The-skills-needed-in-the-mining-sector-in-the-21st-century.pdf  

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6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?117 

The  impacts  of  the  different  policy  options  are  assessed  below  based  on  the  results  of  the  open  public 
consultation, internal analysis and external studies. Only the relevant types of impacts affecting each pillar are 
assessed. Overall, the initiative is not expected to have an impact on fundamental rights. It is also considered 
that all measures that include or imply information sharing or reporting should be implemented in line with 
the principle of digital by default. 

Stakeholders  overall  call  for  additional  EU  support  in  the  area  of  critical  raw  materials.  59%  of  the  259 
respondents to the public consultation (OPC) agree or strongly agree that industry is not able to tackle critical 
raw materials sourcing challenges on the global market without further EU policy intervention, and 72% agree 
or strongly agree that EU policies are currently insufficient to effectively manage supply chain disruptions, 
shortages and prices hikes. 

6.1.  POLICY OPTION 1 

6.1.1. Economic Impacts  

6.1.1.1. 

Impact on companies 

Under option 1, companies would benefit from incremental support to develop the EU value chain and ensure 
their resilience, as analysed below. 

There would be two lists of raw materials (Pillar A), one of critical and one of strategic raw materials, each 
based on a transparent methodology, and each defining the scope of different measures under the following 
pillars (see Annex 9). Most stakeholders support complementing the current critical raw materials list with a 
list of strategic raw materials to provide focus for actions under this initiative. 70% of all OPC respondents 
said it would be useful to guide investment decisions of companies and financial institutions and that it should 
be used to target public support at EU and national level. 

Companies  would  benefit  from  the  alignment  of  EU  support  toward  strategic  raw  materials  through  the 
dedicated EU supply capacity targets (Pillar B. Those targets, albeit aspirational under this option, would also 
focus and guide investors’ decisions. 73% of respondents in the public consultation agreed or strongly agreed 
that setting EU objectives for increasing domestic production capacity along different stages of the value chain 
(exploration, extraction, refining, recycling) to guide national and European efforts in relation to the materials 
on the strategic list would be helpful. 

Option 1 would enable the development of monitoring capacities and risk assessment ahead of crisis (Pillar 
C.1), based on a network of Member States agencies and internal capacity in the Commission. Stakeholders 
indicated strong support for enhanced cooperation between national authorities or agencies in charge of critical 
raw materials (data exchange, common monitoring, etc.): 82 % of respondents agreed or strongly agreed that 
such measures would support the EU CRM value chain. Stakeholders also converged on focusing the scope 
of the monitoring on projects evolution, demand and supply developments, and trade flows (further details in 
annex 2). 

Limited administrative cost is associated with the reporting obligations for large companies operating in the 
critical raw materials value chain: it is estimated at EUR 49.000 in total for all 64 companies concerned to 
report twice a year to the governance structure (see calculations in Annex 4). The monitoring tools developed 
above would directly benefit companies by enabling cost saving measures on their own monitoring system, 
thereby lowering or offsetting the costs created by information requests. Overall, companies of all sizes would 

117 Note: It is advisable to read the detailed description of policy approaches in section 5.2 and for more details in annex 5 in order to 
understand better the exact measures being assessed in the following. 

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directly benefit from the regular publication of up-to-date information on supply risks that would enable them 
to tailor their mitigation strategies, as indicated by 70% of respondents in the public consultation.  

This option’s measures on strategic stockpiling (Pillar C.2) relate to the coordination of national stockpiles 
for  strategic  raw  materials,  which  would  not  have  a  direct  impact  on  companies.  This  option  is  the  most 
supported by stakeholders, with 41% preferring an EU level guidance on voluntary stocks at national level. 
Member States showed overall support for this coordination in the response to an RMSG survey on stockpiling, 
and the European Parliament also called on the Commission in its 2021 report to encourage “Member States 
to carry out strategic stockpiling as part of a coordinated approach”. Conversely, “mandatory stockpiling” was 
the least supported option in the open public consultation with only 14% of respondents in favour (7% for 
companies).  

Coordination  would  bring  additional  benefits  by  incentivising  Member  States  to  strengthen  their  strategic 
stocks, adding an extra-layer of security for the companies whose value chain comprise strategic raw materials. 
It would also respect subsidiarity with regard to the building or maintenance of stockpiles up to Member States 
without adding additional targets.  This coordination amongst national stockpiles ahead of any crisis would 
also ensure a better crisis preparedness in the event of activation of any vigilance or crisis response framework 
mechanism  which  can  cover  raw  materials  (including  strategic  raw  materials),  whether  it  is  a  horizontal 
instrument like the SMEI or sectoral one like Chips Act. A coordinated EU approach to the stockpiling of 
strategic raw materials also appears as a key element ahead of the new orientations on critical minerals and 
materials of the International Energy Agency (IEA)118, of which 20 EU Member States are members. The 
launch of an "IEA voluntary critical minerals security program" that comprises stockpiling would benefit from 
a coordinated EU participation. 

To ensure companies' risk preparedness (Pillar C.3), this option would ensure that companies using SRM 
invest  in  their  resilience  and  take  into  account  the  real  costs  of  SRM  production,  through  actions  on 
diversification,  stockpiling  or  other  mitigation  strategies,  notably  the  conduct  of  stress  test  to  assess  the 
vulnerability of their supply chains.  It would also ensure companies using SRMs to support the emergence of 
an EU value chain and achieve diversification of their supply by purchasing, when available, from European 
sources. The direct adjustment costs for all the companies affected (large companies using SRM in strategic 
sector) in the Single Market would be EUR 1 million per year (see Annex 4). 

Regarding exploration (pillar D), stakeholders (e.g. EuroGeosurveys, the association of geological surveys of 
Europe) indicated their support for availability and EU level harmonisation of geological data in line with 
United Nations Framework Classification for Resources (UNFC) and the INSPIRE directive.119   This would 
have  positive  effects  for  companies  along  the  value  chain,  as  it  would  foster  additional  investment  in  the 
extraction stage.  

The requirement for Member States to set up strategies to support the value chain (pillar E) and contribute 
to the overall European targets would raise awareness on the risks related to CRM supply and prompt the 
consideration  of  policy  levers  available in  Member  States (e.g.  mining  laws,  investment  support).  If  well-
crafted and implemented, these strategies also help companies implement relevant projects and reduce their 
supply dependencies. 

Regarding permitting (pillar E.1), this option is expected to have a positive effect on companies by decreasing 
the cost and duration of completing permitting procedures. The structural integration of CRM projects into 
spatial plans combined with the application of the SEA Directive to those plans is expected to decrease the 
costs  of  individual  permitting  procedures  for  companies.  The  SEA  Directive  provides  for  an  overall  and 
cumulative  assessment  of  the  environmental  impacts  of  planned  activities.  As  such,  it  would  provide  a 

118 2022 IEA Ministerial Communiqué - News - IEA 
119 See EuroGeosurveys position paper submitted in response to the Call for Evidence. 

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framework for the easier identification of areas suitable for CRM projects or of less harmful alternatives for 
associated activities and infrastructure at an early planning stage. It would also provide an information basis 
for subsequent more specific environmental assessment performed by project developers. The extent of the 
cost decrease (including administrative costs) is difficult to quantify, as it is highly case-specific depending 
on the extent to which project developers make use of spatial plans and the related information.  

The setting up of an InvestEU platform and stronger use of existing financing instruments to improve access 
to finance (Pillar E.2) would lead to a more effective use of resources to support the EU CRM value chain. In 
particular, domestic projects could be supported through a dedicated InvestEU platform and projects in third 
countries  could  benefit  from  greater  use  of  EU  external  financing  instruments.  This  option  would  create 
benefits for companies operating in the CRM value chain due to improved access to finance and for companies 
further downstream due to increased accessibility of CRMs. Given the magnitude of the investment needs and 
the possibilities of InvestEU platforms, a total size of EUR 1 billion would represent an ambitious, though 
feasible, target for the InvestEU platform120. Compared to the investment needs outlined above, this would 
equal to 14% of the investment needs in battery raw materials for a domestic production share of 25% by 2030, 
excluding the riskiest undertakings requiring grants, Hence, that would contribute to making Europe’s supply 
more secure, but not by much. This option would not result in additional cost for companies and enjoys broad 
support  with  stakeholders:  73%  of  259  respondents  support  targeting  existing  EU  funds  to  finance  CRM 
projects of particular strategic relevance.  

On  waste  legislation  (Pillar  F),  this  option  would  provide  only  non-binding  measures  (a  Commission 
Recommendation) and announcements for future actions (outside of the scope of this Impact Assessment). If 
the Commission Recommendation on take-back schemes for small consumer electronics is effective, it could 
lead to an increase of the currently very low collection rate of such waste products and thus create economic 
opportunities for the recovery of CRMs by recycling companies.  

Regarding standards (Pillar G), increasing efforts to have EU rules and principles reflected in international 
standards would facilitate increased transparency and sustainability of CRMs placed on the EU market. In 
addition, it is expected to help ensure that relevant international standards reflect or do not conflict with EU 
rules, thereby preventing a potential burden for EU and global companies active on the global market.  

Regarding environmental footprint (Pillar H)121, this option would generate additional cost for companies 
selling CRMs in the EU. First, all companies that choose to make general claims would have to make use of 
certification schemes, the one-off adjustment cost is estimated to be in the range of EUR 3.75 – 10 million for 
those companies (see Annex 4). In addition, for materials for which calculation rules are available, operators 
would be required to declare the environmental footprint. This is estimated to create a one-off  administrative 
cost of EUR 14.55 million for all companies selling those CRMs (see Annex 4). Companies procuring CRMs 
would also benefit from easier access to quality information on the sustainability of CRMs.  

Taken together, the measures considered under PO1 would help boost investment in the EU CRM value chain. 
By  facilitating  access  to  finance,  making  exploration  easier,  taking  account  of  CRM  projects  in  spatial 
planning,  and  making  the  environmental  footprint  of  CRMs  transparent,  PO1  would  make  it  easier  for 
companies to build a business case for new EU-based CRM projects.   

6.1.1.2. 

Impact on SMEs 

The InvestEU guarantee (Pillar E.2) contains a specific window for supporting SMEs, which the Commission 
would work towards using as well. As junior miners (most often SMEs) and exploration projects often struggle 
to attract adequate funding, the use of this window would be particularly beneficial for SMEs. 

120 The InvestEU platform of the Chips Fund, based on the already existing budgetary guarantee, totals EUR 1.5 billion. 
121 See Annex 4 on methodology for assumptions. 

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SMEs would also particularly benefit from the enhanced availability of monitoring and information regarding 
the supply chains of critical and strategic raw materials, as they generally do not have the resources to invest 
into their  own  monitoring  and  risk  preparedness  systems.  Out  of  the  81  companies/business  organisations 
which answered the OPC, 32 are SMEs, and 44% agreed that they would benefit from public monitoring to 
inform them about risks of supply chains disruption (6% disagreed, the rest being neutral or with no opinion). 
59% of SMEs agree that an EU-wide governance capacity with monitoring tasks could help strengthen the 
value chain resilience. Only a slight majority of SMEs agreed that companies lack sufficient information on 
supply risks to take preventive measures (28% agree and 22% disagree), but 72% support measures that would 
enable them to benefit from such information. Finally, similar to the results for all companies, only 3% of 
SMEs favoured mandatory strategic stocks while 43% supported EU-level guidance on strategic stockpiling.  

6.1.1.3. 

Impact on competitiveness 

By strengthening EU companies’ preparedness in case of supply disruptions, this option would increase their 
competitiveness compared to other actors not benefiting from such support.  

The creation of an InvestEU platform would improve financing conditions for some projects and thus improve 
the  competitiveness  of  the  companies  operating  them.  This  would  lead  to  slightly  higher  and  more  stable 
availability  of  critical  and strategic raw  materials  and  would  therefore  increase  the  cost-  and  international 
competitiveness of the European downstream users of those materials marginally.  

Having EU rules reflected in global standards would also help EU companies’ competitiveness. The size of 
these effects is however likely to be minor under this option. 

Regarding  environmental  footprint  (Pillar  G),  this  option  would  have  a  positive  impact  on  the 
competitiveness  of  companies  that  sell  or  produce  CRMs  in  a  more  sustainable  manner.  The  companies’ 
benefits would depend on the impact categories the footprint focusses on. It could for example include refiners 
that  use  decarbonised  energy  to  lower  emissions  or  mining  companies  applying  less  invasive  methods  of 
extraction. Those companies would be able to display their credentials to potential buyers without unreliable 
certification schemes or footprint information creating potential confusion. Companies with low sustainability 
would evidently lose relative competitiveness under this option (though to a limited extent as purchases of 
low-performing or uncertified CRMs would not be prohibited), but thanks to the introduction of a clear and 
reliable methodology, they would have a clearer view of how to improve their sustainability performance to 
increase  their  competitiveness  in  the  future.  On  the  negative  side,  to  the  extent  that  the  cost  of  footprint 
calculations is reflected in the price of CRMs, this measure could have a negative effect on the competitiveness 
of downstream sectors using those CRMs compared to third country companies able to source CRMs without 
this cost increase. Quantifying the economic impact of this measure on CRM prices has not been feasible since 
no methodology is available to estimate the effect in isolation from other cost drivers. More analysis is needed 
and any introduction of maximum carbon thresholds via secondary legislation will be subject to a proportionate 
and dedicated impact assessment. Assessments carried out for platinum can be used to get an indication of the 
potential cost increase. With the full cost of footprint calculations (for all companies)  estimated at 0.07% of 
the European market value (see Annex 4), it potentially translates into an equivalent price increase for EU 
downstream users in case the full price increase is passed on.  

In light of such costs, there is the possible risk that third country operators will divert their exports of CRMs 
to other jurisdictions without the requirement to declare the environmental footprint in order to avoid the costs 
associated with calculating this footprint (potentially partially cancelling out the benefits of improved supply 
security). However, whether this risk materialises will be highly case-specific and will depend on the extent 
to which other jurisdictions will introduce footprint-related measures, the relative importance of selling on the 
EU market for an exporting company and on whether the additional costs of a footprint declaration would 
outweigh the costs of diverting exports.  

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6.1.1.4. 

Impact on competition 

Given the limited ambition of most actions included in this option, and the absence of a selective procedure to 
identify strategically important projects benefiting from privileged permitting procedures and access to special 
funding, it is not expected to have significant impacts on competition. All information and support provided 
under  the  monitoring  and  company  risk  preparedness  pillars  would  be  open  to  all  companies  without 
discrimination.  

6.1.1.5. 

Impact on international trade 

Large EU companies using CRM would have to ensure a higher level of supply diversification, to the extent 
possible (pillar C.3). Such efforts would help support the EU’s engagement in the world, as EU companies 
would become drivers in the quest for new supply sources.  

On standards (Pillar G), the drive for further EU coordination and actions in the international standards setting 
bodies  would  contribute  to  increasing  the  quality  and  availability  of  standards,  contributing  to    the 
development of more sustainable global CRM value chain at the global level. 

Regarding environmental footprint (Pillar H), this option would mean that companies importing CRMs into 
the EU would also need to comply with the recognised schemes for making general environmental claims and 
to declare the footprint of their materials. This would make the sustainability of all CRMs on the EU market, 
including those of third country origin, more transparent and allow the relative footprint of materials to become 
an object of competition on the EU market. This additional transparency on the supply’s sustainability may 
lead to a demand-led drive from the European downstream users for more sustainable CRMs, benefiting (in a 
relatively mild manner) third countries that produce CRMs more sustainably while hurting those that produce 
less  sustainably.  The  costs  for  companies  operating  in  the  EU  market,  whether  European  or  from  third 
countries, would be the same. 

6.1.1.6. 

Impact on Member States (public authorities) 

In total, PO1 would require at least 4 to 7 FTEs (full time equivalent122) per Member State that would be split 
by (see for more detail Annex 11): 

2 FTEs per year for participation to the governance structure; 
1/4 FTE per year for the coordination of strategic stocks; 
1/2 FTE per year for the coordination of data on exploration activities; 
1 to 3 FTEs per year to design and implement strategies supporting the CRM value chain; 

- 
- 
- 
- 
-  Additional FTEs (not quantified) to enforce environmental footprint obligations. 

A measure of particular relevance to Member States is stockpiling. In this respect, option 1, which includes 
EU-level  coordination  and  information  exchange  regarding  national  stockpiles  is  favoured  by  public 
authorities over the alternatives:  46% of public authorities responding to the open public consultation assessed 
as  appropriate  EU-level  guidance  on  voluntary  storage  to  be  organised  at  national  level,  while  EU-level 
coordinated  mandatory  storage  was  widely  rejected  by  public  authorities.  EU-level  coordination  and 
information exchange would diminish overlapping measures and enable additional efficiencies gains across 
EU Member States, thus leading to cost savings, which are however not directly quantifiable.  

122 A full-time equivalent, sometimes abbreviated as FTE, is a unit to measure employed persons or students in a way that makes 
them comparable although they may work or study a different number of hours per week. Glossary: Full-time equivalent (FTE) - 
Statistics Explained (europa.eu)  

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6.1.1.7. 

Impact on the Commission (budgetary implications) 

In total, PO1 would require around 27 FTEs for the Commission, that would be split by (see for more detail 
Annex 11): 

  2 FTEs for ensuring the secretariat of the governance structure, in addition to EUR 75.000 per year of 

organisational costs. 

  17 FTEs for implementing monitoring, data gathering and risks assessment tasks, based on similar 

tasks performed by existing units in the Commission), which can be split as: 

o  10 FTEs for market monitoring; 
o  1 FTE for the management of studies and contracts; 
o  1 FTE for the building of a data set on projects; 
o  5 FTEs for the coordination of information from Member States. 

  3 FTEs for the coordination of national stockpiles information and the development of guidance when 

possible. 

  1 FTE to coordinate the submission of national exploration activities. 
  3 FTEs for assessing the suitability of environmental footprint, developing calculation methods and 

monitor the application of the measures. 
  1 FTE to enforce actions on standardisation. 

6.1.2. Social Impacts 

On waste legislation (Pillar F), this option would improve the collection of mobile phones, tablets and laptops, 
which  tend  to  be  the  most  prominent  CRM-containing  products  in  people’s  lives.  Besides  the  increased 
recovery  of  CRMs,  this  action  would  increase  convenience  for  consumers  and  increase  awareness  of  the 
relevance of CRMs for citizens’ everyday lives. 

Regarding environmental footprint (Pillar H), depending on the strategy to be followed by CRM producers, 
this approach may alter the relative balance of manufacturing jobs between different regions of the EU, as 
companies seek production sites that allow them to achieve lower footprints. However, this advantage may be 
offset  to  some  extent  by  the  possibility  to  purchase  green  energy  certificates,  depending  on  whether  such 
possibility will be permitted by the calculation rules. 

6.1.3. Environmental Impacts 

Regarding permitting (Pillar E.1), the measures are expected to have a positive impact on the environment. 
Structural integration of CRM projects in spatial plans and the application of the SEA Directive to those plans 
would benefit the environment by allowing authorities and project developers to have a better view of the 
overall and cumulative impacts of potential projects. It will help developers to identify suitable sites as well 
as the least impactful alternatives. This can provide the framework for the identification of areas suitable for 
CRM projects, but also  less harmful alternatives for associated activities and infrastructure at an early planning 
state which subsequently decrease the risk of future conflicts between competing uses. 

On waste legislation (Pillar F), this option would likely increase the recovery of critical raw materials from 
small consumer electronics. By reducing the need for primary raw materials by enhancing the  use of secondary 
raw materials, the overall environmental impacts of CRM decreases. 

Regarding  standards  (Pillar  G),  increasing  efforts  to  make  international  standards  reflect  EU  rules  and 
principles has the potential to decrease the environmental impact of CRM production globally. The impacts 
of  projects  taking  place  in  jurisdictions  with  a  less  comprehensive  environmental  framework  than  the  EU 
might be lowered, to the extent that those standards are applied.  

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Regarding  environmental  footprint  (Pillar  H),  this  option  would  have  positive  impacts  by  allowing  EU 
buyers to more effectively reduce the environmental footprint of their consumption. By ensuring that general 
sustainability  claims  are  based  on  trustworthy  and  comprehensive  certification  schemes  and  by  ensuring 
CRMs are accompanied by a footprint based on transparent, reliable and comparable methods (based on the 
EU  Product  Environmental  Footprint123),  sustainable  purchasing  decisions  will  more  likely  lead  to  a  real 
reduction in negative environmental impacts. The environmental benefits of this measure would depend on 
the extent to which buyers drive their consumption decisions based on the information provided. 

Overall, this option is expected to cause no significant harm as it does not promote projects that can affect 
the environment; it only provides tools that can improve the value chain marginally, without lowering any 
environmental acquis. The provisions on exploration only relate to the sharing of information. This option can 
conversely have a positive effect on the environment as described in the paragraph above. 

6.2.  POLICY OPTION 2  

6.2.1. Economic Impacts  

6.2.1.1. 

Impact on companies 

The coverage of the measures, based on a list of critical and strategic raw materials (Pillar A), remains the 
same as under option 1. 

Regarding  targets  (Pillar  B)  directly  set  in  the  regulation,  this  option  would  provide  greater  security  for 
companies,  which  would  be  able  to  set  goals  on long-term  investment  plans. They  are  likely  to  affect  the 
behaviours of companies operating along the CRM value chain, to the extent that they would be clear criteria 
for the selection of Strategic Projects. Therefore, companies that would like to develop a project benefiting 
from the Strategic Project status would be incentivised to focus, to the extent possible, on the strategic raw 
materials as they are covered by the targets. In terms of the overall volume of such investments required to 
achieve  the  targets,  the  analysis  of  investment  needs  (cf.  driver  2.3/Annex  10)  estimates  that  for  example 
investments of EUR 1.7 billion along the rare earths value chain would be required to achieve an EU target of 
supplying 20% of its own needs by 2030, and that investments of EUR 7 billion would be required to supply 
25% of the EU’s battery raw materials needs by 2030. While different regulatory and non-regulatory measures 
would be required to unlock these investments, the setting of targets would provide the overarching political 
mechanism to identify which changes are necessary and coordinate action to follow-through on them. 

The  costs  and  benefits  of  the  governance  structure  (Pillar  C)  and  of  the  sub-pillars  on  monitoring, 
stockpiling and company risk preparedness (Pillar C.1, C.2 and C.3) are the same as in option 1. 

On exploration (Pillar D), this option would benefit companies operating in the early stages of the critical raw 
materials  value  chain  by  providing  access  to  the relevant  mineral  data, thereby  de-risking  investment  into 
targeted exploration. By ensuring that Member States develop actions in exploration, this option is likely to 
enable further investment and decrease costs. Mining companies active in targeted exploration would benefit 
from the regional exploration data (geophysical and geochemical) acquired by Member States and reuse it for 
their benefit, representing a range of several thousands to tens of thousands of euros savings (depending on 
the size of the exploration permit).124 Overall, stakeholders’ responses to the call for evidence support those 
measures. For example, the Swedish (SGU) and Finnish (GTK) geological surveys and the association of the 
geological surveys of Europe (EuroGeosurveys), as well as several private actors, supported promoting an 
efficient and harmonised delivery of Member States’ exploration and mining data. In the public consultation, 

123 Commission Recommendation of 16.12.2021 on the use of the Environmental Footprint methods to measure and communicate 
the life cycle environmental performance of products and organisations. 
124 Order-of-magnitude estimation based on expert knowledge within the Commission services. 

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78%  of  259  respondents  agreed  or  strongly  agreed  with  the  idea  of  strengthening  exploration  and 
documentation of critical raw materials in secondary deposits and waste streams. 

This option would introduce the concept of Strategic Projects (Pillar E). This would result in stronger support 
for the CRM value chain in the EU and in third countries and with that a more secure availability of CRM for 
downstream  user  in  the  EU.  By  ensuring  that  these  projects  are  realised,  this  option  would  concretely 
contribute to achieving the targets for EU capacities along the value chain (extraction, refining, recycling). 
Under this option, projects are selected for support on the basis of their potential contribution to the EU targets. 
Assuming that this requires, on average, a capacity increase of 20 percentage points across value chain stages, 
it is estimated that up to 120-180 Strategic Projects (or 12 SPs per strategic raw material, assuming a list of 
12-15 strategic raw material), divided evenly per value chain stages (extraction, refining, recycling), would 
receive support between entry into force of the Regulation and 2030 (or 24-36 per year, see more details in 
Annex  4).  This  would  benefit  the  companies  implementing  the  project,  their  off-takers  and  the  wider 
ecosystem downstream benefiting from more secure supply of critical raw materials. The estimated investment 
needs for battery raw materials of EUR 7 billion by 2030 and EUR 13.2 billion by 2040, and the overall market 
size of batteries in the EU (estimated at EUR 250 billion already by 2025)125 indicate the possible magnitude 
to which Strategic Projects would contribute. Using the estimates above on the size of the InvestEU platform, 
there would still be EUR 6 billion left to bridge the needs for the battery raw materials value chain, for example 
by a European fund consisting of Member States’ contributions. And this would not yet include investments 
in rare earths and other strategic raw materials that are fundamental for other clean technologies necessary for 
the  green  transition  such  as  renewable  energy  equipment.  The  majority  of  the  respondents  in  the  Public 
Consultation  agree  that  identifying  Strategic  Projects  would  be  beneficial  for  financial  and  permitting 
decisions. 86% out of 259 respondents agree or strongly agree that identifying Strategic Projects across the 
critical raw materials value chain with strong environmental and social performance contributes to reducing 
EU dependencies. 71 % out of 259 respondents agree or strongly agree that strategic projects and partnerships 
outside of the EU should also benefit from de-risking if they comply with social and environmental standards 
and can contribute to secure EU supply. 

Regarding permitting (Pillar E.1), this option is expected to have the effects described under option 1, as well 
as  additional  positive  effects  on  companies  developing  Strategic  Projects  by  streamlining  their  permitting 
procedures across  Member  States. 126   A  mandatory  integration  of  procedures  and assessments reduces  the 
administrative  burden  for  developers  compared  to  an  approach  where  the  assessment  and  permitting 
responsibilities are allocated to several separate entities (e.g. reduced environmental assessment costs as a 
single assessment report would be prepared). Cost savings will be particularly significant in Member States 
where such procedures are not yet in place and for certain types of projects, e.g. projects related to industrial 
activities (i.e. also subject to the IED) and projects with significant impacts on biodiversity. Mandatory scoping 
for Strategic Projects is expected to have no net effect on the burden for project developers. Although there 
are extra costs involved for procedures in Member States where scoping is not mandatory, those costs are 
likely to be offset by time savings during the drafting of the EIA report, as the analysis of irrelevant information 
would be avoided. Lastly, the possibility to submit documents digitally and to consult a manual of procedures 
for  Strategic  Projects  would  likely  further  reduce  burden  for  project  developers  and  contribute  to  the 
implementation of the digital by default principle. 

125 Building a European battery industry - European Battery Alliance (eba250.com) 
126  The assessment below is based on the assessment of similar measures in the impact assessment accompanying the 2012 
proposal for revision of the EIA Directive - https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52012SC0355&from=EN#page=38&zoom=100,27,726 

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This approach is also expected to reduce the average length of permitting procedures, as regards new Strategic 
Projects, by one-third (33.33%). This is based on the experience of the TEN-E Regulation127, which includes 
very  similar  provisions  on  permitting,  which  managed  to  decrease  the  average  duration  of  permitting 
procedures  (including  the  pre-application  stage)  for  trans-European  electricity  infrastructure  projects  from 
more than 6 years in some Member States to 4 years.128This measure benefits from a strong level of stakeholder 
support:  73  %  of  259  respondents  agree  or  strongly  agree  Strategic  Projects  benefit  from  streamlined  and 
quicker permitting procedures.  

Increasing the speed and predictability of permitting, notably by considering them as of public interest, is also 
expected to contribute to de-risking this early step and make investments in Strategic Projects more likely. 
Pre-bankable  projects,  before the  obtainment of a  permit,  often  struggle  to  obtain  funding  due to the high 
uncertainty  involved.  The  measures  outlined  in  this  option  would  provide  a  clearer  picture  for  economic 
operators  of  permitting  timelines  and  procedures  for  Strategic  Projects.  In  addition,  setting  the  proposed 
minimum requirements for national permitting procedures for Strategic Projects would increase harmonisation 
between Member States and contribute to improving the functioning and efficiency of the single market, as 
developers and business in general would benefit from a more level playing field and less distorted market 
conditions. 

A  fund  at  European  level  (Pillar  E.2)  with  contributions  from  interested  Member  States  on  top  of  a 
contribution  from  existing EU  funds  would  strongly  support  the  development  of  European  CRM  projects, 
benefitting businesses. The benefit to companies would depend on the size of the fund, which is not clear at 
this stage and depends on Member States’ willingness to contribute. Compared to funds set up individually by 
Member States, for example via their promotional banks, this option would deliver the clear advantage of 
taking the whole European value chain into account.  

As analysed in driver 2.3, the investment required for the refining and recycling of 25% of the EU’s needs for 
battery raw materials plus the extraction of the lithium needed would amount to EUR 7 billion by 2030 and 
EUR  13.2  billion  for  2040.  Full  self-sufficiency  would  require  EUR  27.9  billion  and  EUR  52.2  billion, 
respectively.  Other  CRMs  are  likely  to  require  large  investments  as  well  to  gain  a  certain  level  of  self-
sufficiency along the value chain. Targeting existing EU funds to finance CRM projects as well as increasing 
financial support from national and promotional banks receives strong support from stakeholders129. 

On waste legislation (Pillar F), in addition to the effects described under option 1, this option would introduce 
an increased focus on CRMs within the waste management plans of extractive waste site operators, including 
obliging them to assess the feasibility of CRM recovery from the generated waste. This would create only very 
limited administrative costs, since a pre-feasibility study is a very simple assessment, and the underlying data 
on mineral concentrations is already available from the feasibility studies performed by extractive waste site 
operators for other purposes. The benefits would also accrue to these companies, as they would be the first to 
perform the CRM recovery operations when the pre-feasibility study indicates potential to do so profitably – 

127 Regulation (EU) 2022/869 of the European Parliament and of the Council of 30 May 2022 on guidelines for trans-European 
energy infrastructure, amending Regulations (EC) No 715/2009, (EU) 2019/942 and (EU) 2019/943 and Directives 2009/73/EC and 
(EU) 2019/944, and repealing Regulation (EU) No 347/2013 
128 See Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure - 
Publications Office of the EU (europa.eu), p. 69.  
129 In the public consultation, 73% of respondents agree or strongly agree that “targeting existing EU funds that have the possibility 
to finance critical raw materials projects of particular strategic relevance identified under the future legislation” would facilitate 
access to finance for CRM projects. 71% would like “Increased financial support from national and European promotional banks for 
critical raw materials projects” and 68% are positive about “a dedicated financial platform to de-risk critical raw materials projects 
by blending private, national and EU funding”. In the position papers submitted, several stakeholders suggest financial de-risking to 
take place through guarantees or contracts for difference (Deutsche Bank AG, Ragn-Sells and European Geothermal Energy Council 
in response to the Call for Evidence.), and they express their wish for simpler and more automatic mechanisms to qualify for public 
support (Norsk Hydro ASA in response to the Call for Evidence).  

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insofar the obligation is designed to be complied with at a minimal cost and intended primarily to put a focus 
on this aspect for companies’ own potential benefit.   

The recycling capacity targets to be achieved by the EU are not binding but general objectives guiding the 
selection of Strategic Projects. Insofar, they would not affect companies directly, except to the extent that 
companies  propose  Strategic  Projects  in  the  recycling  stage,  in  which  case  they  could  benefit  from  the 
permitting and financing benefits described above.  

The measures on standards (Pillar G) under this option would, in addition to the impacts of option 1, have a 
positive impact on companies, including SMEs, in that they help ensure a level-playing field in the single 
market for businesses and underpin consumer confidence. Promoting the development of technical standards 
on relevant industrial processes would increase transparency and sustainability of CRMs over time.  

Regarding environmental footprint  (Pillar H): on top of the economic impact described for option 1, the 
introduction of minimum thresholds may induce additional costs for economic operators, as certain processes 
need  to  be  adapted  and  electricity  supply  needs to  be  reconsidered, in  order  to reduce  relevant  footprints. 
Depending on the stringency of the proposed thresholds, manufacturing processes for CRMs farthest from 
best-in-class might need substantial investments. However, those costs would be calculated in a dedicated 
impact  assessment,  as  explained  in  section  5.2,  pillar  H,  given  that  the  threshold  would  be  introduced  by 
secondary legislation. 

The administrative impact is expected to be fairly similar to the one described under option 1. Market access 
would become conditional on the declaration demonstrating that certain thresholds have been attained, but the 
effort for the declaration itself would remain the same. If performance classes are introduced, the third-party 
verification costs may slightly increase, as the number of data points to be verified would be higher in order 
to increase precision. 

Taken together, the actions proposed under this option would lead to a generally larger availability of CRMs 
in the economy as well as increased security of supply. All these effects would benefit downstream users of 
CRMs as well as firms even further down the value chain and even consumers. The larger supply would help 
to bring down world market prices leading to greater competitiveness of the green and digital technologies in 
the scope of this proposal. Especially in times of tight global supply chains, these measures would produce 
tangible benefits by protecting the European economy to a larger degree from shortage of crucial inputs. 

6.2.1.2. 

Impact on SMEs 

On  exploration  (Pillar  D),  as  suggested  by  stakeholders  (e.g.,  European  Federation  of  Geologists130),  this 
approach would bring positive benefits to SMEs by providing additional data that could de-risk their activities: 
though SMEs are the main actors operating in this early stage of the value chain, they have less resources and 
capacities to undertake risk-heavy exploration operations. 

SMEs  would  benefit  from  the  monitoring  (Pillar  C.1)  and  access  to  finance  (Pillar  E.2)  dimensions  as 
explained in PO1 In addition, SMEs would also benefit from the increased funding opportunities offered by 
the fund. In the public consultation, SMEs are adamant about the difficulty to access private financing for 
CRM projects (62% agreeing; 0% disagreeing) and to access public funding (80% agreeing; 3% disagreeing). 
For them the lack of support from public financial institutions (34%) and the higher production cost in the EU 
(31%) are among the main reasons for the difficulties in accessing private finance. The effects on SMEs are 
assessed in more detail in Annex 6. 

130 See their position paper submitted in response to the Call for Evidence. 

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6.2.1.3. 

Impact on competitiveness 

The availability of additional data and mapping of EU mineral resources as provided per Pillar D would also 
support the competitiveness of the value chain; equipped by additional information, companies would benefit 
from a de-risking at the early exploration stages that would then trickle down along the value chain.  

In general, the designation of Strategic Projects (pillar E) with streamlined permitting and improved access 
to  finance,  would  lead  to  increased  production  of  SRMs  in  Europe  and  like-minded  third  countries  and 
therefore  to  greater  supply  security  for  European  downstream  manufacturers.  This  concerns  both  the 
companies directly procuring the SRMs, such as those producing permanent magnets or batteries, as well as 
those further down the value chain, such as producers of wind turbines. This should give those companies a 
competitive advantage over competitors in other world regions with less supply security and allow to catch-
up to regions were this is already the case. Especially, the competitiveness of SMEs in those sectors would 
benefit as they tend to be less likely to be able to weather supply chain disruptions for key inputs on their own. 
More Strategic Projects would also lead to more production of strategic raw materials in general. This higher 
supply would lead ceteris paribus to lower prices for key inputs for downstream producers and boost their cost 
competitiveness vis-à-vis producers using less SRMs as input. 

Regarding environmental footprint (Pillar G), this option would, in addition to option 1, create a framework 
for setting thresholds for the environmental footprint. Such measures would increase the competitiveness of 
relatively sustainable CRMs. On the negative side, for downstream users, in addition to option 1, producers 
(e.g. such using renewable energy in their operations) no longer able to buy certain CRMs, would also reduce 
access  to  CRMs  for  downstream  users  in  cases  where  most  production  is  subject  to  low  performing  and 
potentially cheaper CRMs to which third country companies might still have access All such impacts would 
be taken into account in the assessments for preparing the delegated acts introducing any concrete, and this 
effect could be increased in case the share of such materials that would otherwise be exported to the EU would 
be  diverted  to  third  country  markets,  potentially  decreasing  prices  for  third  country  downstream  users  be 
jeopardised  by  such  thresholds.  However,  as  this  discussion  refers  to  delegated  acts  to  be  developed  and 
properly assessed ex-ante in the future, it is beyond the scope of this IA. 

On the negative side, environmental footprint requirements might prevent downstream users from acquiring 
the cheapest (but environmentally damaging) products containing critical raw materials. This could harm their 
competitiveness  in  the  short  run  vis-à-vis  competitors  from  jurisdictions  where  such  rules  do  not  apply. 
Therefore, it is important that all such impacts would be taken into account in the assessments for preparing 
the delegated acts introducing such thresholds and the impacts would be carefully weighed against each other. 
Taking  that  into  account,  the  competitive  position  of  European  downstream  producers  would  not  weaken 
significantly. 

As  explained  in  problem  section  2.3,  high  energy  prices  threaten  the  competitiveness  of  energy-intensive 
activities in Europe, including extraction, refining and recycling of critical raw materials. While the CRM Act 
itself  will  not  be  able  to  address  this  challenge,  the Commission  is  working  on  other  files  to  improve  the 
situation, for example by updating the EU’s Temporary Crisis (and Transition) Framework e.g. to offset the 
higher energy cost compared to its international competitors.  

While the high energy prices over the course of 2022 present a case of market failure, there is a risk that the 
energy  prices  in  the  EU  continue  to  be  higher  than  in  other  regions  of  the  world  which  impacts  the 
competitiveness of the energy intensive CRM value chain. While the CRM Act aims to make the production 
of energy in the EU in general cheaper in the future, it does not provide for measures to tackle these challenges 
in the short term. Here, other EU initiatives like the revision of the Temporary Crisis Framework (soon to be 
Temporary Crisis and Transition Framework) or the Carbon Border Adjustment Mechanism should provide 
or allow for the provision of support to those projects. For the unlikely case of, for example, significantly 
higher energy prices threatening competitiveness in Europe even in the long run, this structure would create 

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the risk that some projects might be supported operationally in the long term, despite all safeguards. In that 
case, however, not only the CRM value chain but also the entire European energy-intensive industry might be 
in danger of disappearing.  

6.2.1.4. 

Impact on competition 

The special status granted to Strategic Projects (Pillar E) with respect to permitting and, to a limited extent, 
funding  included  in this  option  means that  benefits would  be  awarded  selectively.  However,  a  transparent 
process based on clear criteria and the involvement of the Commission along Member States in the projects’ 
selection  would  ensure  that  the  beneficiaries  are  those  where  the  benefits  to  the  entire  Single  Market  are 
greatest.  

The pooling of Member State contributions with existing EU resources into one European fund (Pillar E.2) 
ensures a stronger focus on benefits to the entire Single Market dimension than if some of them would simply 
set up such a fund on their own; however, Member States with a greater financial capacity would likely be 
able to fund a greater number of projects of their choice. Here, the relative magnitude of the EU contribution 
determines  how  much  the European  dimension  can  be  taken  into account.  State  Aid rules  would  continue 
apply and thus minimise the risk of such distortions.  

6.2.1.5. 

Impact on international trade 

The positive benefits of targets (Pillar B) for the EU supply diversification are the same ones as for option 1 
as the mechanism for setting the targets and reviewing MS performance only applies to the targets for EU 
supply capacity. The impact of EU supply capacity targets (Pillar B) and of the development of the EU value 
chain on international trade and on third countries would be limited; while the EU would increase the relative 
share of its own production in its consumption, the rise in demand for CRM would still allow all international 
actors to export them. 

Overall, policy and regulatory measures aiming to increase sustainable primary and secondary production will 
both benefit the EU market and the global availability of CRMs, hence mitigating supply risks. 

On environmental footprint (pillar H), the information-gathering obligations are likely to lead firms in third 
countries to replicate these calculations at minimal additional cost for CRMs sold elsewhere, such that the 
European  information  requirements  could  have  global  impacts  and  set  an  industry  standard.  While  this 
transparency  is  not  likely  to  change  the  market  and  international  trade  in  CRMs  immediately,  it  should 
incentivise private companies to ensure more environmentally sustainable raw material supply. This, with the 
set  of  other  measures,  should  lead  to  a  gradual  demand-driven  shift  towards  more  sustainable  forms  of 
production – e.g. using renewable energy for on-site operations, instituting closed-loop water recycling, or 
committing to rehabilitation post-closure – to set own production apart from competitors. This shift to more 
sustainable forms of production, to the extent it occurs, would take place not only in the EU but also in third 
countries catering to the EU market. This would benefit local populations and the environment in those third 
countries.   

Once sufficient data will be collected and while ensuring that security of supply would not be jeopardised, 
thresholds could be set based on an ex-ante proper impact assessment.  Placing CRMs on the EU market would 
be possible for the best performing materials where thresholds are set. In comparison with policy option 1, 
this  would  have  commensurately  greater  positive  and  negative  (depending  on  a  country’s  relative 
performance) impacts on third countries. Since a dedicated assessment will be made at material-specific level 
before introducing a possible threshold, unintended consequences (notably on availability/security of supply 
of CRMs) should be prevented.  Any such measure would also be compatible with applicable trade rules and 
international  agreements,  such  as  the  WTO  and  the  GATT  rules.  Indeed,  requirements  would  apply  in  a 
proportionate manner both to European producers and to importers and would therefore not be discriminatory 

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as they would target products wherever they may come from, whether produced in the EU or in third countries. 
The  precise  impacts  on  third  countries,  or  precisely  on  the  economic  operators  active  in  them,  would  be 
heterogeneous and depend on their capabilities for production along the CRM value chain, their commitment 
to high but at least improving ESG standards, and their current position in the market. Especially trade relations 
with countries with high environmental standards and underused potential for CRM production would benefit 
whereas currently large suppliers are likely to lose relative market share. Given the dramatic increase in the 
demand projections for several CRMs, this would likely not lead to a decrease in trade volumes in absolute 
terms.  

It should also be noted in this context that potentially decreasing demand for relatively unsustainable CRMs 
(enabled by the greater transparency on environmental footprint) need not affect any third country negatively, 
as not the country of origin of the CRMs but their environmental footprint are targeted. Third countries with 
overall  low  environmental  performance  today  could  invest  into  improving  this  performance  and  thereby 
benefit from the measure.  

6.2.1.6. 

Impact on Member States (public authorities) 

In total, PO2 would require at least 4 FTEs per Member State, that would be split by (see for more detail 
Annex 11): 

- 
1/4 FTE per year for reporting on the state of CRM projects on their territories; 
- 
2 FTEs per year for participation to the governance structure; 
- 
1/4 FTE per year for the coordination of strategic stocks; 
- 
1/4 FTE to contribute to the development of EU-targets and report on them.  
-  Additional FTEs (not quantified) to enforce environmental footprint obligations. 
- 

1 FTE per year to develop and implement national circularity strategies. 

Additional 25 FTEs are required for the development of exploration programmes, which would be a one-off 
cost131. In addition, costs can be expected to finance obligations on exploration, as the option would for all 
Member States combined a one-off cost of EUR 82 million for aerial geophysical survey and EUR 80 million 
for geochemistry mapping survey to cover the EU. The costs of provisions on permitting for Strategic Projects 
are assessed to be minimum and avoid duplications in the procedures. 

Similarly, 3-4 FTEs per Member State would be required to implement new obligations under the Extractive 
Waste Directive (one-off costs). 

However, in addition to coordination and information exchange with regards to monitoring, or the coordination 
of stockpiles, this option would also provide Member States with a strategic and coherent framework to support 
the CRM value chain, with positive effects on their supply chain’s solidity and their industry’s resilience.  

Further details of PO2’s impacts on Member States are available in Annex 11.  

6.2.1.7. 

Impact on the Commission (budgetary implications) 

In total, PO2 would require around 31 FTEs for the Commission, that would be split by (see for more detail 
Annex 11): 

  2 FTEs for ensuring the secretariat of the governance structure, in addition to EUR 75.000 per year of 

organisational costs. 

131 It is to be noted that the FTE costs for exploration programmes and exploration costs described above are dependent upon a 
Member State’s size, its geological endowment and existing administrative and research capacities. 

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  17 FTEs for implementing monitoring, data gathering and risks assessment tasks, based on similar 

tasks performed by existing units in the Commission), which can be split as: 

o  10 FTEs for market monitoring; 
o  1 FTE for the management of studies and contracts; 
o  1 FTE for the building of a data set on projects 
o  5 FTEs for the coordination of information from Member States 

  3 FTEs for the coordination of national stockpiles information and the development of guidance when 

possible; 

  2 FTEs to coordinate the submission of national exploration activities; 
  1 FTE to support the board in the selection of Strategic Projects; 
  3 FTEs for assessing the suitability of environmental footprint, developing calculation methods and 

monitor the application of the measures; 

  2 FTEs to enforce actions on standardisation and prepare standardisation requests. 
  1 FTE to ensure the enforcement of Member States obligation under the Extractive Waste Directive. 

The additional costs of policy option 2 for the Commission are detailed in Annex 11. 

6.2.2. Social Impacts 

Strategic Projects (Pillar E) would create economic value and jobs locally. It is not feasible at this stage to 
assess the number of jobs created and their repartition but the generally lower economic development in former 
mining  regions  (discussed  in  option  1),  which  could  be  revitalised  especially  through  re-mining  projects 
suggests that such projects could contribute to generating new opportunities and increasing cohesion. These 
investments would create jobs in areas with high unemployment rates and bring needed resources that then 
will spur further economic activity locally whilst harnessing and upgrading the existing skills of the labour 
force in the area. Low estimate point at 3 840 potential direct job per year for the development of the Strategic 
Projects, and eventually to above 100 000 direct and indirect jobs if over 100 Strategic Projects are selected 
to meet EU targets during the implementation of the Regulation. (c.f. Annex 4).For partner countries, this 
would include capacity building going beyond the extraction phase where feasible. 

On  waste  legislation  (Pillar  F),  this  option  would  likely  lead  to  greater  societal  awareness  by  engaging 
Member  State  governments  to  develop  strategies  to  recover  critical  raw  materials  from  all  waste  streams 
economy-wide.  

6.2.3. Environmental Impacts 

The  Climate law requires  that  an  assessment  is  concluded to  determine  the initiative’s  coherence  with  the 
climate neutrality objective by 2050. It is to be noted that the main underlying motivation for securing CRM 
supply under the CRM Act is the fact that the world’s reliance on fossil fuels heavily contributes to climate 
change  and  that  the  shift  to  replace  these  drivers  with  more  sustainable  sources  of  energy  production  is 
therefore of great importance. Critical raw materials are crucial inputs for the strategic technologies needed to 
make  the  green transition happen,  such as  wind  turbines, solar  panels  and  batteries.  By  securing  a  greater 
supply security for Europe and more availability in general, this option is consistent with the climate-neutrality 
objective  of  the  Climate  law  as  it  would  contribute  to  a  better  investment  climate  for  the  European  clean 
technology sector and therefore to the higher availability and deployment of renewables. This would help in 
the fight against climate change and would contribute to substantial environmental benefits. This issue also 
has  a  global  dimension:  increasing  global  supply  of  critical  raw  materials  would  make  renewables  more 
competitive on world markets and contribute also outside of Europe to the fight against climate change. 

On exploration (Pillar D), the impact of this policy option on the environment are minimal as the measures 
proposed  do  not  include  the  drilling  phase  of  exploration  but  rather  relate  to  studies,  coordination  of 
information and targeted assessment. 

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Regarding permitting (Pillar E.1), the measures considered focus on improving procedures, and are without 
prejudice to the substantial conditions set out in relevant national and EU legislation (the considerations linked 
to public interest are dealt with below in the context of the “Do no significant harm” principle).  In addition, 
some measures in particular are expected to have a positive impact on the environment (in addition to the 
impacts of option 1)132:  

  A  mandatory  scoping  procedure  would  help  clarify  the  environmental  issues  to  be  covered  in  the 
assessment report, e.g. the most important impacts, preferred methodologies, and relevant information 
sources, thereby likely increasing the quality of the resulting report and help provide robust evidence 
for the final decision in Member States where it is not yet mandatory. 

  The creation of a one-stop shop and streamlining of different assessments is likely to have a positive 
impact on the environment, as it enables a more comprehensive information base for decision-making. 

On waste legislation (Pillar F), this option would go substantially further than option 1 in amending waste 
legislation and requiring Member States to develop strategies to increase recovery of critical raw materials. In 
the  absence  of  an  elaborate  economic  model,  it  cannot  be  assessed  how  impactful  these  changes  will  be 
quantitatively,  but  the  focus  many  stakeholders,  including  NGOs,133  put  on  creating  an  open  database  of 
extractive  waste  sites  and  establishing  recycling  targets  for  critical  raw  materials,  indicates  that  these  are 
generally considered effective measures that could make a difference. As explained in the problem section 
under driver 2.6, increased recovery of critical raw materials, and thus reduced demand for primary critical 
raw materials production, can significantly reduce environmental impacts. Since the new mine operator would 
be responsible for closure and after-closure management of the new operation, re-mining of abandoned waste 
sites would provide a solution to ensure their rehabilitation, which has significant benefits for biodiversity.134 

On environmental footprint (Pillar G), this option would have, compared to option 1, additional positive 
impacts, as companies (especially relatively unsustainable companies) would be confronted with the risk of 
their CRMs not being allowed in the Union market if thresholds are not attained, and would therefore reduce 
production, thus lowering environmental impacts. 

Regarding standards (Pillar H), this option would, in addition to option 1, also provide European standards 
and standardisation deliverables on relevant industrial process. These would be available to EU companies 
and further help them implement sustainable practices and increase transparency.  

Overall,  since  no  environmental  legislation  is  weakened  and  the  streamlining  of  permitting  procedures  is 
targeted towards reducing administrative delays and increasing the resources dedicated to ensuring a proper 
assessment  of  projects  along  the  CRM  value  chain,  no  significant  harm  (DNSH)  to  the  environment  is 
expected under this option. Indeed, Strategic Projects would have to comply with all relevant nature protection 
legislation,  including  environmental  assessment  requirements,  although  different  assessment  would  be 
required to be bundled.  

The  signalling  that  Strategic  Projects  may  be  of overriding  public  interest  does not  go  beyond the  current 
environmental legislative framework; it does not bypass the necessity for a case-by-case assessment or for 
meeting the conditions set out in the relevant Directives. 

As  the  technical  guidelines  on  DNSH  provide,  conducting  an  environmental  impact  assessment  does  not 
automatically entail that no significant harm is done, but it constitutes a “strong indication for the absence of 
significant harm for a number of the relevant environmental objectives”. In addition, as the measures presented 

132 The assessment below is based on the assessment of similar measures in the impact assessment accompanying the 2012 
proposal for revision of the EIA Directive – see footnote 93. 
133 See joint position paper submitted by Friends of the Earth Europe, European Environmental Bureau, Power Shift and the Centre 
for Research on Multinational Corporations (SOMO) in response to the call for evidence. 
134 https://www.cbd.int/development/doc/Minining-and-Biodiversity.pdf  

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aim to secure the CRM needed notably to ensure greater electrification (due to their presence in energy storage 
or  renewable  energy  technologies),  they  also  contribute  to  the  environmental  objective  of  climate  change 
mitigation as part of the DNSH evaluation. Also, while extraction activities can affect the habitat or water 
conditions  surrounding  the  operations,  measures  pertaining  to  the  environmental  footprint  of  CRM  would 
incentivise  the  adoption  of  the  best  available  levels  of  environmental  performance  in  the  sector,  hence 
contributing  to  mitigate  potential  environmental  harm.  In  addition,  the  development  of  Strategic  Projects 
inside the EU would ensure a lesser reliance on supply from third countries, hereby ensuring that the additional 
capacities are developed in compliance with EU environmental acquis, and reducing environmental impacts 
in third countries. Lastly, environmental impacts would also be reduced due to measures promoting greater 
use of secondary raw materials, greater transparency on the environmental footprint of critical raw materials 
and more ambitious sustainability standards. 

6.3.  POLICY OPTION 3 

6.3.1. Economic Impacts  

6.3.1.1. 

Impact on companies 

On the list of critical and strategic raw materials (pillar A) and setting strategic raw materials targets 
(pillar B), this option has the same impact as option 2. 

On  the  governance  aspects  (pillar  C),  industrial  actors  or  business  associations  favour  the  creation  of  a 
dedicated agency, such as the operational capacity (Euromines, EIT Raw Materials135), as they argue it would 
help in the development of CRM projects and provide relevant expertise to the EU institutions and industry.  

Indeed,  this  operational  capacity  would  enable  the  development  of  stronger  monitoring  and  risk 
management  capacities  (pillar  C.1),  notably  by  developing  tools  such  as  early  warnings  of  imminent 
vulnerability of a supply chain, which 63 % of 259 respondents supported, or periodic supply chain stress 
testing of selected CRMs (52 % of respondents agreed that it would allow to better anticipate supply chain 
disruptions, with only 7% disagreeing). The costs here are the same as for options 1 and 2 as they only concern 
large companies. 

On strategic stocks (pillar C.2), the operational would enable companies to buy strategic stocks at better prices 
(due to joint purchase), resulting in cost savings. Since it is not a purchasing obligation but an incentive based 
on  companies  expressed  needs,  no  costs  on  companies  are  quantified  for  this  option.  Stakeholders  are 
supportive of avoiding centralized storage and favour a decentralized approach136 that does not add burden for 
companies:  mandatory  stocks  are  the  least  favoured  option  among  stakeholders  when  asked  about  the 
organisation of strategic stocks (14 %). Given the high financial burden induced by stocks, companies would 
welcome stronger EU support. 

On company risk preparedness (pillar C.3), the operational capacity would provide for direct support to 
enable risk mitigation strategies. Large companies comprising a strategic raw material in their value chain 
would have to bear additional costs given the obligations to adopt at least one mitigation strategy (explained 
in annex 4). Given that this measure is not prescriptive on the exact nature of the strategy to adopt, it is not 
possible to assess its costs directly. Stakeholders were generally opposed to the addition of new requirements 
on companies, such as mandatory stockpiling, if those were not met with corresponding incentives. Some large 

135 See respective position papers submitted in response to the call for evidence. 
136 This point was notably made in the position papers submitted by the German automotive (VDA) and defence (BDSV) industry 
associations submitted in response to the call for evidence. 

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companies are also already adopting these mitigation strategies depending on which ones they consider as the 
most efficient137. 

On exploration (pillar D), the positive benefits of this option are the same as for option 2. 

The impact related to the selection of Strategic Projects (pillar E) is the same for companies. 

Regarding permitting (pillar E.1), this option has the same impact as under option 2. This approach would 
also provide additional certainty to developers and related investors that Strategic Projects’ applications will 
be effectively handled by national authorities. 

Regarding access to finance (pillar E.2), a CRM Fund set up with additional European money (see section 
5.2) would enable to bring enough resources to link the Fund closely to the concept of Strategic Projects. This 
would increase incentives to apply for the Fund and for Member States to make efforts that projects on their 
territory are included. The European involvement should also ensure that not only the selection of Strategic 
Projects is performed by a governance structure ensuring that the common European interest is pursued, but 
also that these Strategic Projects are supported financially in a manner proportionate to their importance to the 
whole of the EU. This way it can be best ensured that the cross-border value chains and the needs of the entire 
European economy are adequately affected, rather than the risk of some Member States trying to mostly pursue 
their own interests. This fund is also very likely to be larger than the fund explained in option 2, so a higher 
degree of supply stability is possible. This fund would also be better suited to distribute funding via grants to 
support the CRM value chain even more effectively, in line with State Aid rules, where a particular strategic 
European interest exists.  

68 % of 259 respondents agree or strongly agree that a dedicated financial platform to de-risk critical raw 
materials  projects  that  meet  certain  requirements  (e.g.,  high  environmental  and  social  standards,  while 
contributing to EU supply) by blending private, national and EU funding would be useful. 

On waste legislation (pillar F) and environmental footprint (pillar H) and this option has the same impact 
as option 2. 

For standards (pillar G), this option would have the same impact as option 1 and 2 combined.  

The actions proposed under this option would ensure an even larger availability of CRMs generating even 
larger  benefits  for  downstream  users  and  the  wider  economy.  Key  green  and  digital  technologies  would 
become more competitive and the resilience in crises of global supply chain tensions increased. 

6.3.1.2. 

Impact on SMEs 

SMEs would particularly benefit from the measures developed on monitoring, risk management, strategic 
stocks and the company risk preparedness (pillar C.1, C.2 and C.3). Indeed, conversely to larger companies, 
SMEs that are active in a sector where strategic raw materials are required are less likely to already have in 
place contingency measures. They would benefit from the early warning mechanisms or the stress tests, as 
well as from the ability to jointly purchase stocks of strategic raw materials and from the consulting on their 
risk preparedness proposed by the operational capacity. This would directly strengthen their resilience ahead 
of any supply shock, thereby avoiding them to suffer the mitigation costs of a crisis. In the public consultation, 
a slight majority agreed that companies generally don’t have contingency plans to deal with supply disruptions 
(37% agreement vs. 22% disagreement) 

137 KÖSTER, H., NEUBERT, F. P., DIERKSMEIER, K., ADELMANN, L., LENTGE, H., SCHMIDT, P. (2022): Securing raw material supply: 
Benchmarking of measures of foreign manufacturing companies and recommendations for action. 

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6.3.1.3. 

Impact on competitiveness 

The more ambitious measures in pillar E with a European CRM Fund including new funding would contribute 
even more than option 2 to increasing the cost- and international competitiveness of European downstream 
producers as well as the international competitiveness and capacity to innovate for firms along the CRM value 
chain. These benefits would apply especially to SMEs due to their generally more difficult access to finance 
as well as vulnerability to supply disruptions. The considerations regarding energy prices discussed in option 
2 apply here as well. 

On exploration and environmental footprint (pillars D and H), this option would have the same impact as 
option 2. However, this option would further foster the competitiveness of EU industries by providing them 
with  strong  monitoring  resources  (pillar  C.1)  while  supporting  their  eventual  purchase  of  strategic  raw 
materials stockpiles (pillar C.2) and their risk mitigation strategies (pillar C.3), making them more resistant to 
supply shocks and shortages. 

6.3.1.4. 

Impact on competition 

The same impacts as discussed under option 2 would apply, but a CRM Fund (pillar E.2) with a stronger EU 
role (backed by its financial contribution) would better ensure a level playing field in the Union. 

6.3.1.5. 

Impact on international trade 

Qualitatively,  the  same  impacts  as  discussed  under  PO2  would  apply,  though  to  a  stronger  degree  due  to 
increased funding and support for Strategic Projects that improve EU supply security. 

6.3.1.6. 

Impact on Member States (public authorities) 

Under this option, the direct cost induced on Member States would remain the same as for option 2 (32 to 33 
FTEs, plus cost induced by exploration programmes). Indirect costs would however be higher as they would 
directly relate to the contribution of Member States to the EU budget so as to allow the financing of an EU 
operational capacity on CRMs. Assuming that the resource obligation for national authorities would translate 
into the allocation of 0.5 FTE per Strategic Projects, this option would entail a recurrent cost of 12-18 FTEs 
in total for all Member States (assuming a number of 24-36 SPs per year, see Annex 4). However, this cost 
would differ between Member States depending on the amount of SPs taking place on their territory and their 
current staffing. 

6.3.1.7. 

Impact on the Commission (budgetary implications) 

The impacts on the Commission of this operational capacity ensuring the governance and the implementation 
of tasks (pillars C, C.1, C.2, C.3, with also a role in D and E) are more significant than for the other 2 options 
as it would require the creation of a full-fledged external operational capacity with significant staff.  For the 
first year of establishment, the staffing implication would be limited to a seconded Head of Unit and 20 FTEs 
(or  equivalents).  In  this  phase,  the  operational  capacity  would  draw  on  the  expertise  available  in  the 
Commission  services.  At  operating  speed, the  operational capacity,  whether an agency  or  a  department  in 
another  agency,  would  have  around  100  FTEs,  shared  amongst  4  units  of  25  FTEs:  Member  States 
coordination,  Intelligence  and  monitoring,  Risk  assessment  and  preventive  measures,  and  Stockpiling 
coordination, with posts transferred from the relevant DGs or post creation; and with the possibility to hire 
seconded national experts with relevant expertise in risk assessment, project management and stockpiling. All 
the staff costs related to sub-pillars C.1, C.2 and C.3 are accounted for in this assessment. 

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In addition, the budgetary costs related to the capacity’s administration (recruitment of new staff, rental of 
premises - unless the host country or existing agency would provide for it -, furniture and IT costs) would 
represent EUR 25 to 27 million138. 

In addition to the creation of this operational capacity, this option would require 4 FTEs (1 FTEs for ensuring 
the implementation under the extractive waste directive; 3 FTEs for assessing the suitability of environmental 
footprint, developing calculation methods and monitor the application of the measures; and 2 FTEs to enforce 
actions on standardisation and prepare requests). 

As under option 2, the management of the CRM Fund (pillar E.2) would need to be paid by keeping a share 
of the funds under management. The funds to be invested would need to come from the existing Commission 
budget or additional funding sources. The EU contribution in this option would require new EU resources. In 
the description of driver 2.3 in the problem section, the needs for public support to the permanent magnet 
value chain and to the refining, recycling and (partially) mining of battery raw materials are estimated to be at 
EUR 2.7 billion by 2030 and EUR 4.7 billion by 2040.The actual needs are likely to be much higher, given 
the many other important CRM use cases. 

6.3.2. Social Impacts 

Through stronger support for Strategic Projects, this option would also create greater economic and social 
opportunity in the regions in which they are located. Since overriding public interest does not change rules on 
community involvement, this option should not lead to greater adverse impacts.  

6.3.3. Environmental Impacts 

This  option  would  be  contributing  even  more  to  the  overall  goals  codified  in  the  European  Climate  Law, 
compared to option 2 (c.f. section 6.2.3 for additional details). 

Regarding permitting (pillar E.1), this option has the same impact as under option 2.However, the increased 
roll out of Strategic Projects to boost the production of CRMs, including CRMs essential for technologies 
enabling the energy transition, will facilitate the transition to climate neutral economy, and thereby further 
contribute to the development of the climate law’s objectives.. Moreover, it is likely to be the case that if a 
project cannot be implemented in the EU, a similar amount of CRMs will need to be produced elsewhere 
including potentially in jurisdiction with no or lower environmental standards. 

Regarding environmental footprint (pillar G), this option has the same impact as option 2. For standards 
(pillar H), this option would have the same impact as option 1 and 2 combined. Overall, no significant harm 
to  the  environment  is  expected  under  this  option.  Indeed,  substantial  requirements  of  permitting  and 
corresponding  legislation  are  not  changed,  so  the  analysis  of  option  2  remains  valid;  however,  additional 
resources provided by Member States in the permitting process for Strategic Projects are likely to ensure a 
higher degree of scrutiny regarding the respect of environmental legislation.  

7.  HOW DO THE OPTIONS COMPARE? 

Effectiveness:  PO3  is  likely  to  be  most  effective  in  meeting  the  objective  of  increasing  EU  industry’s 
awareness  and  mitigation  of  CRM-related  risks  (SO1)  given  the  added  value  of  an  external  operational 
capacity, its additional resources and increased range of tasks, notably on monitoring, strategic stocks, risks 
preparedness and fund management. The governance structure proposed in PO1 and PO2 would however also 

138 The costs are adapted to 2022 prices and use as a baseline the EUR 22 to 24 million estimated in the European Labour 
Authority’s impact assessment from 2018 for the creation of an agency of a similar size  -  (SWD(2018)68) 

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support  the  objective  by  providing  enhanced  stockpiling  coordination,  additional  monitoring  and  further 
incentives for companies’ risk mitigation strategies. 

PO2 and PO3 are likely to be most effective in meeting the objective of supporting the EU CRM value chain 
(SO2). To increase exploration efforts in the EU, PO2 and PO3 present a more effective mechanism to foster 
national exploration and mapping, compared to PO1, which rather focuses on coordination and data exchange. 
To streamline permitting procedures and improve access to finance, PO2 and PO3 introduce the concept of 
Strategic  Projects,  which would entail  privileged  treatment  in  permitting  and  support in  access to finance, 
while PO1 only contains general and likely less effective measures. With respect to increasing investment, 
PO3 is expected to be the most effective, as it would provide additional financial resources, but PO2 already 
provides a framework for SP selection and streamlined permitting, which is the necessary first step and likely 
the  maximum  achievable  given  the  set  level  of  resources  available.  Of  course,  the  final  outcome  and 
effectiveness of the measures on finance will depend predominantly on the amount of funding made available, 
but  this  cannot  be  assessed  at  this  point  in  time.  In  supporting  circularity,  the  Recommendation  and 
announcements of future actions under PO1 are less effective than the regulatory measures proposed in PO2 
and PO3. All options also provide for effective tools to meet the need for standards for CRM-related industrial 
processes, although PO2 and PO3 enable stronger standards-development and better ensure their availability 
and suitability for EU companies compared to PO1. 

On  SO3,  all  options  make  the  environmental  footprint  of  CRMs  transparent  for  buyers  and  help  shift  the 
market towards more sustainable CRMs. However, information requirements alone are not expected as such 
to lead to the behavioural change needed to reduce footprints in line with Union objectives, which is better 
achieved by PO2 and PO3 as these allow for the setting of thresholds to address the most polluting CRMs. 

It is to be noted that all options also convey a time dimension. On standards, PO2 and PO3 are likely to take 
longer to fulfil the actions added on top of PO; on environmental footprint, measures allowing for the display 
of information of the CRM’s environmental footprint will require the development of a dedicated methodology 
and the establishment of performance classes, which will require resources over time.  

Efficiency: PO3 is more costly than PO1 and PO2 to meet the objective SO1 as they do not require the creation 
and financing of an external capacity but only the reinforcement of internal capacity and the creation of a 
dedicated board overseeing a network.  

Regarding SO2, on exploration, PO2 and PO3 provide for a comprehensive approach that is however most 
costly  than  PO1.  Regarding  permitting,  the  PO2  is  deemed  more  efficient  than  PO1  as,  despite  requiring 
limited additional resources from Member States, it has much greater benefits for project developers in terms 
of investment certainty. PO3 could be more effective, but would increase the pressure on national resources, 
thus reducing its efficiency. For circularity, PO2 and PO3 introduce light obligations on Member States and 
companies, which promise a significant additional benefit in terms of potential CRM recovery, which makes 
them very efficient actions. On standards, PO2 and PO3 would require more efforts from the Commission and 
relevant  standardisation  bodies  than  PO1,  but  with  a  higher  likelihood  of  enabling  the  development  of 
standards supporting  the industry’s  competitiveness  and  the development of  sustainable techniques,  which 
makes them very efficient. 

Regarding environmental footprint (SO3), PO2 and PO3 are considered more efficient as they allow for the 
setting of thresholds to address the most polluting CRMs, in as long as they do not negatively impact security 
of supply, i.e. do not create substantial cost. Here, not only domestic costs but also impact on trade are taken 
into account. 

Proportionality/subsidiarity:  Regarding  targets,  PO2  and  PO3  go  beyond  PO1  in  instituting  additional 
review of the targets process, which makes them more demanding but still proportionate. When it comes to 
objective SO1, PO1 and PO2 provide necessary margin of manoeuvre to Member States and companies and 
focus on coordination and incentives, while PO3 imposes stronger requirements on companies.  

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Regarding  objective  SO2,  requirements  on  exploration  and  on  permitting  in  PO2  and  PO3  remain 
proportionate to meet the objective, but impose further obligations on Member States. PO3, however, would 
to  some  extent  limit  Member  States’  discretion  regarding  permit-granting  and  the  application  of  nature 
protection legislation, as well as their staffing decisions. For investment, all options are proportional as they 
are  dependent  upon  the  prior  mobilisation  of  resources  tailored  to  the  needs  of  the  value  chain  stages. 
Regarding  circularity,  PO1  only  provides  voluntary  guidance  to  Member  Statas  whereas  PO2  and  PO3  in 
addition impose requirements to develop strategies and provide information on Member States and companies, 
but leaving them broad room in terms of follow-up and implementation. 

On measures pertaining to environmental footprint (SO3) and standards on CRM industrial processes (part of 
SO2), all options are considered to be proportionate and respect subsidiarity principles, given that requirements 
and standards are adapted to the entire single market.  

Coherence assessment:  

In terms of overall coherence, the  options are in line with the different European strategies and regulatory 
framework. They are all seeking to reinforce the Union’s ability to meet EU Green Deal objectives and enable 
the  deployment  of  clean  energy  as  prescribed  by  the  climate  law,  while  respecting  the  “Do  no  significant 
harm” principle; the only difference across options here relates to their degree of ability to achieve the main 
objective. PO2 and PO3 also include amending EU waste legislation to ensure its coherence with the need to 
reinforce the EU’s secondary supply of CRMs. In addition, the gaps analysis of this assessment demonstrates 
that on matters such as the sustainability of CRM, there is no EU instrument aiming at achieving this objective 
in a similar way with a similar scope (for CRMs placed on EU market), although complementarity with the 
batteries regulation or the ESPR have been considered. Matters related to monitoring or strategic stocks are 
designed  so  as  to  complement  rather  than  overlap  with  any  dispositions  of  the  Single  Market  Emergency 
Instrument. In addition, this initiative is complementary to other initiatives announced under the Green Deal 
Industrial Plan139, such as the Net Zero Industry Act, which will aim to develop the industrial manufacturing 
of  key  technologies  for  the  green  transition.  Overall,  the  options  are  built  in  such  a  way  so  as  to  ensure 
conformity with international obligations and to contribute to the UN SDGs. 

In terms of internal coherence, the options are built in such a way that actions undertaken to meet one specific 
objective should not come at the expense of another specific objective. As discussed in chapter 4, security of 
supply  and  sustainability  may  have  opposing  effects  if  one  is  pushed  to  the  extreme.  This  is  why  the 
elaborations on pillar H (environmental footprint measures) describe (notably in section 5.2) how, prior to the 
introduction of any threshold limiting market access for less clean producer, a dedicated assessment will have 
to be conducted to ensure the absence of risks to EU supply security, hence ensuring that coherence is taken 
into account. However, the information requirements contained on option 1 for pillar H ensure a slightly higher 
coherence  than  options  2  and  3,  meaning  that  a  trade-off  has  to  be  made  around  this  pillar  regarding  the 
different specific objectives.  

Effectiveness in meeting 
objectives 

Efficiency 

Proportionality/ 

Coherence  

subsidiarity 

SO1 

SO2 

SO3 

++ 

+ 

+ 

++ 

++ 

++ 

Option 
1 

Option 
2 

+ 

++ 

++ 

+ 

++ 

+ 

139 COM(2023) 62 final, A Green Deal Industrial Plan for the Net-Zero Age 

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Option 
3 

+++ 

+++ 

++ 

+ 

- 

+ 

Legend: +- no / neutral impact; + minor positive impact; ++ positive impact; +++ significant positive impact; 
- minor negative impact; -- negative impact; --- significant negative impact 

In order to reflect the different components of the specific objective 2, the effectiveness  of each option has 
been assessed for each of the pillars that compose it: 

Specific Objective 2: effectiveness of meeting the objectives for the different components 

Exploration 

Permitting 

Access 
finance 

to 

Circularity 

Standards 

Option 1 

+ 

Option 2 

++ 

Option 3 

++ 

+ 

++ 

+++ 

+ 

++ 

+++ 

+ 

+++ 

+++ 

+ 

++ 

++ 

For companies, all options would result in positive impacts as they all allow for stronger support to the value 
chain than the baseline scenario, which would not only benefit companies operating directly in the CRM value 
chain but also downstream companies and the wider economy. The impacts of the options would have positive 
spill-overs  on  the  security  of  supply  of  both  primary  and  secondary  critical  raw  materials,  particularly  of 
strategic raw materials, which would secure the deployment of green technologies or technologies needed in 
health, defence or digital industries. Though it allows for stronger support to the CRM value chain, PO2 and 
PO3 also require additional contributions from companies (information request and stress tests to conduct on 
large companies for PO2 and PO3, additional requirements on environmental footprint for PO2 and PO3) The 
public  consultation  shows  that  companies  would  support  stronger  actions  developed  in  PO2  and  PO3, 
however, given the additional benefits that such actions would allow. Member States have expressed stronger 
support for the set of measures developed under PO2, whether it is in terms of governance, monitoring or 
coordination of stockpiling, but also on strategic projects and circularity. They would however face additional 
costs in PO2 and PO3, since it provides for more stringent obligations and additional resources to implement 
the proposed measures. Civil society would benefit rather from PO2 and PO3 that best ensure the availability 
of the critical and secondary raw materials that are necessary to deploy green technologies, while ensuring a 
higher level of transparency on the sustainability of CRMs. They would also enjoy the benefits from the greater 
availability security of jobs both along the CRM value chain and downstream sectors. 

8.  PREFERRED OPTION 

Following the analysis of the impacts of each policy option, as well as their ability to meet the general and 
specific objectives in the most effective and efficient manner while respecting proportionality, coherence and 
subsidiarity, this impact assessment considers that PO2 would be the preferred option.  

First, PO2 is the option whose measures receive most support from stakeholders and Member States, as it adds 
only limited additional burden while also being proportionate.  

Second, while it would require some resources and efforts from different stakeholders, the overall costs and 
impacts of PO2 are significantly smaller compared to PO3, while still being sufficiently efficient in tackling 
the problem drivers (which are not as effectively addressed in PO1).  

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Third, and most importantly, PO2 manages to effectively meet the general and specific objectives, also for the 
different  components  of  SO2.  It  brings  clear  added value  to  the functioning  of  the  Single  Market and  has 
positive economic impacts for CRM producers and downstream sectors by ensuring industrial resilience and 
enabling the development of EU CRM value chain. Its social impacts on jobs and cohesion of EU regions are 
also positive. Its positive environmental impacts are enabled by the measures on circularity, environmental 
footprint of CRMs, and the support to technical standardisation. It has to be noted that PO3 is assessed as more 
effective to meet the objectives given the additional resources and support that an operational capacity would 
entail, notably on permitting and on access to finance, as demonstrated by table above. However, the current 
budgetary context does not allow for the creation of such an entity at the time, despite support for a more 
ambitious governance option notified by some stakeholders. At the time of drafting, PO2 is therefore more 
efficient to meet the objectives and form the best performing package when considering the benefits in terms 
of effectiveness, efficiency and subsidiarity. No alternative combination of policy options would have allowed 
to effectively meet the specific objectives. 

Proposing  PO3  without  ensuring  the  required  of  financial  and  human  resources  would  lead  to  significant 
delays in implementation and undermine the delivery of some tasks.   

Finally,  while  this  impact  assessment  presents  a  coherent  and  effective  approach  to  tackle  the  identified 
problems,  political  arbitration  on  some  of  the  measures  may  remain  affected  by  parallel  on-going  policy 
developments. The overall outcome of the initiative will depend to a large extent on whether Member States 
and other EU initiatives make funding available to support the Strategic Projects.  

8.1.  The economic and environmental model for the EU CRM value chain 

As discussed in chapter 4, the main objective of the CRM Act is to ensure the EU’s secure supply of CRMs, 
while  incentivising  the  further  development  of  sustainable  supply  sources.  The  main  tool  for  this  is 
strengthening  the  EU’s  capacity  along  the  CRM  value  chain  (specifically  targeted  by  SO2).  Under  the 
preferred option, such value chain would be enabled in different ways both regulatory and through factors 
outside of this initiative (e.g. measures to tackle high energy costs, stronger use of the trade policy toolbox, 
increased investment in skills and R&I).  

A key aspect of the long-term economic viability of the EU CRM value chain is political commitment: By 
setting targets (pillar B), investors receive assurance that measures (regulatory and financial) will be taken to 
guarantee  the  viability  of  their  investments.  More  concretely  regarding  the  measures  in  this  initiative,  the 
monitoring and risk preparedness actions (pillar C) would create demand from governments and companies to 
purchase secure CRMs, which will likely benefit most projects located in the EU.  

The permitting provisions (pillar E1) are likely the most direct factor reducing costs and thereby making CRM 
projects in the EU more viable, and depending on the availability of financial resources, the access to finance 
actions  will  compensate  for  the  remaining  cost  gap  (pillar  E2).  Various  actions  announced  under  the 
circularity/waste pillar (F) would provide incentives specifically for projects at the recycling stage. Economic 
footprint measures (pillar H) should also increase the willingness of customers to pay for sustainable CRMs, 
where EU CRM projects likely have a frontrunner position due to the high level of regulation in the EU. 

In this way, the pillars work together to address different barriers to the economic viability of an EU CRM 
value chain. The economic model for the EU CRM value chain can thus be described as one that relies not on 
satisfying demand from the cheapest sources, but on a joint effort by public and private actors to secure the 
existence of a fully developed EU CRM value chain even at higher costs. To some extent, these higher costs 
can be borne by downstream industries, who – in response to the experience of recent supply chain disruptions, 
and  to  increasing  customer  sustainability  demands  –  should  increasingly  be  willing  to  pay  a  premium  for 
secure and sustainable CRM supplies. EU CRM producers in turn will likely have a head start in catering to 
this  demand,  by  virtue  of  being  subject  to  strong  environmental  regulation,  and  the  existence  of  the 
interconnected European internal market that guarantees supply security. However, it should not be ignored 

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that  a  gap  may  persist  between  downstream  industry’s  willingness  to  pay  and  the  higher  cost  of  CRM 
production in the EU. This is where public support – by the EU by Member States, in line with State Aid rules 
– comes in. While financial resources are not made available in this initiative itself, the framework created by 
it  can  dock  into  existing  or  future  funds  where  a  financing  gap  to  realise  the  targets  of  this  initiative  is 
identified. Over time, the need for such support should decline, as the increasing availability of secondary raw 
materials and reduced energy costs due to renewable energy sources should reduce the role that energy costs 
and geological occurrences (weak points in the EU’s current position on CRM markets) play while increasing 
the importance of Europe’ leadership in recycling. These measures and developments should ensure the long-
term  economic  viability  of  the  CRM  value chain in Europe,  which is crucial for the security  of  supply  of 
downstream users. 

8.2.   REFIT (simplification and improved efficiency) 

The changes to existing legislation that this initiative would provide are limited to waste legislation (pillar F, 
laid out in detail in section 5.2). The measures are designed to consist in targeted amendments to existing 
provisions, thus not presenting significant choices in the context of the overall regulation and not requiring 
extensive analysis or stakeholder consultation. As they clearly relate to critical raw materials and, considering 
the growing importance of secondary supply, are an essential part of the solution to the problem this initiative 
revolves around, it is considered appropriate to assess them as part of this Impact Assessment and to consider 
them outside of the scope of REFIT. 

8.3.  Application of the ‘one in, one out’ approach 

The initiative is in the scope of the “one in, one out” approach. 

The administrative costs for businesses that would result directly with this initiative are very limited and relate 
to: 

- 

ongoing costs: 

o 

o 

o 

reporting obligations of a small number of large companies operating in the CRM value chain, 
estimated at EUR 49.000 in total for all 64 companies concerned to report twice a year to the 
governance structure (see calculations in Annex 4).  while reporting would remain voluntary 
for other companies. The costs induced are likely to be offset for the same companies, which 
would benefit, under certain conditions (e.g., having their projects labelled as strategic) from 
efficiency gained from the streamlining of permitting obligations.  
reporting for large companies using Strategic raw materials (manufacturing) (on stress tests) 
-estimated at EUR 38.000 pear year 
reporting  available  information  on  critical  raw  materials  content  of  waste  streams  and 
composition of the waste EUR 700 000 for existing mining sites  

-  One-off  costs  to  declare  the  environmental  footprint.  This  is  estimated  to  create  a  one-off  

administrative cost of EUR 14.55 million for all companies selling those CRMs. 

No reductions of administrative costs for companies have been identified. 

The adjustment costs for businesses resulting from this initiative consist of: 

-  Additional  requirements  on  conducting  a  risk  assessment  under  the  form  of  a  stress  test  for  large 
companies in strategic sectors using strategic raw materials, estimated at EUR 1 million per year in 
the EU Costs related to certification of general sustainability claims and to the studies required for 
underlying environmental footprint. This one-off adjustment cost is estimated to be in the range of 
EUR 3.75 – 10 million for companies (see Annex 4).   

The initiative does not foresee any cost applicable to citizens. 

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9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

The Commission will carry out an evaluation of the effectiveness, efficiency, coherence, proportionality and 
subsidiarity of this legislative initiative and present a report on the main findings to the European Parliament, 
the Council, the European Economic and Social Committee, and the Committee of the Regions four to six 
years after the date of application of the legislative act. The Commission may propose report how to improve 
the CRM Act.  

This review mechanism is similar to the review mechanisms included with the Commission proposal for a 
Regulation  establishing  a  Single  Market  Emergency  Instrument  and  repealing  Council  Regulation  (EC) 
2679/98140 as well as with the Commission proposal for a Regulation of the European Parliament and of the 
Council establishing a framework of measures for strengthening Europe's semiconductor ecosystem (Chips 
Act)141. 

The Commission and Member States will regularly monitor the application of the legal acts, in particular the 
effectiveness of the measures to monitor structural supply challenges if critical raw materials faced by the EU 
industry.  

In addition, the achievement of EU supply capacity targets, as explained in pillar B (section 5.2) would be 
used to monitor the success of the initiative. The success  of this initiative would be measured in terms of 
greater  security  of  supply  (which  is  not  per  se  measurable  but  relevant  aspects,  such  as  the  share  of  EU 
production  and  of  global  supply  concentration  can  be  measured,  as  they  are  already  in  the  criticality 
assessment), the scale (in terms of financial volume) and speed (in terms of permitting delays) of investments 
in the EU CRM value chain within the EU. The contribution of secondary CRMs is also an important indicator 
of success, as is the distribution between high and low environmental performance scores, gathered through 
the  environmental  footprint  measures.  Through  increased  domestic  production  and  circularity,  as  well  as 
through  constructive  interaction  with  external  CRM  producers  –  aided  by  the  incentives  provided  by  the 
environmental footprint system – the EU’s supply of CRMs would also be more sustainable.  

Concretely, the following indicators to determine the initiative’s success could be developed as follows: 

Specif
ic 
object
ive 

1 

2  

Indicator 

of 

Unit 
measure
ment 

Data 
source 

Diversification 
level 
of 
companies  

and 

Extraction/refi
ning 
recycling 
capacity  
(3 
indicators) 

distinct 

%  Size  of 
supply 
coming 
from  only 
one 
source 
% 
compared 
EU 
to 
consumpt
ion 
of 
refined 
material 

Compani
es survey 

of 

Frequenc
y 
measure
ment 

Every  3 
years 
(adapt 
with 
report) 

Baseline 

Target 

Defined  per 
company 

Reduction 
companies’ 
supply 
concentration 

Data 
quality 
rating 

of 

Low 

Criticality 
assessme
nt 

Defined 
in 
criticality 
assessme
nt  (every 
3 years) 

2023 
criticality 
assessment 
the 
provides 
baseline 
for 
each material 

Increase  of  EU 
capacity 
along 
the value chain 

High 

140 COM(2022)459 
141 COM(2022)46 final. 

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in 

Increase  for  the 
of 
number 
the 
projects 
different 
value 
chain stages 
Increase 
of 
Strategic Projects 
to 
ensure 
diversification 
Reduction 
process 
toward 
timescale 
prescribed 
Each  MS  should 
have  an  updated 
national/regional 
programme I 

of 
length 
the 

High 

High 

High 

High  

Increase  

High 

Depends 
indicator 

on 

High 

2 

2 

2 

2 

2 

3 

0 

0 

(no 

NA 
Strategic 
Project now) 

of 

Review 
existing 
national/regio
nal 
programmes 
in  MS  one 
year  after  the 
Act 
CRM 
entered 
to 
force.  
2023 
criticality 
assessment 
the 
provides 
for 
baseline 
each material 

Depends  on 
indicator 
the 
the 
and 
material 
in 
question 

of 

Number 
Strategic 
Projects in EU 

[number]  Commissi

on 

of 

Number 
Strategic 
Projects in third 
countries 
Average 
permitting time 
for 
Strategic 
Projects 

Existence 
of 
national/region
al  programmes 
for  exploration 
of strategic and 
CRM resources 
in MS 

Recycling 
input rates 

Environmental 
of 
footprint 
CRMs 

[number]  Commissi

on 

Length  in 
months 

Member 
State 

 Number 
of 
program
in 
mes 
each MS  

Report  by 
each 
Member 
State 

Criticality 
assessme
nt  based 
on 
material 
system 
analysis 
Commissi
on 

%  End  of 
life 
recycling 
input rate  

 (Depends 
on 
indicator 
chosen, 
e.g. 
carbon 
footprint 
in  gCO2-
eq./kg  of 
material) 

Yearly 
report 
Board 

to 

Yearly 
report 
Board 

to 

Report  to 
the  board 
every 
three 
years 
Yearly   

Defined 
in 
criticality 
assessme
nt 

Every 
three 
years 
(after 
entry  into 
force  of 
calculatio
n rules for 
informati
on 
requirem
ents) 

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ANNEX 1: PROCEDURAL INFORMATION 

1.  Lead DG, Decide Planning/CWP references 

The European Critical Raw Materials Act is part of the 2023 CWP under the Commission’s priority ‘A Europe 
fit for the digital age’. The lead DG for this initiative is the DG for Internal Market, Industry, Entrepreneurship 
and  SMEs  (DG  GROW).  The  Directorate  in  charge  is  Directorate  I  –Ecosystems  IV:  Mobility  &  energy 
intensive industries. The initiative is encoded in Decide Planning with the reference PLAN/2022/1733. 

2.  Organisation and timing 

The Secretariat-General set up the Inter-service Steering Group to assist in preparing the initiative in Q3 2022. 
There have been four ISSG meetings. The last ISSG consultation took place on 13 December 2022. A written 
consultation on the revised IA, following the RSB’s negative opinion, was conducted from 31 January to 2 
February 2023. A positive opinion with reservations was issued by the RSB on 16 February 2023. 

The Call for Evidence and Public Consultation for this initiative were published on 30 September 2022 and 
was open to feedback from all stakeholders for a period of eight weeks, until 25 November 2022. The timing 
for adoption of the new act by the Commission is Q1 2023. 

3.  Consultation of the RSB 

 A meeting with the RSB took place on 18 January 2022. The RSB issued a negative opinion on 20 January 
2022, following which this Impact Assessment was revised as follows: 

RSB Recommendations 

Revisions introduced 

in 

including 

The report should provide more clarity on the 
policy  context,  the  lessons  learned  from  past 
actions  and  the  planned  interaction  with 
parallel  measures, 
the 
sustainability,  external,  development,  trade 
and research policy areas. The report should be 
more  specific  on  the  regulatory  gap  to  be 
tackled, particularly in the sustainability area. 
The  impact  of  environmental  legislation  and 
public  attitudes  on  EU  CRM  production 
should  be  also  covered  when  presenting  the 
problem drivers. 

The report further expands on the context and 
past actions, with more detailed discussion of 
the 2008 raw materials initiative and the 2020 
Action Plan, and the lessons learnt (Annex 8). 
Textbox 2 in chapter 5 provides an overview 
of  the  EU’s  international  actions  on  critical 
raw materials, and chapter 2.1 provides more 
details on the international dimension of the 
problem, which are central to the problem and 
previously  only  figured  in  Annex  10.  The 
international  dimension  is  considered  as  a 
baseline scenario, but since these actions are 
continuous and are in place whichever policy 
options  is  chosen,  they  are  also  further 
assessed  in  the  relevant  impact  sections 
(impact on international trade) in chapter 6. 
More 
non-regulatory 
dimensions  have  been  integrated  throughout 
the document, including by adding the lack of 
skills  and  the  lack  of  public  acceptance  as 
drivers in chapter 2, and by listing trade, R&I 
and  skills  as  aspects  of  the  main  problem 

generally, 

the 

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legislation 

tackled  through  the  overall  initiative  (new 
chapter 5.4). We have expanded the detailed 
discussion  of  interactions  with  existing  and 
proposed 
in  Annex  8  and 
synthesised the most relevant interactions in a 
section  on  “regulatory  gaps  analysis”  under 
chapter  1.2,  with  a  special  focus  on 
sustainability legislation, notably CSDD.  
The  objectives  were  rearranged  (section  4). 
The  general  objective  of  the  Critical  Raw 
Materials  Act  is  to  ensure  the  EU’s  secure 
access 
to  critical  raw  materials,  while 
incentivising the development of sustainable 
supply sources. This ultimately contributes to 
economic growth and high living standards in 
the  EU,  prevents  disruptions  and  distress 
within  the  European  single  market  and 
increases  the  competitiveness  of  European 
businesses, while not neglecting the EU’s role 
in  promoting  sustainable  development  and 
environmental protection globally.     
The  specific  objectives  have  been  rephrased 
and  condensed  into three specific  objectives 
that do not prejudge the solutions proposed: 
SO1.  Increase  EU  industry’s  awareness  and 
mitigation of CRM-related risks in the global 
supply chain 
SO2.  Increase  the  EU  CRM  value  chain’s 
capacity in the internal market 
SO3.  Reduce  the  environmental  footprint  of 
the EU’s CRM consumption 
Potential  trade-offs  are  explained  upfront  in 
chapter 4.2 on specific objectives. 
The report further elaborates on how success 
of the initiative could be monitored, notably 
by  the  number  of  Strategic  Projects  and  the 
achievement of the value chain targets (pillar 
B) (chapter 9). 
The  envisaged  economic  and  environmental 
model  for  the  EU  CRM  value  chain  was 
further  detailed in a  new  chapter  8.1,  which 
also  comments  on  its  long-term  economic 
viability. 
In section 5.2, the report developed further the 
details  of  the  different  measures  composing 
the  policy  options,  following  additional 
reflections in the drafting of the legal text and 
consideration  for  the  subsidiarity  of  the 
measures, notably for: 

-  Targets (headline value chains target 
for extraction, refining and recycling 
instead  of  a  complex  target  setting 
process); 

The  report  should  present  a  clear  and 
consistent  set  of  general  and  specific 
objectives and a timeline (or major milestones) 
by  which  these  should  be  achieved.  Specific 
objectives should be formulated in a way that 
they  do  not  pre-empt  the  choice  of  policy 
options.  Trade-offs 
resulting 
prioritisation)  as  well  as  synergies  between 
objectives,  such  as  security  of  supply,  EU 
EU’s 
industry 
decarbonisation efforts and environmental and 
sustainability  impacts  should  be  explained 
clearly.  

competitiveness, 

(and  any 

The  report  should  also  be  clearer  on  the 
envisaged economic and environmental model 
for  the  EU  CRM  ecosystem  and  value  chain 
(e.g.  improved  autonomy  of  CRM  extraction 
and  refining  in  Europe,  mainstreaming  of 
circular  economy  models,  more  reliable  and 
sustainable  sourcing  from  third  countries, 
increased use of alternative solutions). On this 
basis,  it  should  explain  what  success  would 
look like and how it would be measured. 

initiatives 
and 

The  measures  considered  under  the  policy 
options need to be presented in a clearer way. 
Measures which will be subject to analysis in 
(such  as  certain  waste 
later 
measures 
footprint 
environmental 
thresholds)  can  be  referenced  and  would  not 
need to be analysed in depth in this report. The 
report  should  provide  greater  clarity  on  the 
nature, types of targets, the supporting analysis 
required  and  the  envisaged  target  setting 

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process.  The  concept  of  strategic  projects 
should be developed in more concrete terms. 
The  report  should  clarify  the  streamlining  of 
permitting  processes  related 
to  strategic 
projects  and  how  these  would  respect  the 
subsidiarity 
Diversification 
measures  would  need  further  precision  on 
issues such as offtake agreements, private and 
public 
the 
sustainability footprint and how it would work 
inside  and  outside  the  EU  should  be  more 
thoroughly explained. 

stockpiling.  The 

principle. 

role  of 

-  Strategic  Projects 

(more 

agile 
selection of projects rather than a list-
based  approach  and  possibility  for 
Member States to object to a project 
being  granted 
status; 
clarification  of  the  main  criteria  for 
selection, including  EU  added  value 
and long-term viability); 

strategic 

-  Permitting 

(clarification  of 

the 
requirements  that  would  apply  to 
Member States for Strategic Projects’ 
permitting,  at  different  stages  of  the 
how 
process; 
clarification 
subsidiarity 
i.e.  by 
allowing Member States to object to 
a  project  being  granted  strategic 
status); 

is  ensured, 

of 

-  Diversification  measures  (providing 
clearer requirements on a limited set 
of  companies,  while  providing  them 
with  the  possibility  to  explain  why 
compliance is not possible); 

-  Stockpiling  measures  (the  different 
obligations  that  apply  to  private  or 
public 
further 
elaborated) 

stockpiling 

are 

-  Circularity  and  waste  measures 
(further 
of  which 
explanation 
measures  would  come  in  the  Act 
itself and which would come at a later 
stage,  and  some  changes  to  the 
the 
measures  included,  reflecting 
evolving 
legal 
drafting); 

discussions 

in 

-  The  details  pertaining 

a 

of 

as 

step, 

the 
to 
functioning 
environmental 
footprint  have  also  been  further 
explained (the measure does not ban 
all  relatively  unsustainable  CRMs 
but, 
creates 
first 
transparency  allowing  customers  to 
choose how they value sustainability 
in  comparison  to  other  aspects  such 
as price and availability, and only in 
a second step, provides the possibility 
to  impose  thresholds,  based  on  a 
dedicated IA, that could exclude the 
most  unsustainable  CRMs  from  the 
EU  market.  This  second  step  would 
sufficient 
only 
information 
the 
transparency  stage,  and  only  where 
significant  disruptions  to  the  EU 

is  gathered  at 

apply 

after 

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 The report should be clearer on the investment 
necessary to deliver on the objectives and the 
envisaged  funding  structure.  It  should clarify 
the  role  of  and  financial  support  to  strategic 
projects, the envisaged mix of national and EU 
level  funding  and  the  role  of  State  aid.  It 
should  explain  how  the  long-term  economic 
viability  of  high  investment  measures  and 
strategic projects will be ensured. 

The  report  should  better  assess  impacts  of 
options on third countries and trade, including 
compliance  with 
international  and  WTO 
standards. It should further assess the potential 
economic benefits and be clearer on the overall 
impacts  of  EU 
industry  competitiveness 
(including for SMEs) as well as the EU based 
CRM ecosystem. The overall compliance with 
the ‘do  no significant  harm’  principle  should 
be further developed, as well as explaining the 
role of the measures for the EU’s overarching 
green transition strategies. 

industry’s green and digital transition 
or  other  key  industrial assets  can  be 
excluded.) 

to 

to 

linked 

the  main 

Estimates regarding the investment necessary 
to deliver on the objectives were included in 
Annex 10 (Driver 2.3 Difficulty in accessing 
finance)  and  Annex  12  (Estimation  of 
investment  needs).  These  have  now  been 
better 
text  and 
complemented  by  some  estimates  of  a 
suitable size of an InvestEU platform, notably 
in  sections  6.1.1.1  and  6.2.1.1  on  impact  on 
companies. The option on access to finance is 
now  further  explained:  the  preferred  option 
relates  to  the  development  of  a  framework 
that allows to best assess the relevant funding 
and  investment  vehicles  available  for  a 
dedicated Strategic Project (chapter 6). 
It  is  also  specified  whether  the  measures 
relate  to  investment  support  or  to  the  long-
term operations of the Strategic Projects.  
The  report  discusses  high  energy  prices  in 
chapter 2, under Driver 2.3 “Lack of access to 
finance” and in section 6.2.1.3 on impacts.  
impacts  has  been 
The  assessment  of 
strengthened 
feasible. 
the 
Quantitative  information  has  been  added  to 
further  explain  the  benefits  of  the  options, 
notably  on  Strategic  Projects’  job  creation 
potential (see Annex 3 and Annex 4) 
Throughout chapter 6, additional information 
on  cost-  and  international  competitiveness, 
including  for  SMEs,  has  been  added  in  the 
assessment  of  impacts.  The  effects  of  high 
energy  prices  have  also  been  discussed 
(Chapter 2, subproblem 2). 
In  addition,  the  report  further  assesses  the 
impact  on  third  countries  and  trade  (WTO 
compliance,  notably  in  Section  6  under  the 
on 
different 
on 
international 
competitiveness. 
Further details were added on the contribution 
of the options towards the goals set out in the 
their 
European  Climate  Law  and  on 
compliance with the “do no significant harm” 
principle,  notably  by  explaining  which 
criteria  could  be  affected  by  the  measures, 
also  taking  into  account  compliance  with 
environmental  acquis  (see  Environmental 
Impact for the different options.)   

impact 
as 

as  well 

options 

policy 

extent 

trade) 

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The comparison of options should include the 
coherence dimension. This should allow for a 
reflection  of  the  main  trade-offs  as  indicated 
above  and  overall  consistency  with  existing 
and  parallel  measures.  The  effectiveness 
comparison should be based on a revised set of 
specific objectives. The  preferred  package  of 
measures  should  be  further  justified.  3  The 
report  should  also  clarify  the  overall  net 
impacts  on  main  parameters.  Costs  and 
benefits  should  be  quantified  to  the  extent 
possible  and  the  table  in  annex  3  further 
elaborated, including on the One In: One Out 
requirements 

that 

report 

further  explains 

The 
the 
combination  of  approaches  into  options  are 
shaped  not  only  based  on  the  degree  of 
ambition and stakeholders' feedback, but also 
on the available set of resources to implement 
each  option’s  provisions 
(Chapter  5.3 
Description of the policy options) 
The  report  comprises  a  new  coherence 
dimension  that  allows  to  better  detail  the 
comparison  of  options  and  show  the  trade-
offs, both between the options and across EU 
policies (chapter 7). It is also better explained 
why policy option 2 is the preferred package. 
The overall net impacts were adapted with the 
addition of new qualitative benefits, notably 
in its effect on the one in one out requirements 
(c.f. Annexes 3 and 4) 
Additional  costs  were  added  to  reflect  the 
changes  of  one  of  the  pillars  (C.3),  by 
calculating the number of companies affected 
by risk assessment obligation (stress test) (c.f. 
Annexes  3  and  4;  and  6.1.1.1  impact  on 
companies) 
The  comparison  of  costs  and  benefits  was 
expanded in the  Chapter  8.2,  Application of 
the ‘one in, one out’ approach was explained 
in section 8.2  and in Annex 3. 

Further to this resubmission, the Impact Assessment received a positive opinion from the RSB on 16 February 
2022, with comments, which were addressed as follows: 

RSB Recommendations 

Revisions introduced 

The  report  should  provide  a  more  coherent 
description  of  the  overall  policy  context  and 
include  for  example  the  Global  Gateway.  It 
should better explain the link and coherence with 
the flanking measures envisaged in parallel to this 
initiative, such as on research and trade. The link 
between this initiative and the battery regulation 
should also be clarified, since similar mechanisms 
apply and certain CRMs are covered also by the 
battery  act  with  a  risk  of  redundancy.  Strategic 
partnerships, which are not specified as a policy 
option  in  the  intervention  logic,  should  not  be 
assessed  in  the  impacts  section  but  clearly 
explained as flanking measures and in the context 
section  and  included  in  the  baseline  scenario. 

The  Global  Gateway  was  mentioned  in  the 
interplay with existing instrument of section 1.3 

The  overall  policy  context  was  ed  by  adding  a 
section  1.2  on  the  policy  context  and  previous 
nonregulatory actions taken in the area of critical 
raw materials. 

The link and coherence with the parallel measures 
on  research  and  trade  was  further  explained  in 
section  5.4,  underlining  that  ongoing  work  was 
already under way regarding skills, research and 
innovation  or  trade,  but  that  the  accompanying 
communication  would  further propose  measures 
to reinforce those aspects, which were identified 
in the problem section. 

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Lessons learnt should be activated for the purpose 
of the policy context and problem definition. 

The report should better explain to what extent the 
problem of sustainable sourcing of CRMs linked 
with the main problem of lack of secure access to 
CRMs for the EU 

The content of the options and functioning of the 
key  measures  should  be  better  presented  in  the 
main report. While the overview of policy options 
gives a broad idea of the available policy choices, 
these  need  also  to  be  explained  in  a  clear,  but 
concise  manner  in  the  option  definition  section 
with  corresponding  references  to  the  detailed 
description currently contained only in an annex. 
The  report  should  explain  what  is  behind  each 
measure  presented  under  each  option  (e.g. 
strategic  projects,  access  to  finance  ,  etc),  how 
they  are  intended  to  function  and  what  they  are 
expected to deliver. Policy  measures which will 
require  further  analysis  (certain  waste  measures 
and  thresholds  for  the  environmental  footprint) 
should be clearly indicated in the preferred option 
section.  

(4)  The  report  envisages  financial  support  as  a 
permanent  feature  of  EU  CRM  value  chains.  It 
should explain how this long term framework for 
economic  operators  will  ensure  that  public 
funding  is  used  fully  in  line  with  principles 
applying to EU funding and State aid and sound 
economic incentives continue to apply. It should 
assess  potential  risks  relating  to  permanent 
funding  structures  and  specify  under  which 
conditions financial support could be granted.  

The link  with  the  battery  regulation  was further 
evidenced  by  integrating  the  description  of  the 
environmental footprint pillar in the main text, as 
it  contains  a  paragraph  explaining  the  link 
between 
two 
the  coherence  between 
approaches. 

the 

The parts on the impact Strategic Partnerships of 
were conscribed to the section 5.1 on the baseline 
scenario. 

Lessons learnt were included in the main text. In 
section 2.4, after having explained the likelihood 
of the problem persisting. 

A sentence was added in section 4.2 at the end of 
the specific objectives to specify that measures to 
ensure  higher  sustainability  of  CRM  production 
should always consider the need to ensure supply 
security in parallel. 

The content of the options was introduced in the 
main report, in section 5  

It was specified that for some pillars, such as on 
environmental footprint and circularity measures, 
additional analysis would be required (in section 
5). 

Section 5.2 and annex 5 explain in the approaches 
which  envisage  financial  support  that  such 
support should only be granted in case of market 
failures  and  where  projects  show  long-term 
viability, in line with existing state aid rules. This 
should prevent the establishment of permanently 
supported projects under normal conditions. The 
requiring 
unlikely  case  of  sound  projects 
to 
permanent 
permanently significantly higher energy costs, is 
assessed in the part on competitiveness for option 
2. 

for  example  due 

support, 

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(5)  The  report  should  clarify  by  when  the 
envisaged  technical  standards  for  critical  raw 
materials  value  chain  could  be  realistically 
expected  to  be  available,  what  the  related 
uncertainty is and how this has been reflected in 
the impact analysis. (from entry into force) 

(6)  The  report  should  provide  a  more  granular 
comparison  of  the  effectiveness  of  options  in 
terms  of  achieving  the  specific  objective  to 
increase  the  EU  CRM  value  chain’s  capacity. 
This objective is very broad in terms of relevant 
measures  that  could  contribute  to  it  and  thus 
requires  a set  of  more  specific criteria  based on 
their difference in delivery on effectiveness which 
could be measured.  
On this basis the report should better justify the 
choice  of  the  preferred  option,  including  by 
explaining  whether  alternative  combinations  of 
option packages of measures (other than the three 
presented) have been assessed.  

The average time to develop dedicated standards 
was  included  in  the  corresponding  options  in 
section 5. 

The  specific  objective  2  on  supporting  the  EU 
value chain was further completed by its different 
components  (section  4.2).  To  that  end,  the 
effectiveness of options was also further analysed 
in a granular way with the addition of a dedicated 
table in section 7, and this reasoning was included 
in 
the  preferred  option’s  section,  notably 
underlining that no other combination of options 
would have performed better. 

Evidence, sources and quality 

Evidence and data that were used in this Impact Assessment included:  

A.  Academic studies and literature on the effect of previous crises on critical raw materials, as well as 

existing position papers and other documents drawn up by relevant stakeholders;  

B.  Newspaper  articles  and  press  materials.  The  references  are  cited  in  the  main  text  of  the  report  as 

appropriate.  

C.  Internal studies of Commission services, and notably of the Joint Research Centre.  

The Impact Assessment further relies on the information received from consultation activities as detailed in 
the synopsis report contained in Annex 2 of this Impact Assessment 

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ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) 

In the context of the Impact Assessment on the European Critical Raw Materials Act, various consultation 
activities were conducted between September and November 2022. The purpose of the consultation was to 
collect evidence and views from a broad range of stakeholders, giving them an opportunity to provide relevant 
data and information on the problems and potential solutions to secure the supply of critical raw materials in 
the EU. While attempting to reach the widest possible range of stakeholders, the results of the consultation 
activities represent only the opinions of the respondents. This Annex presents the results of the consultation 
activities carried out.  

The consultation activities included:  

  A call for evidence published for feedback from the 30th of September to the 25th of November 2022,  
  A public consultation published in the “Have your say” portal containing multiple choice and open 
questions  covering  regulatory  and  non-regulatory  measures,  running  in  parallel  with  the  call  for 
evidence. 

  Questionnaires on “Permitting in the EU Member States” and on “Stockpiling of raw materials in the 
EU Member States” shared on the 28th of October with the Raw Materials Supply Group (RMSG).  

Concerning the call for evidence and the public consultation, both were open to the public. The consultation 
process through the RSMG group targeted Member States, stakeholders and experts.  

1. Overview of the participants  

For all stakeholder activities, the main stakeholder groups addressed were:  

  National authorities responsible for the survey, exploration and overall management of raw materials 

and mineral resources;  

  Non-Governmental Organisations representing civil society;  
  Associations representing industry, businesses and professionals; 
  Businesses, including Small and Medium-sized Enterprises (SMEs);  
  Social partners;  
  Academic experts on non-energy extractive industries, research community;  
  EU citizens. 

For the call for evidence, 310 answers were received coming mainly from companies and business associations 
(144),  followed  by  EU  citizens  (54),  NGOs  (49),  Academia  and  others  (39),  public  authorities  (12), 
environmental  organisations  (5),  trade  unions  (3)  and  non-EU  citizens  (2).  There  were  responses  from 
stakeholders from 19 Members States and 12 non-EU countries. In addition, 190 policy papers were submitted. 
Most responses came from Belgium, Germany and Spain. Among non-EU countries, Norway accounts for the 
largest number of responses. Most of the contributions presented a favourable attitude towards the upcoming 
act and welcomed the European Commission’s initiative.  

the  open  public  consultation,  263  answers  were  received  coming  mainly  from  business 
For 
associations/companies/business  organizations  (164),  followed  by  non-governmental  organisations,  EU 
citizens, public authorities and other stakeholders. 49 stakeholders attached a policy paper to their answers. 
The  majority  of  respondents  represent  a  large  (250  or  more  employees)  organization  (81  out  of  259 
respondents; 31 %). 12 % (32 out of 259) of the respondents are from medium-sized organizations (50 to 249 
employees), 20 % (53 out of 259) are from small organizations (10 to 49 employees) and 26 % (67 out of 259) 
are from micro-enterprises (1 to 9 employees).  

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Regarding the questionnaires on permitting procedures and stockpiling policies sent to the members of the 
Raw Materials Supply Group, input from 9 Member States, 2 non-Member States and 4 business associations 
was received.  

2. Replies to the Call for Evidence for an Impact Assessment on the European Critical Raw Materials 
Act  

The  Commission  consulted  stakeholders  to  provide  evidence  for  the  impact  assessment  on  the  European 
Critical Raw Materials Act via the have-your-say portal. This consultation was open to the public. A total of 
310 responses were received, and 115 policy papers were submitted.  

Stakeholders were requested to give their views on the problems and initial solutions via regulatory and non-
regulatory measures identified by the European Commission. The regulatory dimension was built around four 
main pillars as follows:  

  Pillar 1. Defining priorities and objectives for EU actions,  
  Pillar 2. Improving the EU’s monitoring, risk management and governance in the field of CRM,  
  Pillar  3.  Strengthening  the  EU’s  critical  raw  materials  value  chain  (mining,  refining,  processing, 

recycling) in a global context,  

  Pillar 4. Ensuring a sustainable level playing field across the Single Market.  

In addition, the following non-regulatory measures were also presented:  

  Strengthening the EU external actions,  
  Accelerating research and innovation,  
  Enabling the development of skills needed for the critical raw materials value chain. 

General priorities  

A vast majority welcome the initiative and support the need to secure the supply of raw materials for the digital 
and green transition through a new regulation. A small number of stakeholders, mainly from the aggregates 
industry, pointed out their preference for the legal instrument to be a Directive, in order to better adapt the 
upcoming Act to Member States’ specificities.    

Overall, stakeholders acknowledge the necessity for the EU to overcome the challenge of critical raw materials 
dependency  by  diversifying  the  supply  chain  and  increasing  EU  capacities  while  ensuring  both  the 
competitiveness  of  EU industry  and  supply  chain  sustainability.  For  almost  every  business, barriers  to  the 
development  of  CRM  projects  in  Europe,  such  as  the  lack  of  available  funding  and  complex  and  long 
permitting  processes,  are the  main  concern.  NGOs  and  citizens  most frequently  mentioned the absence  of 
measures targeting the demand side of CRM consumption and the need to ensure high environmental and 
social standards as well as transparent governance processes. A small group of EU citizens’ responses also 
showed their opposition to the current regulation. In addition, national authorities and experts’ groups focussed 
on the need to enhance EU geological data and improve monitoring and governance capacities, with differing 
positions on the need for a network of national agencies or a transnational EU agency.  

Many respondents mentioned the need for consistency with other EU legislation, showing awareness of the 
interconnections  between  critical  raw  materials  and  EU  energy,  corporate  governance,  human  rights  and 
environmental,  health  and  products  regulation  such  as  the  Water  Framework  Directive  (WFD),  the 
Environmental  Impact  Assessment  Directive  (EIA),  the  Habitats  Directive,  the  EU  Industrial  Emissions 
Directive, the Waste Electrical and Electronic Equipment (WEEE), the Extractive Waste Directive (EWD), 
the  Waste  Shipment  regulation,  the  End  of  Life  Vehicles  Directive  (ELV),  the  Registration,  Evaluation, 
Authorisation and Restriction of Chemicals directive (REACH), the Renewable Energy Directive (RED), the 
Batteries  Regulation, the  proposal for  a  Directive  on Corporate  Sustainability  Due  Diligence  (CSDD), the 

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Supply Chain Sourcing Obligations Act, article 191 of the Treaty on the Functioning of the European Union, 
the  Packaging  and  Packaging  Waste  Directive,  the  Trans-European  Energy  Infrastructure  (TEN-E) 
Regulation, the Ecodesign Directive, the proposal for an Ecodesign for Sustainable Products Regulation, and 
the proposal for a Regulation on Prohibiting products made with forced labour on the Union market.  

Regulatory Measures  

Pillar 1. Defining priorities and objectives for EU actions.  

Stakeholders support a sound, data-based and transparent definition of critical raw materials. Stakeholders call 
to ensure that the list of raw materials is flexible and easily reviewed over time to be able to answer quickly 
and efficiently in times of crisis. In addition, most stakeholders suggest to broaden the scope of the list, calling 
to  anticipate  the  future  needs  of the  digital and  green  transition  as  well  as  strategic  dependencies in  other 
sectors such as defence or health. In this context, a reassessment of the methodology to define criticality is 
suggested, with proposals varying across stakeholders. Also, most of the feedback from businesses underlines 
new materials to be considered under the scope of criticality with copper, aluminium and nickel commonly 
repeated.  

Only few respondents address EU objectives to increase domestic production. Among those that do, setting a 
2030 EU target on critical raw materials is suggested to send a strong signal to Member States and European 
industries and work towards more strategic autonomy.  

Pillar 2. Improving EU’s monitoring, risk management and governance in the field of CRM 

Stakeholders acknowledge the lack of unified governance and up-to-date data on raw materials across the EU. 
A general call is made for strengthening and improving the coordination and monitoring capacities in Europe. 
Most  research  institutions  support  harmonising  reporting  on  the  basis  of  the  United  Nations  Framework 
Classification  for  Resources.  National  authorities  and  sectoral  associations  mostly  agree  with  granting 
monitoring tasks to geological agencies across Europe and implementing a coordinated network, with partial 
alignment on the need for a governance body. Several companies and associations suggest the creation of an 
independent EU agency that would help develop projects in the EU as well as providing expertise to European 
institutions and companies.  

On  stockpiling,  respondents’  views  are  cautious,  with  national  authorities  raising  questions  about 
administrative feasibility and additional costs for Member States while businesses stress adverse impacts on 
prices and administrative burdens. 

Civil  society  supports  collection  and  open  access  to  data,  while  most  companies  mention  additional 
administrative  burden  and  believe  that  building  a  common  European  database  should  include  provisions 
ensuring that sensitive information is not disclosed. 

Pillar 3. Strengthening the EU’s critical raw materials value chain  

Stakeholders,  and  businesses  in  particular,  emphasize  a  lack  of  funding  incentives,  as  well  as  delays, 
uncertainties  and  complexities  in  the  permitting  procedures  as  major  barriers to  project  development.  It  is 
considered a priority to streamline permitting procedures. On the financing side, several businesses suggest 
the inclusion  of  mining  in the  EU  sustainable  finance  taxonomy,  financial support  via  State aid  under the 
Guidelines on State aid for climate, environmental protection and energy or the creation of Important Projects 
of Common European Interest for critical raw materials, the creation of a dedicated EU fund and the use of 
financial instruments such as EIB and EBRD loans and public guarantees. The received feedback shows that 
strategic projects are welcome as long as they do not impact negatively on prospective non-strategic mining 
projects.  

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The majority of civil society and NGOs think that priority should be given to secondary raw materials value 
chains to build a raw materials circular economy. On the specific actions aiming at promoting the extractive 
industry, civil society showed environmental and social concerns, calling to secure ‘no-go zones’ for extractive 
activities at EU level and ensure public participation and the respect of ESG standards for strategic projects.   

Pillar 4. Ensuring a sustainable level playing field across the Single Market 

Stakeholders  generally  agree  that  measures tackling  waste and  circularity  need to  be improved,  especially 
when addressing recycling and recovery of end-of-life products. Responses show that economic feasibility 
combined  with  a  lack  of  technological  maturity  are  considered  major  obstacles.  The  feedback  shows 
commitment from all stakeholders, with several calls for binding targets on recycling and material recovery 
from waste, as well as on better eco-design requirements. In particular, industrial associations operating in the 
recycling,  batteries  and  renewable  energy  sectors  call  for  paying  closer  attention  to  waste  streams  with 
forecasted growth, such as end-of-life vehicles or waste of electrical and electronic equipment. In addition, 
many respondents express their concern about waste leakage to third countries, which hinders access to waste 
resources and decreases industries’ competitiveness.  

Finally, many stakeholders call for ambitious, transparent and harmonised ESG standards to ensure the respect 
of responsible mining principles and European competitiveness. Overall, stakeholders support the enforcement 
of existing standards such as the Initiative for Responsible Mining Assurance in the upcoming act.   

Accelerating research and innovation & skills 

Feedback underlines a real need for research and innovation across the whole supply chain of critical raw 
materials. Stakeholders' priorities vary across groups with civil society calling to prioritize investments on 
secondary  raw  materials  and  substitution  technologies  while  businesses  want  to  tackle  technological 
challenges  in  their  respective  industrial  sectors,  and  national  authorities  and  expert  groups  focus  on  new 
technologies and knowledge gaps, with national authorities focusing on exploration activities. Respondents 
call for new R&I programmes and additional competitive grants for ongoing EU research programmes. 

In addition, a small group provided feedback on the need to re-skill and up-skill European workers ahead of 
the latest innovations and expected increasing demand in the raw materials sector.  

3. Public Consultation 

Overview 

The public consultation questionnaire includes questions on general challenges regarding raw materials but 
also  on  specific  issues  ranging  from  EU  policies  to  monitoring  and  permitting  processes  on  mining  to 
circularity.  

General Challenges 

A vast majority believes that EU possibilities to source CRM (primary, secondary, refining, processing) are 
currently underexploited or insufficient. 

Most respondents either agree or strongly agree with statements that refer to underexploited opportunities of 
critical raw materials (CRM) within the EU. 170 (66 %) respondents out of 259 agree or strongly agree that 
the  potential  to  extract  CRM  from  primary  sources  within  the  EU  is  currently  underexploited.  More 
respondents  (218  out  of  259  respondents;  84  %)  agree  or  strongly  agree  that  the  re-use  and  recycling 
opportunities within the EU are currently underexploited and only 2 respondents disagree or strongly disagree 
with the statement.  

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Further answers received on the following statements regarding the underexploited opportunities for CRM 
sourcing within the EU: 

  186 (72 %) out of 259 respondents agree or strongly agree that EU’s processing and refining capacities 

for CRM are currently underexploited. 

  167 (64 %) out of 259 respondents agree or strongly agree that the potential to diversify the EU’s 

external supply of critical raw materials is currently underexploited. 

  109 (42 %) out of 259 respondents agree or strongly agree that the potential to substitute critical raw 
materials  is  currently  underexploited  in  the  EU.  Almost  the  same  number  of  participants  (110) 
responded without stating an opinion (e.g., neutral, no opinion). 

  138 (53 %) out of 259 respondents agree or strongly agree that the potential to increase efficiency of 

critical raw materials use is currently underexploited in the EU. 

  154 (59 %) out of 259 respondents agree or strongly agree that the industry is not able to tackle critical 
raw materials sourcing challenges on the global market without further EU policy intervention. 
  194 (75 %) out of 259 respondents agree or strongly agree that current EU policies on critical raw 
materials are insufficient to effectively manage supply chain disruptions, shortages and price hikes. 

Current EU policies 

The respondents overall agree that current EU policy actions contribute to secure the EU’s supply of CRM. 
The following actions are supported: 

  Establishing and updating the critical raw materials list - 169 (65 %) out of 259 respondents agree or 

strongly agree 

  Developing  the  European  Raw  Materials  Alliance  –  161  (62  %)  out  of  259  respondents  agree  or 

strongly agree 

  Concluding  strategic  partnerships  with  resource  rich  third  countries  –  149  (58  %)  out  of  259 

respondents agree or strongly agree 

  Developing a transparent and stable trade framework for facilitating trade in raw materials, including 
through free trade agreements with resource rich third countries – 150 (58 %) out of 259 respondents 
agree or strongly agree 

  Funding  research  and  innovation  on  resource  efficiency,  recycling  and  substitution  of  critical  raw 
materials through Horizon Europe – 184 (71 %) out of 259 respondents agree or strongly agree 
  Developing  and  coordinating  knowledge  through  research  projects,  such  as  the  raw  materials 

information system – 179 (69 %) out of 259 respondents agree or strongly agree 

Lack of investment into the EU supply chain 

The  topic  of  financing  receives  similar  answers  as  most  respondents  see  difficulties  with  financing  and 
funding. The fear of reputational damage seems to be less important than the lack of public acceptance for 
new CRM projects: 

  Difficulty  to  access  private  financing  for  critical  raw  materials  projects  –  133  (51  %)  out  of  259 

respondents agree or strongly agree; 23 (9 %) disagree or strongly disagree 

  Difficulty to access public funding in the EU for critical raw materials projects – 145 (56 %) out of 

259 respondents agree or strongly agree; 10 (4 %) disagree or strongly disagree 

  Lack of technical standards for processes along the critical raw materials value chain – 73 (28 %) out 
of  259  respondents  agree  or  strongly  agree;  56  (22  %)  disagree  or  strongly  disagree;  130  (50  %) 
express no opinion 

  Fear of reputational damage for companies – 87 (34 %) out of 259 respondents agree or strongly agree; 

22 (8 %) disagree or strongly disagree; 150 (58%) express no opinion 

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  Lack of or limited public acceptance for new critical raw materials projects in EU – 165 (64 %) out of 

259 respondents agree or strongly agree; 22 (8 %) disagree or strongly disagree 

  Unfair competition from third countries – 158 (61 %) out of 259 respondents agree or strongly agree; 

19 (7 %) disagree or strongly disagree 

  Price volatility and unpredictability – 165 (64 %) out of 259 respondents agree or strongly agree; 14 

(5 %) disagree or strongly disagree 

  Lack of skilled workforce to design and operate critical raw materials projects – 133 (51 %) out of 

259 respondents agree or strongly agree; 28 (11 %) disagree or strongly disagree 

  Lack of available technologies to carry out critical raw materials projects in line with the required 
environmental  standards  –  91  (35  %)  out  of  259  respondents  agree  or  strongly  agree;  72  (28  %) 
disagree or strongly disagree 

The main problem about the difficulty to access private funding is the length and complexity of the permitting 
process (for exploration and extraction). Further explanation was given for some stakeholders, this relates to 
the  fact  that  the  absence  of  mining  activities  from  the  EU  taxonomy  makes  funding  and  investment 
unattractive.  

Permitting  emerges  as  a  major  bottleneck  in  the  open  public  consultation  among  stakeholders.  Permitting 
processes  are  perceived  as  “lengthy,  complex  and  can  be  easily  derailed  at  several  stages”1.  Hence, 
stakeholders  call  for  acceleration  of  these  processes,  “while  ensuring  a  coherent  level  of  sustainability 
performance”2. At the same time, there is a call for transparency and guidance3 in permitting processes, for 
instance in form of a common platform created by the EU, where member states could exchange experience 
and knowledge linked to permitting processes4.  

  Definition of critical raw materials 

On the definition of critical raw materials, stakeholders either propose new elements that should be added to 
the  list  of  critical raw  materials,  such  as  sylvinite,  sulphur5,  phosphate rock6  and  potassium7,  or  stress the 
general need for a better and clearer methods of criticality assessments. Several stakeholders also underline 
the need to take future demand into account8 as well as propose a review of the materials currently understood 
as “fundamental/strategic/essential/priority or other”9. 

Implementing  a  list  with  strategic  raw  materials  would  be  beneficial  for  future  decisions  according  to  the 
respondents. A specific list of raw materials of strategic importance for the EU (and thus deserving priority 
attention) would: 

  guide  investment  decisions  of  companies  and  financial  institutions  –  182  (70  %)  out  of  259 

 

respondents agree or strongly agree 
target public support at EU and national level – 182 (70 %) out of 259 respondents agree or strongly 
agree 

  Setting EU objectives for increasing domestic production capacity along different stages of the value 
chain  (exploration,  extraction,  refining,  recycling)  to  guide  national  and  European  efforts  (i.e.  in 
relation to the materials on the list) - 188 (73 %) out of 259 respondents agree or strongly agree 

  Setting critical raw materials objectives 

The list of raw materials of strategic importance for the EU can also be used to set EU objectives for increasing 
domestic production capacity along different stages of the value chain: 188 (73 %) out of 259 respondents 
agree or strongly agree with the statement.  

  Monitoring and risk assessment (and governance) 

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On monitoring, the answers are highly distributed. On the question of whether companies would benefit from 
public monitoring programmes, 146 (56 %) out of 259 respondents agree or strongly agree. Only 8 (3 %) 
respondents  disagree  or  strongly  disagree  on  that  matter.  The  answers  on  the  question  if  companies  lack 
sufficient information on supply risks for them to take preventive measures were distributed quite evenly: 29 
% agree or strongly agree, 25 % disagree or strongly disagree, 24 % are neutral and 22 % express no opinion. 
The answers on the matter if companies generally do not have in place contingency plans to deal with supply 
disruptions are more distributed as well: 34 % agree or strongly agree, 23 % disagree or strongly disagree 21 
% are neutral and 22 % express no opinion. However, regarding the competences of the member states, the 
answers are quite clear again: 

A.  Member State authorities do not have in  place sufficient monitoring mechanisms allowing them to 
assess supply risks and anticipate problems – 138 (53 %) out of 259 respondents agree or strongly 
agree 

B.  Member  State  authorities  do  not  sufficiently  cooperate  and  coordinate  in  monitoring  critical  raw 

materials supply chains – 150 (58 %) out of 259 respondents agree or strongly agree 

More cooperation between national authorities and EU-wide governance would also be beneficial for the EU’s 
value chain of CRM according to the respondents: 

  Enhanced cooperation between national authorities or agencies in charge of critical raw materials (data 
exchange, common monitoring, etc.) - 213 (82 %) out of 259 respondents agree or strongly agree 
  A dedicated EU-wide governance capacity tasked with monitoring actions and strengthening the EU 

value chain – 177 (68 %) out of 259 respondents agree or strongly agree 

  Better access for companies to monitoring information at EU or at national level to enable them to 
identify vulnerabilities in their supply chains – 182 (70 %) out of 259 respondents agree or strongly 
agree    

Regarding the subjects of monitoring, the respondents assess that CRM projects in the EU and supply and 
demand  developments  are  the  most  important  aspects  to  monitor  while  price  developments  are  the  least 
important ones: 

  Prices of critical raw materials – 125 (48 %) out of 259 respondents agree or strongly agree, 116 (45 

%) out of 259 respondents expressed a neutral or no opinion 

  Demand developments at national, European and global levels – 197 (76 %) out of 259 respondents 

agree or strongly agree 

  Supply  developments  of  critical  raw  materials  (including  forecasting)  -  195  (75  %)  out  of  259 

respondents agree or strongly agree 

  Trade flows of critical raw materials – 192 (74 %) out of 259 respondents agree or strongly agree 
  Progress of important critical raw materials projects in the EU – 204 (79 %) out of 259 respondents 

agree or strongly agree 

Many  respondents  would  welcome  an  early  warning  system  by  public  authorities;  stress  testing  supply 
disruptions is also seen positively, albeit slightly bit more reserved: 

  Early warnings by public authorities of imminent vulnerability of a supply chain – 162 (63 %) out of 

259 respondents agree or strongly agree 

  Periodic supply chain stress testing of selected critical raw materials at EU level to better anticipate 
supply chain disruptions – 134 (52 %) out of 259 respondents agree or strongly agree, 107 (41 %) out 
of 259 respondents expressed a neutral or no opinion 

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Several stakeholders agree that “while monitoring of prices and market fundamentals is important, monitoring 
must be accompanied with forecasting of future supply needs and capacities.”10 At the same time, there are 
opinions  that  the  public  authorities  and  member  states  should  conduct  monitoring  by  themselves  and 
communicate any potential disruptions in supply or anticipated issues to the concerned companies11. From the 
social point of view, stakeholders believe that monitoring and control should be implemented along the life 
cycle of the mines as well as several years after their closure in order to be credible12. The data and its quality 
are  considered  highly  important,  and  companies  call  for  implementation  of  mechanisms  that  would  allow 
access to reliable information from resource-rich countries13. Inputs from EU citizens also uncover a need for 
close monitoring of the amount of critical raw materials used as well as how much of these had been recycled14. 
Finally, suggestions for monitoring include gaining a better overview of the public perception of exploration 
activities in general but also in relation to specific projects15. 

  Strategic stocks 

Even though strategic stocks are generally welcome by the respondents, some answers were more reserved: 

  Provisions to increase strategic stocks of critical raw materials at EU, national or industry level – 129 
(50 %) out of 259 respondents agree or strongly agree, while 15 disagree or strongly disagree (10%) 

  105 (41 %) out of 259 respondents expressed a neutral or no opinion 

Regarding  the  organisation  of  strategic  stocks,  most  respondents  would  prefer  an  EU  level  guidance  on 
voluntary  stocks  at  national  level  (41  %).  Mandatory  stocks  are  the  least  favourable  options  among  the 
respondents (14 %). Only 9 (11 %) out of 81 business associations and company/business organisations that 
answered the question have a strategic stock.  

Coordination of stockpiling at an EU level is favoured as it is viewed as costly, and support from the EU is 
thus  welcomed16.  For  instance,  companies  from  the  PV  industry  perceive  stockpiling  as  a  major  financial 
burden in an already competitive industry environment17. Coordination is called for also in order to prevent 
supply shocks and mitigate geopolitical risks18. Any discriminatory practices are strongly discouraged, which 
is where management on an EU level could step in to ensure equal conditions and treatment among the member 
states19. Strategic stockpiling is thus often supported, but in a way in which it would not pose too great an 
administrative  and  financial  burden  for  companies20.  However,  there  are  also  opinions  favouring  strategic 
stockpiling being initiated at the national level on the basis of national security, while keeping the stockpiling 
on a voluntary basis21.  

  Company risk preparedness 

Business associations and company organisations also stated that within the last five years ‘strong volatility 
in prices’ was the biggest problem in relation with critical raw materials supply (35 %). Other problems are 
supply disruptions (27 %) or supply shortages (23 %). 

  Exploration efforts in the EU 

As regards to exploration efforts in the EU, the public consultation shows a range of different opinions among 
stakeholders. Overall, respondents point out the untapped potential of the European bedrock, with gaps in the 
availability of up-to-date and relevant geological data. Stakeholders highlight deficient national funding for 
exploration projects and an urgent need to speed up investments on modern and efficient technologies. While 
non-governmental  organisations  call  for  environmental  protection  and  community  consultation,  several 
business associations and companies call for financial or additional support from the EU to promote local 
exploration activities. The environmental and social concerns include a need for increased engagement with 
local communities, workers and other stakeholders in exploration and production processes22.  

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At the same time, many stakeholders stress the need for exploration and mining projects not to be carried out 
in sensitive or particularly sensitive endangered habitats23, and for NO-GO zones to be established24.  

On the other hand, businesses but also some EU citizens point on the need to educate the public “on the urgent 
need for local exploration and sourcing of critical raw materials, the environmental advantages of sourcing 
these materials in the EU's highly regulated jurisdictions as opposed to loosely monitored third countries”25. 
Increased action to counter misinformation and disinformation on the exploration and mining industries is 
called for, along with financial support and a clearer overview of available funding to be provided by the EU 
in the field of exploration26. Also, according to some stakeholders, ”deposits which are easy to access become 
depleted, and so exploration needs to be deeper and in more remote locations”27. 

  Support to the value chain 

The majority of the respondents agree that identifying strategic projects would be beneficial for financial and 
permitting decisions. 184 (71 %) out of  259 respondents agree or strongly agree that strategic projects and 
partnerships  outside  of  the  EU  should  also  benefit  from  de-risking  if  they  comply  with  social  and 
environmental standards and can contribute to secure EU supply. Furthermore, identifying strategic projects 
could be beneficial for the EU’s industry according to the answers received. 

 

Identifying Strategic Projects across the critical raw materials value chain with strong environmental 
and  social  performance  and  contributing  to  reducing  EU  dependencies  –  223  (86%)  out  of  259 
respondents agree or strongly agree 

  Ensuring that these Strategic Projects benefit from easier access to public and private finance – 193 

(75 %) out of 259 respondents agree or strongly agree 

o  Permitting procedures 

  Ensuring that these Strategic Projects benefit from streamlined and quicker permitting procedures – 

190 (73 %) out of 259 respondents agree or strongly agree 

Among the received answers, Spain and Sweden were mentioned the most in context of difficult permitting 
procedures. However, many respondents sent the exact same answer: ‘National permitting requirements are 
complicated to navigate, but they are fit for purpose for national or regional needs and should remain national 
competence’ 

o  Access to finance 

  Regarding  policy  options  in  order  to  facilitate  access  to  finances  for  CRM  projects  the  following 

answers were received: 

  Public support to bring together downstream users and project promoters to facilitate the conclusion 
of long-term supply contracts and offtake agreements – 143 (55 %) out of 259 respondents agree or 
strongly agree 

  Target existing EU funds that have the possibility to finance critical raw materials projects of particular 
strategic relevance identified under the future legislation – 185 (73 %) out of 259 respondents agree 
or strongly agree 
Increased financial support from national and European promotional banks for critical raw materials 
projects – 183 (71 %) out of 259 respondents agree or strongly agree 

 

  A dedicated financial platform to de-risk critical raw materials projects that meet certain requirements 
(e.g., high environmental and social standards, while contributing to EU supply) by blending private, 
national and EU funding – 175 (68 %) out of 259 respondents agree or strongly agree 

  Explore opportunities offered by the existing State aid rules for critical raw materials projects, such 
as Important Projects of Common European Interest, State aid Framework for research, development 
and  innovation,  Regional  Aid  Guidelines,  Guidelines  on  State  aid  for  Climate,  Environmental 

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protection and Energy or relevant State aid General Block Exemption Regulation provisions  – 168 
(65 %) out of 259 respondents agree or strongly agree 

  Support a level playing field to promote transparency and good governance with partner countries, 
aiming to gather sustainable and responsible investments and partnerships in the sector – 203 (78 %) 
out of 259 respondents agree or strongly agree 

Multiple stakeholders agree that “mining and quarrying extraction projects are highly capital intensive and, 
in some instances, would require priority financing from EU and national tools”28. They believe that EIB and 
EBRD should be more active in de-risking priority projects and in financing projects related to primary raw 
materials29. There are also requests of funds or tax rebates for companies that make an active effort to apply a 
circular approach in the design of their products with the aim of reducing the consumption of critical raw 
materials or replace some of them with non-critical ones30. At the same time, incentivising individuals and 
businesses  financially  is  highly  supported,  along  with  a  more  transparent  pricing  mechanism  and  a  liquid 
market for the content of purchased products31. Businesses also believe that ”market incentive and deterrent 
programs will encourage private investment in critical minerals projects”32. Responses also reflect the current 
energy crisis, causing high energy costs and posing a vital issue for the industries. Consequently, stakeholders 
ask for a higher financial support as "new investments need certainty that low carbon energy sources will be 
available  and affordable in  Europe”33.  Financial  de-risking  is suggested  to take  place  via  different public 
guarantees such as contracts for difference, public indemnities, green investment funding leveraged through 
the Sustainable Finance Taxonomy, but also the European Sovereignty Fund as a source of a sustainable pan-
European financial de-risking scheme34. In general, more clarity on public funding opportunities is desired35. 

  Targeted revisions of waste legislation 

Most respondents agree that the legislative situation within the EU should be improved in order to promote 
and incentivize secondary resources and circularity: 

  EU product legislation does not sufficiently incentivize the use of secondary raw materials in products 

– 152 (59 %) out of 259 respondents agree or strongly agree 

  EU waste legislation does not sufficiently incentivise the recovery and recycling of raw materials – 

171 (66 %) out of 259 respondents agree or strongly agree 

Regarding the challenges of shipping waste containing CRM, the following responses were received: 

  Shipments  of  waste  containing  critical  raw  materials  between  Member  States  are  difficult,  which 
limits possibilities for viable recycling projects – 136 (53 %) out of 259 respondents agree or strongly 
agree, 11 (4 %) out of 259 respondents disagree or strongly disagree 

  Export of waste containing critical raw materials increases the shortage of critical raw materials in the 
EU and limits potential for circularity – 156 (60 %) out of 259 respondents agree or strongly agree 

Most  respondents  would  also  welcome  targets  for  waste  operators  and  other  requirements  regarding 
sustainability, circularity and recycling. Overall, the responses are positive or neutral, with only few people 
disagreeing or strongly disagreeing with the statements. 

Regarding the development of targets for waste operators, the following responses were received: 

 

 

there  should  be  targets  for  the  recycling  efficiency  of  critical  raw  materials  from  different  waste 
streams (electronics, vehicles, etc.) - 142 (55 %) out of 259 respondents agree or strongly agree 
there should be targets for the material recovery of critical raw materials from different waste streams 
(electronics, vehicles, mining waste etc.) - 164 (63 %) out of 259 respondents agree or strongly agree 

Regarding recycling, the following answers were received: 

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  Requiring Member State to design waste management plans including specific measures to promote 
the  recovery  of  critical  raw  materials,  from  historical  mining  waste  –  176  (68  %)  out  of  259 
respondents agree or strongly agree 

  Setting design requirements for products containing critical raw materials to increase their ease of 

dismantling and recycling – 173 (67 %) out of 259 respondents agree or strongly agree 

  Setting minimum content of recycled critical raw materials in relevant products – 115 (44 %) out of 
259 respondents agree or strongly agree, 82 (32 %) out of 259 respondents expressed a neutral or no 
opinion 

  Setting design requirements for products containing critical raw materials to increase the length of 

product life – 129 (50 %) out of 259 respondents agree or strongly agree 

  Strengthening support for EU research and innovation funding on recycling and material recovery 
technologies for critical raw materials – 226 (87 %) out of 259 respondents agree or strongly agree 
  Strengthening exploration and documentation of critical raw materials in secondary deposits and waste 

streams – 201 (78 %) out of 259 respondents agree or strongly agree 

There is a call for waste management on both the European and member states level. While on the level of 
member states, some stakeholders call for “waste management plans with specific measures to promote the 
recovery  of  critical  raw  materials  from  historical  mining  waste,  mandatory  reporting,    and  setting  clear 
binding targets for waste operators handling critical raw materials from different waste streams”36, others 
propose an introduction of recycling obligations and fixed recycling targets applicable both within the EU and 
internationally37.  Some  major  bottlenecks  connected  to  waste  management  have  been  identified,  such  as 
transport of waste between different member states, which is considered to be a complex process leading to 
an administrative overburden, but also the collection and treatment of waste, where harmonised procedures 
are supposedly lacking38. The potential to identify critical raw materials from mining waste is also considered 
important and underexploited39, together with assistance to utilise products that would otherwise be waste40. 
Efforts to boost the recovery and recycling rate of the resource flows are called for, along with the mining 
waste valorisation, which should include consistent mapping of former mining waste and assessing legislative 
bottlenecks41. 

  Actions on standards for the CRM value chain 

Majority  of  stakeholders  agree  on  the  need  for  mining  in  the  EU  to  be  done  with  commitment  to,  and 
enforcement  of,  high  environmental  and  social  standards42  and,  in  general,  for  harmonised  and  consistent 
application of environmental and social standards across all member states and regions of the EU43. Multiple 
stakeholders  agree  that:  ”a  lack  of  technical  standards  is  not  the  challenge,  but  rather  the  quality  of  the 
standards and their transparency and enforcement. The EU, Member States and companies should embrace 
new  legislation  and  update  and  enforce  existing  EU  legislation  to  ensure  high  social  and  environmental 
standards”44.  Production  in  Europe  is  perceived  as  more  sustainable,  both  with  respect  to  social  and 
environmental standards, but stakeholders underline the need for investments to reach the desired volumes45. 
In addition, standards for recycling processes such as dismantling are also called for as binding  minimum 
standards  would  ensure  high-quality  recyclate  in the  recycling  and  related  value  chain  processes  46.  Some 
stakeholders  also  support  companies  to  engage  in  standardization  as,  in  their  opinion,  uniform  standards 
increase efficiency and contribute to greater security and trust47. 

  Sustainability of critical raw materials 

To ensure that critical raw materials meet European sustainability standards, respondents agree or strongly 
agree that CRM should be accompanied with information on the environmental footprint of producing those 
materials (186 (72 %) out of 259 respondents) and on the ethical sourcing of those materials (180 (70 %) out 
of 259 respondents). 

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A majority of stakeholders are committed to comply with the environmental and social protection rules in a 
strict  way.  Their  goals  include  an  improvement  of  sustainability  in  mining  projects,  as  well  as  a  social 
acceptance of the mining industry, value sharing, transparency and cooperation with the local society in the 
process48. They often perceive the improvement of the sustainability performance of European raw materials 
value chains as a vital part of their strategies49. As mentioned above, recycling efforts form a significant part 
of the sustainability goals of stakeholders, including proposals of EU wide campaigns on the importance of 
recycling  raw materials50. Many stakeholders also call for assurance that projects follow the due diligence 
requirements set out under the EU Corporate Sustainability Due Diligence Directive (CSDD)51. An overall 
call for exploring technologies which are linked to decarbonisation efforts and require less resources is very 
much present52. Stakeholders express the need for a better guidance from the EU when it comes to available 
sustainable substitutes, as one of them claims that ”the policies set forth would need to define an EU-based 
recycling  management  strategy  and  ensure  to  the  maximum  that  the  raw  materials  recycled  at  end  of life 
remain in the EU and can feed into the EU production processes again”53. 

  Skills along the CRM value chain 

On  skills,  many  respondents  suggest  an  exchange  programme  with  countries  that  have  the  knowledge  of 
mining and refining certain CRM (e.g. battery-grade lithium) in order to slowly build up knowledge within 
the EU. Another suggestion is to facilitate the visa and working permits for non-EU citizens as the current 
process  is  apparently  complex.  An  often-mentioned  aspect  is  about  increasing  the  knowledge  about  raw 
materials within the society, especially young people in order to attract the next generation to the industry of 
mining and metallurgy. Many respondents suggest more funding towards re-skilling programmes as well.  

The respondents were also asked to specify what policy  measures would have the highest impact on their 
organization.  Many  respondents  claim  that  a  faster  and  easier  permitting  process  and  a  better  access  to 
funding/financing  would  positively  impact  them  the  most.  Different  objectives  (set  incentives,  stop  waste 
exports, strengthen recycling capacities, mandatory recycling targets, etc.) were also mentioned in order to 
support circularity and recycling. A company called BE1 Geoconsulting AB also mentioned concerns about 
the critical raw materials list manipulating the market and thus having a negative impact. 

  EU external action  

Majority of respondents agree (39%) or strongly agree (13%) that the EU lacks a strategy for increasing the 
diversification  of  the  EU  industry  supplies  from  third  countries. The  feedback  to  the  question  on  whether 
potential to extract critical raw materials from primary sources in third countries is currently underexploited 
was non-conclusive, as 23% of respondents agree (9% strongly agree), but 19% were neutral and 19% did not 
know/no opinion and 15% disagree (7% strongly disagree). The problem seems to be more pronounced in 
global refining and processing capacities, where 34% agree and 14% strongly agree that global processing and 
refining  capacities  for  critical  raw  materials  are  currently  insufficient.  More  exchanges  and  cooperation 
between  Third  Countries  and  the  EU/Member  States  authorities  on  critical  raw  materials  (data  exchange, 
common monitoring, etc) are needed, as 39% agree and 15% strongly agree that they are not sufficient. 

When  asked  about  the  underlying  reasons  for  supply  chains  disturbances  and  supply  constraints  of  raw 
materials, respondents identified the following: increased geopolitical tensions (73% of all replies), volatile 
trading conditions (44%), untransparent market mechanisms (36%), insufficient global production (35%) and 
market manipulation (35%).  

In  terms  of  policy  suggestions,  45%  of  respondents  agree  and  26%  strongly  agree,  that  the  EU  should 
strengthen  the  ongoing  strategic  partnerships  on  critical  raw  materials  and  conclude  additional  ones  with 
resource rich third countries. Some stakeholders indicated that the EU should focus on new partnerships with 
regions that can deliver supply in the short terms (next 5+ years). 38% agree and 35% strongly agree that such 

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partnerships  should  rely  on  clearly  established  pillars,  such  as  integration  of  raw  materials  value  chains, 
research and innovation cooperation and alignment on environmental, social, and governance (ESG) criteria 
and  standards.  48%  agree  and  22%  strongly  agree  that  partnerships  on  raw  materials  value  chains  with 
developing countries need to include a pillar for capacity building, skills and training and one for deploying 
infrastructure.  

34%  agree  and  25%  strongly  agree  that  the  EU  should  diversify  its  global  supply  through  its  free  trade 
agreements  and  trade  relations.  Many  respondents  were  asking  for  faster  ratification  of  existing  trade 
agreements  (Mexico,  Chile,  Mercosur,  New  Zealand),  speedy  conclusion  of  ongoing  trade  negotiations 
(Australia, India and Indonesia). It is also important to work together with likeminded partners and initiatives, 
such as MSP were mentioned as good examples. Many respondents emphasised the importance of free trade 
agreements and strong chapters on raw materials. Since 2015, the EU proposes a dedicated chapter on Energy 
and Raw materials in all its negotiations and such chapters are being negotiated currently with Australia, India 
and Indonesia (finalised with Chile), however the EU would have to quickly conclude/start to apply those 
agreements and communicate more and better on these chapters, as only 14% agree and 5% strongly agree 
that these provisions (on investments, licensing and standardization) have the necessary disciplines to unlock 
the potential in opening access and encouraging investment in raw material, while 37% of respondents did not 
know/ had no opinion.  

Majority of respondents (36–49%) did not know/had no opinion on trade barriers, but from the ones that agreed 
or strongly agreed, export taxes (25% agree and 8% strongly agree) and export monopolies/qualified exporters 
lists  (28%  agree  and  9%  strongly  agree)  were  selected  as  having  the  most  trade  distortive  effects  on  EU 
business.  

In addition, a limited number of stakeholders were calling for strong trade defence instruments to tackle unfair 
trade practises, as well as emphasis on Economic, Social and corporate Governance (ESG) standards when 
sourcing raw materials abroad. Some stakeholders underlined the need for special attention to  EU circular 
economy.   

3. Questionnaires on “Permitting in the EU Member States” and on “Stockpiling of raw materials in 
the EU Member States” shared on the 28th of October with the Raw Materials Supply Group (RMSG) 

Permitting in the EU Member States 

Stakeholders offered several concrete proposals and avenues that could enrich the policies adopted in the CRM 
Act. In terms of permitting, some were of the opinion that “there is no need for special treatments in terms of 
permitting of certain selected projects, but the emphasis should rather be on encouraging each Member State 
to make general adjustments in the national permitting processes to make them more predictable, streamlined 
and efficient”54. They also shed light on how the current permitting processes work in different member states, 
often relying on approvals and permits provided by the municipal authorities. Some stakeholders report to be 
”often  frustrated“  by 
the  administrative  processes,  governmental  approvals  and  environmental 
permits/authorisation processes55. Also, permitting processes in Member States are perceived to be disparate 
as they depend on the different national legislation and the Member States  internal structures56. As mentioned 
in one of the responses, “EU legislation and in particular the transposition and case-by-case interpretation 
when it comes to mining projects should be equipped with guidance to address contradicting objectives and 
inconsistencies that could form an obstacle to permitting to ensure predictability and efficiency”57. Although 
not directly linked to the details of permitting processes, some Member States stress that the general opinion 
of the civil society is negative towards mining activities and operations, which affects mining regulations that 

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are being adopted, or at least their public perception58. Thus, there is a call for creation of conditions for the 
development of communication programmes in order to increase social mining acceptance59. 

Stockpiling of raw materials in the EU Member States 

There is a call for a better definition of what stockpiling means and whether it refers to produced raw materials 
or also strategic reserves still to be mined60. At the same time, there are doubts concerning the financial aspects 
of  stockpiling,  whether  in  relation  to  investors  and  the  assurance  that  they  would  not  lose  income  due  to 
stockpiling,  or  related  to the  whole  structure  of  stockpiling  managed  at  the  EU  level  and  the  implications 
relevant for the Member States61. As in the case of permitting, stakeholders including Member States provided 
an insight into how stockpiling is organised locally, also informing that some of them currently do not have 
any stockpiling systems established62. In some cases, stockpiling (in general, not necessarily for metals and 
minerals) is under supervision of a government body or an agency63. Stakeholders also provided either concrete 
lists of raw materials that should in their opinion be stockpiled or labeled all critical raw materials as necessary 
to be stockpiled at the EU level64. Some Member States support the idea of stockpiling being managed by a 
dedicated EU body65. 

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ANNEX 3: WHO IS AFFECTED AND HOW? 

Practical implications of the initiative 

Businesses 

As detailed above, businesses would be subjected to limited information requirements, notably contributing 
to the monitoring capacity (only for large companies operating in CRM value chain) and providing information 
on  the  critical  raw  materials  content  of  EEE  put  onto  the  market  (as  a  new  category  within  the  existing 
reporting  of  EEE  producers)  and  of  extractive  waste  generated  (only  for  operators  of  currently  operating 
extractive waste sites). Other measures comprised in the preferred option only include rules for how claims on 
sustainability and environmental footprint more specifically should be made, thus imposing higher costs on 
companies when they choose to make such claims, but in doing this also increases the trust of customers, 
which would ultimately benefit businesses (especially the most sustainable ones). 

In terms of benefits, the measures proposed would improve substantially the information basis for companies 
to manage their critical raw materials supply risks, and therefore likely save costs and improve businesses’ 
competitiveness in case of a disruption. Additional benefits to companies, notably a consulting capacity for 
critical raw materials risks and the possibility to join a common purchasing infrastructure, would only occur 
under option 3, as they rely on the existence of a well-equipped operational capacity. 

Also, the proposed measures would streamline permitting, put in place a Fund to de-risk investments, and thus 
reduce  significantly  the  project  development  cost  of  projects  along  the  value  chain  –  creating  economic 
opportunities that businesses can benefit from. 

In addition, companies further down the value chain, operating in sectors such as renewable energy, digital 
industries, defence and aerospace or health, would also benefit from the availability of the materials used in 
the technologies they rely on. 

Citizens 

Citizens are not directly affected by most of the proposed measures, with the exception being on recycling and 
sustainability. For the former, they would be incentivised through take-back schemes for small electronics, 
and potential other measures proposed in Member States’ CRM recovery strategies, to contribute to collection 
and thus an improved recycling value chain; for the former, they would benefit from better information on the 
sustainability of critical raw materials included in their products, and through their consumer choices, could 
drive  change  towards  more  sustainability.  Indirectly,  they  would  benefit  from  the  added  supply  security 
enabling the development of ecosystems, notably for renewable energy but also for other ecosystems that are 
at the backbone of our economy. 

Member States 

Member States will play an important role in the implementation of this initiative. Under the preferred option, 
they will be part of the governance structure, take part in the assessment and selection of Strategic Projects, 
and  contribute  to  the  development  of  a  stronger  monitoring  capacity,  while  taking  part  in  the  EU  level 
coordination of stockpiling. They would have to develop incentives for companies to diversify their supply or 
stockpile of strategic raw materials. In addition, they would be required to invest resources into exploration 
and develop strategies to recover critical raw materials from waste.  

Commission 

Under  the  preferred  option,  the  Commission  will  have  to  develop  a  number  of  implementing  rules  and 
coordinate  and  support  the  governance  structure,  with  notably  higher  capacity  in  monitoring,  stockpiling 

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coordination, etc. As a results, this impact assessment provides an estimate of how many resources would be 
needed  for  the  development  of  the  governance  structure,  responsible  for  monitoring  critical  raw  materials 
market and coordinating strategic stocks, data on exploration and the monitoring of Strategic Projects. How 
such resources would be allocated is left to subsequent decisions made by the Commission. 

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Summary of costs and benefits 

I. Overview of Benefits (total for all provisions) – Preferred Option 
Description 
Direct benefits 
Monitoring/  strategic  stocks, 
companies’ risk preparedness 

Amount 

Not  quantifiable:  but  access  to  information  and  preparedness 
solutions.  

Exploration 

Negligeable: <10 k€ that can be saved. 

Strategic Projects 

This  assessment  considers  that  at  least  3840  direct  jobs  (lowest 
estimate)  could  be  created  per  year  through  the  development  of 
Strategic Projects. 

Access to finance  

Not  quantifiable,  but  benefits  generated  by  improved  access  to 
finance for producers along CRM value chain. 

Permitting provisions 

Provisions 
recycling and waste 

on 

circularity: 

Not quantifiable but benefits generated by time-gains, investment 
stability, etc. 
Permitting delays can put the whole operations of a company on 
pause for years depending on the waiting time. In extreme cases, 
the  company  is  dissolved  before  the  permit  issuance  due  to  its 
inability to sustain the costs of waiting. 
Framework for MS to work on circularity, notably on collection, 
public  procurement  and  R&I,  which  should  increase  circularity, 

Comments 

Those measures would enable the companies to be more prepared 
ahead of any supply challenge that might occur in the CRM value 
chain and to better resist to them. It relates to the cost of not acting, 
which is very high if and when a supply disruption materialises. 
The  main  benefit  of  exploration  at  national  level  is  to  put  in 
evidence metal anomalies that will encourage local exploration by 
mining  operators  and  will  trickle  down  to  support  further 
investment down the value chain. 

De-risking of financial investment would also enable the uptakes 
by further private investment sources as well. 
The  overall  benefits  of  this  pillar  will  however  be  directly 
dependent on the size of the funds that can be made available. 
Benefits  of  streamlined  permitting  notably  for  companies 
developing a Strategic Projects 

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Provisions on standards 

Provisions  on  environmental 
footprint 

Indirect benefits 
Monitoring/stockpiling/compa
nies preparedness 
Support to the value chain 

with  all  its  environmental  and  security  benefits;  the  amended 
Extractive  Waste  Directive  would  provide  important  access  to 
information  on  CRM  recovery  potential  from  extractive  waste 
sites,  which  should  encourage  the  opening  of  new  “re-mining” 
projects   
Standards  to  guide  processes  of  activities  along  the  CRM  value 
chain.  Such  standards  would  develop  the  competitiveness  of  the 
EU CRM industry by supporting the development of more efficient 
and sustainable processes. 
The competitiveness of companies that sell or produce CRM with 
in  a  more  sustainable  way  would  increase  by  comparative 
advantage. 
These  benefits  would  trickle  down  the  value  chain:  downstream 
users  will be able  to  use  information  on the  sustainability  of  the 
CRM they purchase to make green claims about their products that 
contain them. 
Customers  will  directly  benefit  from  this  increased  competition 
fostered by the sustainability of the products. 

Contribution  to  the  stability  of  the  value  chain  of  critical  and 
strategic raw materials 
Indirect benefits of providing security of supply for the ecosystems 
that rely on technologies of which strategic raw materials are a part 
of, needed for green and digital transitions as well as resilience. 
These positive effects would then trickle further down the entire 
economy. 

Contribution  to  the  stability  of  the  value  chain  of  critical  and 
strategic raw materials 
These measures would contribute to achieving the EU Green Deal 
objectives, amongst other objectives of the digital transition or of 
resilience. 

Administrative cost savings related to the ‘one in, one out’ approach* 
(direct/indirect) 

Permitting  streamlining  for  Strategic  Projects  will  substantially 
reduce  the  administrative  burden  on  companies  benefiting  from 
those measures.  

It is not possible to quantify these benefits, as they differ from MS 
to MS and company to company.  

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Monitoring  measures  (e.g.  with  the  creation  of  a  monitoring 
dashboard,  available  digitally  to  all  companies)  will  lower’s 
companies  administrative  costs  of  gathering  data,  including  in 
interaction  with  public  authorities,  and  building  their  own 
monitoring  systems  without  a  common  basic  information  offer 
from the public system set up under pillar C. 
The  creation  of  a  publicly  and  digitally  accessible  database  of 
closed extractive waste sites, including valuable information from 
permitting files and geochemical campaigns, will allow companies 
interested in recovering CRMs from these sites, to directly access 
this information instead of having to correspond with authorities 
with  uncertainty  surrounding  access  to  confidential  information 
etc. 

No  clear  monetary  equivalent,  but  certainly  an  important  cost 
saving for companies. 

The  monetary  equivalent  of  these  benefits  is  not  possible  to 
quantify without knowing the amount of information that MS will 
include  and  the  number  of  companies  interested  in  such 
operations,  but  it  can  be  considered  a  significant  reduction  in 
administrative burden. 

(1) Estimates are gross values relative to the baseline for the preferred option as a whole (i.e. the impact of individual actions/obligations of the preferred option are 
aggregated together); (2) Please indicate which stakeholder group is the main recipient of the benefit in the comment section;(3) For reductions in regulatory costs, 
please describe details as to how the saving arises (e.g. reductions in adjustment costs, administrative costs, regulatory charges, enforcement costs, etc.;); (4) Cost 
savings related to the ’one in, one out’ approach are detailed in Tool #58 and #59 of the ‘better regulation’ toolbox. * if relevant 

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II. Overview of costs – Preferred option  
Businesses  
One-off  
 EUR  3.75  –  10 
million 
for 
certification 
related  to  general 
sustainability 
claims  

of 
Set 
measures 
in  policy 
option 2 

Direct 
adjustment 
costs  

Recurrent  
 EUR  1  million 
per  year  in  the 
EU 
for 
conducting  risk 
assessment 
(stress  test)  for 
companies 
using  strategic 
raw materials in 
the 
manufacturing 
of 
technologies 

strategic 

Recurrent  
- 1/4 FTE per year 
for  reporting  on 
the  state  of  CRM 
projects  on  their 
territories; 
- 2 FTEs per year 
for  participation 
to the governance 
structure; 
- 1/4 FTE per year 
the 
for 
of 
coordination 
stocks; 
strategic 
-  1/4  FTE 
to 
contribute  to  the 
of 
development 
and 
EU-targets 
them; 
report  on 

Administrations (Member States) 
One-off  
 - exploration: 10 
FTE  for  aerial 
geophysics 
(already 
in 
operative 
some  MS)  ;  10 
FTE 
for 
geochemical 
(also 
survey 
already operative 
in  some  MS)  ; 
Data 
reprocessing  and 
predictivity 
maps: 1 unit of 5 
FTE.  (Some  MS 
already 
have 
capacity, 
those 
notably 
for 
geochemical 
survey) 
-  182,4  Million 
EUR to cover the 
whole  EU 
for 
exploration 
(dependent  upon 
existing 
MS 

 -  1  FTE  per 
Member  State  to 
and 
develop 
the 
implement 
national 
circularity 
strategy (recurrent 
costs); 

For the Commission 
One-off  

be 

be 

split 

split 

Recurrent  
Around 31 FTEs for the Commission, that 
would 
by: 
- 2 FTEs for ensuring the secretariat of the 
governance structure, in addition to EUR 
75.000  per  year  of  organisational  costs. 
- 17 FTEs for implementing monitoring, 
data gathering and risks assessment tasks, 
based  on  similar  tasks  performed  by 
existing units in the Commission), which 
can 
as: 
o    10  FTEs  for  market  monitoring; 
o  1  FTE  for  the  management  of  studies 
and 
contracts; 
o 1 FTE for the building of a data set on 
projects 
the  coordination  of 
o  5  FTEs  for 
information 
States 
- 3 FTEs for the coordination of national 
stockpiles 
the 
information 
development of guidance when possible; 
- 2 FTEs to coordinate the submission of 
national 
activities; 
exploration 
-  1  FTE  to  support  the  board  in  the 
selection 
Projects; 
-  3  FTEs  for  assessing  the  suitability  of 
environmental 
developing 
calculation  methods  and  monitor  the 

from  Member 

footprint, 

Strategic 

and 

of 

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the 

measures; 
of 
to  enforce  actions  on 
prepare 

application 
-  2  FTEs 
standardisation 
and 
standardisation requests.  
-  1  FTE  to  ensure  the  enforcement  of 
Member  States  obligation  under 
the 
Extractive Waste Directive.   

- 3 FTEs to develop the methodology and 
run 
exercise 
data-collection 
underlying the national recycling targets. 

the 

- Additional FTEs 
(not quantified) to 
enforce 
environmental 
footprint 
obligations. 

and 
capacity 
surface  covered) 
- 3-4 FTE per MS 
the 
create 
to 
of 
database 
closed 
and 
abandoned waste 
sites  and  fill  it 
with  data  from 
permitting 
files 
and  geochemical 
campaigns 

Direct 
administrative 
costs  

 EUR 700 000 for 
existing  mining 
sites  of  reporting 
available 
on 
information 
raw 
critical 
materials  content 
of  waste  streams 
and  composition 
of the waste 
 14.55  million  for 
studies underlying 
environmental 
footprint 
claims 
(total  figures  for 
all 
companies 
expected  to  make 

Administrative 
of 
cost 
reporting 
for 
large 
companies 
operating  along 
the 
strategic 
raw  materials 
value  chain  [up 
to  EUR  49.000 
for  the  whole 
the 
EU 
if 
is 
information 
not 
already 
available] 

2  FTE  per  MS 
(reporting) 
- 1/4 FTE per MS 
the 
on 
of 
transmission 
on 
information 
strategic 
stockpiles 
-  1/4  FTE  for  the 
reporting  of  the 
Commission  on 
the  development 
of  incentives  for 
companies' 
resilience 
-  1/2  FTE  for  the 
classification  and 

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the 
to 
reporting 
Commission 
of 
obligations  under 
exploration 

Administrative 
of 
costs 
reporting 
for 
large 
companies 
using  Strategic 
raw  materials 
(on  stress  tests) 
–  EUR  38.000 
pear year 

 EUR 1 million 

-  1  FTE  to  increase  enforcement  of 
Member  State  obligations  under 
the 
Extractive Waste Directive  

claims) 

Direct 
regulatory fees 
and charges  
Direct 
enforcement 
costs  
Indirect costs  

Direct 
adjustment 
costs   
Indirect 
adjustment 
costs  
Administrative 
costs 
(for 
offsetting)  

Costs related to the ‘one in, one out’ approach  
EUR  3.75  –  10 
Total    
million 
for 
certification 

EUR 
million  

15,25 

87.000 

 EUR 
per year 

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III. Overview of relevant Sustainable Development Goals – Preferred Option(s) (to adapt, this is an example) 
Relevant SDG 
SDG  #7  Affordable  and  clean  energy, 
SDG #13 Climate action 

Comments 

Expected progress towards the Goal 
Enable the development of clean energy that relies 
on  critical  raw  materials  (such  as  wind  turbines, 
batteries  and  electronic  motors,  etc),  thereby 
reducing  the  impact  on  climate.  It  will  also 
contribute to  incentivising higher sustainability of 
CRM production through  environmental footprint. 
The support for the CRM value chain is expected to 
employment, 
leverage  positive 
reskilling and upskilling, particularly in former and 
current  industrial  regions.  This  will  also  have 
positive impacts over the whole value chain. 
The  proposal  is  expected  to  strengthen  industrial 
resilience,  whether  by  better  preparing  companies 
or by directly increasing the availability of supply 
of CRM that the industry needs. 

impacts  on 

 SDG  #8  Decent  work  and  economic 
growth 

SDG  #9 
infrastructure 

Industry, 

innovation  and 

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ANNEX 4: ANALYTICAL METHODS  

The  analysis  contained  in  this  Impact  Assessment  builds  on  data  collected  from  desk  research 
(academic studies, economic reports, media items, existing impact assessment reports such as for 
the SMEI proposal), input from stakeholder outreach activities and Commission officials’ expert 
knowledge. Information has been analysed against the main problems identified for the purpose of 
this initiative, the problem drivers as well as stakeholder positions. Whenever possible, the Impact 
Assessment provides a quantitative analysis of benefits and costs relating to the main economic 
and  social  impacts.  The  cost/benefit  analysis,  however,  is  not  fully  comprehensive  due  to 
significant data gaps. The evidence base of the report is limited due to the short time available to 
request information beyond questions identified early on in the call for evidence and the public 
consultation,  and  the  lack  of  a  supporting  study.  The  views  of  stakeholders  are  transparently 
reflected in the Impact Assessment. It should be noted that the aim of this assessment is to provide 
ranges of the magnitude of potential impacts generated by each policy option, rather than exact 
monetisation.  

Impacts section 

Pillar C 

Cost of governance 

The cost for running the governance structure (pillar C), and particularly the board, are assessed 
based on the standard budget for a meeting for a meeting with 27 MS experts of EUR 15 000, as 
developed  in  the  SMEI  impact  assessment.  The  cost  for  the  governance  structure  to  develop 
monitoring capacities (pillar C.1) are assessed in comparison with the size of HERA.2 Intelligence 
Gathering,  Analysis  and  Innovation  Unit,  which  performs  similar  tasks  as  the  one  proposed  in 
option 2.  

Cost of information requirements 

The costs for the reporting obligations on companies (monitoring, pillar C.1) over 250 employees 
is  based  on  day  spent  by  one  employee  per  company,  twice  a  year;  the  number  of  companies 
concerned is assessed based on the number of companies active in the EU in the extractive sector 
for the mining of metal, and non-ferrous metal ores, as well as the manufacturing of weapons and 
ammunition  (given  the  high  CRM  content  of  their  productions)  which  equals  to  around  64 
companies in 2020 in the EU. The total cost of information requirement is assessed based on the 
reported cost of a manager (OIOO tariffs – EU average of 47,78e/hour for ISCO 1) in a company 
operating in the sector. It is assumed, based on internal analysis that the time spent on reporting is 
of  an  average  of  1  day.  Based  on  the  administrative  burden  calculator,  is  of  EUR  764*64 
companies= EUR 48 896 for a reporting twice per year for all concerned companies in the EU 
(rounded up at EUR 49 000). 

Cost of company risk preparedness 

The costs induced on companies for their risk preparedness do not consider obligations linked to 
building  of  strategic  stocks  or  of  diversification,  given  that  companies  retain  the  possibility  of 
explaining why they are not able to comply with the obligation. 

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The costs therefore concern the conduct of a stress test to ensure the resilience of their value chains, 
for those who use strategic raw materials as an input for the manufacturing of technologies in key 
sectors (hence excluding the extractive industry but includes the processing industry). The NACE 
costs concern for this assessment are: 

- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 

24.41 - Precious metals production 
24.42 - Aluminium production 
24.44 - Copper production 
24.45 - Other non-ferrous metal production  
26.11 - Manufacture of electronic components  
27.11 - Manufacture of electric motors, generators and transformers 
27.12 - Manufacture of electricity distribution and control apparatus 
27.20 - Manufacture of batteries and accumulators 
28.11 - Manufacture of engines and turbines, except aircraft, vehicle and cycle engines 
30.30 - Manufacture of air and spacecraft and related machinery 
30.40 - Manufacture of military fighting vehicles 

Eurostat simulation then provides for around 193 companies corresponding to those NACE code 
(up  to  one  decimal  place)  with  above  250  employees  in  2021  in  the  EU  (Statistics  |  Eurostat 
(europa.eu))  

If those companies do not use any of the strategic raw materials in their consumption, they would 
be exempted from any obligation under those pillars. 

Adjustment costs for companies to operate a similar risk management system could amount to EUR 
5/000 for large companies (according to the CCSD impact assessment142) Based on that, we could 
take the following assumptions for the whole single market: EUR 5.000 X 193 = EUR 965.000 per 
year in the EU (rounded up at EUR 1 million). 

Administrative costs for companies to report on such a risk management system to their Member 
States every 2 years would be the following: 193 x 8 hours of work x 47.8 (average hourly wage 
for senior officials and managers) = EUR 75.347 every two years, EUR 37.673 per year in the EU 
(rounded up at EUR 38.000). 

Pillar D 

Cost for exploration obligations 

The  figures  developed  as  regards  the  costs  induced  on  Member  States  by  the  exploration 
obligations rely  on  the  inside  analysis  of the  Commission  based  on the  assessment  of  costs  of 
ongoing projects (in the EU or world bank projects) which were expanded to cover the EU as a 
whole. 

Pillar E  

For the  assessment  impacts  related  to the  support to  the  value chain  (pillar  G), the  following 
assumptions were made: 

Number of Strategic Projects (SPs) 

142 SWD(2022) 42 final 

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The number of SPs used for the assessment of impacts was based on estimation of the number of 
strategic materials for which projects are needed, the targets for the different value chain stages 
included under Pillar B, and the average contribution of a project to meeting those targets: 

-  Based on current information on projected supply-demand gaps and the needs of strategic 
sectors, the number of strategic raw materials (SRM) is, from now until 2030, estimated to 
be within the 10-15 range; 

-  Pillar  B  provides  that  the  Board  will  propose  to  the  Commission  EU  capacity  targets 
(expressed percentage of EU needs covered by EU capacities) per SRM and stage of the 
value chain. For this calculation, it is assumed that those targets will have a 2030 horizon 
and will on average require a capacity increase of 20 percentage points (given the targets 
of 10% for extraction and recycling capacity, the target; 

-  To estimate the average contribution of SPs to this increase, we took lithium as a proxy.143 
The expected annual capacity of lithium extraction projects can be up to 20,000 tonnes 
lithium carbonate equivalent (LCE), which represents roughly 5% of EU needs in 2030. 
Oftentimes, an extraction project is linked to a single refining project. From a permitting 
point of view these are then viewed as two distinct projects. Based on this, it is assumed 
that a single SP will on average contribute 5 percentage point in terms of capacity. 

Based on these estimations, it is therefore assumed that per material we need 4 projects per step of 
the value chain to realise a 20 percentage points increase. Taking into account three steps of the 
value chain (i.e. extraction (including mineral processing), refining and recycling), this equal 12 
projects per material). The overall amount of SPs is estimated at 120-180 (or 24-36 per year, if the 
proposal enters into force in 2025).  

Benefits of Strategic Projects 

Based on planned or currently existing facilities in the EU (Spain, Finland, Sweden) and equivalent 
economies worldwide (i.e., US - Bureau of Labor Statistics), it is expected that: 

-Each  strategic  project  in  extraction  will  bring  individually  200  new  jobs  with  an  employment 
multiplier of 4.7 for indirect jobs (supplier jobs and induced jobs). 

-Each strategic project in refining will bring 180 new jobs with an employment multiplier of 4.8 
for indirect jobs. 

-Each strategic project in recycling will bring 100 jobs with an employment multiplier of 4.8 for 
indirect jobs 

The overall impact of strategic projects on employment would be ranging from 110 000 to 165 000 
direct and indirect jobs. 

For  direct  jobs,  the  lower  estimate  that  is  proposed  is:  24  projects  per  year  (see  above)  X 
(200+180+100)/3 = 3 840 potential direct job per year  – assuming the projects would not have 
happened without dedicated support. However, it is worth noting that these projects might help to 

143 Lithium is one of the materials with highest expected demand increases in absolute and relative terms, and levels of 
contribution of single projects can be assumed to be relatively and safely taking as a proxy. 

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secure or develop a significant number of employments in the downstream industry. The last Raw 
Material  Scoreboard  of  the  European  Commission  (2020)  indicates  the  mining  and  quarrying 
industry in the EU represents 280 000 employments (for a 4,8 B€ added value) but help to support 
2 million employments and EUR 120 billion of added value in the relevant raw manufacturing 
sector. 

Pillar H 

For  the  costs  of  the  measures  related  to  the  environmental  footprint  (pillar  H)  the  following 
assumptions were made: 

Number of relevant environmental profiles 

For the number of CRMs with separate environmental profiles (‘types’) potentially sold on the EU 
market, we made assumptions based on the example of the global market for lithium. It is assumed 
that  all  types  are  potentially  sold  in  the  EU.  There  are  currently  less  than  20  active  mining 
operations for lithium.144 Given the sharp increase in demand for lithium and ongoing exploration, 
the amount of active mines is expected to increase at least 5-fold toward 2030 to roughly 100 active 
operations  (also  including  new  recycling  operations).145  Given  that  primary  lithium  originating 
from a specific operation is usually going to the same refinery (often attached to the site) and that 
there are generally less refineries than active mines, it can be assumed that there as many relevant 
types as there are mining operations.  

In the absence of detailed information per materials, this number is taken as a proxy for other CRMs 
such as REEs and PGMs with strategic applications (both of which currently have a lower amount 
of operations than lithium), for which the number of operations is also expected to grow sharply 
from a low base. Assuming that the Commission will, towards 2030, develop 10 sets of calculation 
rules (through implementing act) for different CRMs (NB: a single CRM might require different 
calculation rules for different sub-categories e.g. neodymium is a sub-category of REE), this means 
that there would be roughly 1000 relevant profiles.    

Cost of using a recognised certification scheme 

There is no statistical info available for the amount of environmental claims made in a B2B context. 
For the share of companies making B2B claims for CRMs, we therefore developed an assumption 
starting  from  a  survey  with  SMEs  that  included  environmental  information  provided  in  a  B2B 
context146. Among the SMEs responding to the survey (600), 20% declared to communicate on 
environmental  performance  in  a  B2B  context.  Assuming  that  the  share  of  large  companies 
communicating  in  a  B2B context is  higher,  we assume  that  25%  of  such  companies  will  make 
environmental claims. Taking a conservative approach, it is assumed all of these claims include 
also  general  claims.  Based  on  the  number  of  relevant  profiles,  this  translates  into  250  relevant 
claims.  

Based  on  the  only  currently  available  price  example147,  certification  for  the  mining  stage  is 
expected to be a one-off cost of between EUR 10.000 and 30.000, depending on the size of the 
operation. For some of the CRMs that are placed on the market with a general claim, there will 
have been other steps involved, for example processing or refining. Considering that many more 

144 Mineral Commodity Summaries 2022 - Lithium (usgs.gov), U.S. Geological Survey, Mineral Commodity 
Summaries, January 2022. 
145 See e.g. Almost 400 new mines needed to meet future EV battery demand, data finds - TechInformed for a more 
conservative.  
146 Assessment of different communication vehicles for providing Environmental Footprint information, London School 
of Economics for DG Environment, 2018.  
147 See IRMA Certification Fee Policy_May2021 (responsiblemining.net). 

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potential impacts and a larger land area is associated with mining, the additional cost of additional 
value chain stages in the certification is assumed to be 50% compared to only considering mining. 
The cost is therefore assumed at between EUR 15.000 and 40.000. It is conservatively assumed 
that  all  CRMs  for  which  general  claims  are  made  are  processed  materials.  The  cost  associated 
would therefore be in the range of EUR 3.75 – 10 million.    

Cost of conducting a PEF study based on harmonised calculation rules 

The  harmonised  calculation  rules  to  be  provided  would  resemble  closely  the  function  of  PEF 
Category Rules (PEFCR) and the cost can thus be assumed to be the same at the cost of conducting 
a PEF study based on a PEFCR148. Considering the assumptions above regarding the amount of 
active  operation and integration  of  refining,  it  is  assumed  that  most  companies will  a  single  or 
several PEF studies, and potential economies of scale are not taken into account.   

Expert cost: consultants / experts are charging on average EUR 15.000 for a single PEF study. 
This cost is identical whether the company uses in-house expertise or a contractor. If the life cycle 
model of the applicable representative product (RP) is available in a simple-to-use software, this 
halves costs, as there is no need to adjust the otherwise available RP model in a generic life cycle 
assessment (LCA). This results in more efficient data input and less need for senior expertise.  

Flanking measures such as making availability of simplified calculation tools can reduce the cost 
for a single study in line with the license cost (known license costs in the range of EUR 1.500 – 
2.000, unless the tools would be used as part of an external expert support contract and then be 
factored in substantially cheaper, as the license would be used by the expert for many studies per 
year – see more below). Taking a conservative approach, we assume a tool is not available. 

When assessing related expert costs, we consider that license fees are paid per user and for a year 
(EUR 5.000 one-time cost); and the number of studies that the expert can do in a year using that 
license, with an expert cost of €1,000/man-day. The cost per use is on average EUR 50 per study. 
This results in overall study expert cost of EUR 7.550 (€15.000*50%+€50). 

Data collection costs (both in-house and secondary data from data suppliers) are estimated based 
on the expected effort of data collection. This is estimated to take approximately 5 person-days, 
i.e. EUR 5.000 for a single PEF study. The costs for collection of data might be further cut down 
through  an  automatic  collection  system;  we  have  however  no  available  data  in  this  regard. 
Furthermore,  the  expertise  might  vary  depending  on  the  data  to  be  gathered.  We  are  using  a 
conservative estimate, which might be over-estimated.  

Based on information from several consultants, the cost of supplier-specific datasets or datasets for 
missing materials is on average EUR 5.000 per dataset. As to the secondary EF datasets, these are 
assumed to be free of charge (same as currently and under all sub-options). The data collection 
costs are therefore estimated to EUR 5,000 per study. 

Verification costs for a single-product PEF can be estimated at approximately €2,000, based on 
input from practitioners. 

The total cost for conducting a PEF study based on a PEFCR for a single CRM type is therefore 
estimated to EUR 14,550 (€7.550+€5.000+€2.000).  

The cost associated would therefore be EUR 14.55 million (1000 *14.550).    

148 The text is closely based on DG ENV analysis and assumption in the context of the green claims initiative. 

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Relative burden on footprint cost for platinum149  

The EU demand for platinum is 64 tonnes compared to world production of 178 tonnes (roughly 
36%). As the global market value of this production is 5.8 billion, the EU market value is estimated 
at 0.36 x 5.8 billion, I.e. roughly EUR 2.1 billion.  

As the cost for 10 CRMs was estimated above at 14.55 million, the assumed percentage of the 
footprint cost is 2.1 billion / 1.45 million, equalling roughly 0.07%. 

ANNEX 5: OVERVIEW OF POLICY APPROACHES 

9.1.1. 

Pillar A – Defining critical and strategic raw materials 

At  EU  level,  the  Commission  currently  performs  the  criticality  assessment  (described  in  detail 
below)  and  conducts  a foresight  exercise  on  critical raw  materials  used in strategic  sectors  and 
technologies.  These  exercises  and the  data  provided serve  to  raise  awareness  for  raw  materials 
supply risks among companies, the research community and the wider public, and the list of critical 
raw materials is used in the Commission’s policymaking process, notably to prioritise support to 
research and innovation under Horizon Europe and to direct international engagement, including 
in the negotiation of free trade agreements. However, the list of critical raw materials currently 
does  not  have  legal  status  and  only  limited  implications.  The  foresight  exercise  meanwhile  is 
currently limited to projecting demand for critical raw materials in strategic sectors and does not 
allow to identify which raw materials may become critical in the future or otherwise pose risks not 
reflected in the backward-looking criticality assessment; it also currently does not have any legal 
or policy implications.   

9.1.1.1. 

Approach  1:  Legal  definition  of  critical  raw  materials,  based  on  the 
current  criticality  assessment  methodology  and  covering  the  whole  EU 
economy  

This approach would consist in defining the scope of the regulation and all its measures based on 
the current criticality assessment methodology. The methodology covers a wide range of economic 
sectors and would continue to rely on the criteria:  

 

 

economic importance (EI), based on the value added of corresponding EU manufacturing 
sectors and corrected by a substitution index; and  
supply risk (SR), based on supply concentration (at global and EU level, weighted by a 
governance performance index) corrected by recycling and substitution parameters.  

Raw materials exceeding the thresholds set for both criteria are considered at high risk of supply 
disruption (based on their supply concentration, weighted with governance indicators) and of high 
economic importance, and would therefore be defined as critical.  

The data would continue to be provided by an established process within the European Commission 
(GROW, JRC), using historical and stakeholder-validated data (from the last 5 available years) 
from official statistics and data providers. The criticality assessment has served as a basis for the 
EU List of critical raw materials updated every 3 years since 2011.  

149 Figures taken from the Commission factsheet on criticality for the 2020 CRM list, p. 415.  

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In the past, the lists’ relevance has proven to be valid for the following 3-5 years and has been a 
useful tool for directing investment across the EU, raising awareness of strategic dependencies in 
industry, informing the EU trade policy and focusing international partners on our needs, but also 
in  development  of  the  EU  legislation.  The  assessment  vastly  improved  the  Commission’s 
intelligence on a wide range of raw materials and informed general and professional public. 

The  Commission  has  performed  the  5th  criticality  assessment  for  the  EU  on  87  screened  raw 
materials.  Compared to the list of 30 CRMs in 2020, the 2023 list qualifies 34 CRMs as critical, 
moving  above  the  threshold:  Arsenic,  Feldspar,  Helium,  Manganese,  Copper  and  Nickel  while 
natural rubber and indium move out of the list. From the new screened materials, none of them 
have been considered critical. Approach 2: Legal definition of only strategic raw materials based 
on  multi-criteria  analysis  including  supply  and  demand  foresight  and  relevance  for  strategic 
applications. 

9.1.1.2. 

Approach  2:  Legal  definition  of  only  strategic  raw  materials  based  on 
multi-criteria analysis including supply and demand foresight and relevance 
for strategic applications   

Under this approach, a new concept of “strategic raw materials” would be introduced. This concept 
would  take  into  account  better  the  foresight  perspective,  and  provide  a  stronger  focus  on 
applications  considered  strategics,  such  as  renewable  energy,  electric  mobility,  aerospace  and 
defence, digital or medical technologies. The list of raw materials identified as strategic would be 
enshrined into law and set a narrow scope for the measures proposed under this initiative. It would 
be shorter than the current list of critical raw materials and would likely overlap with it, but not 
fully be a subset as some raw materials that are strategically important and likely to face future 
supply challenges  are currently too diversified to pass the supply risk threshold of the criticality 
assessment.    

The  methodology  to  define  strategic  raw  materials  would  build  on  the  data  collected  for  the 
criticality  assessment  but  apply  also  more  subjective/qualitative  factors,  notably  relevance  for 
strategic applications and forecasted demand growth. It would be applied to the full set of assessed 
raw materials, not only the ones currently identified as critical. As this would be a new concept and 
as important data has yet to be gathered, the exact methodology is not yet defined, but the following 
is a list of the factors considered for inclusion: 

  Relevance for strategic sectors and technologies:  

o  The strategic sectors and technologies would be renewable energies and e-mobility 
(lithium batteries, hydrogen electrolysers, fuel cells, electric motors, wind energy, 
photovoltaics) as well as aerospace and defence, digital and medical technologies. 
o  The joint foresight report of JRC and GROW (in preparation) on “Supply chain 
and  future  demands  analysis  of  strategic  technologies  and  sectors  in  the  EU” 
should  serve  as  the  base  for  identifying  the  raw  materials  for  the  selected 
technologies. 

o  Proposed  indicator:  count  of  high  relevance  of  each  raw  material  to  selected 
technologies, e.g. 9 for Copper, 2 for PGMs (platinum and iridium), according to 
preliminary calculations.  
  Future supply and demand forecasts for 2030: 

o  Global  Demand  2030/2020:  ratio  between  the  forecasted  future  global  demand 

(2030) and current reported demand (2020), from various sources.  

o  Global Demand-Supply Gap 2030 (in tonnes): difference between the forecasted 
future global demand (2030) and future supply (2030) , from various sources.  

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o  Future EU demand (2030): based on the joint foresight report of JRC and GROW 
(in  preparation)  on  “Supply  chain  and  future  demands  analysis  of  strategic 
technologies and sectors in the EU”. 

  Production volumes:  

o  Rationale:  Given  the  widely  different  market  sizes  of  critical  raw  materials 
production, ramping up production to meet rising demand is more challenging for 
larger-volume raw materials, where e.g. increasing supply by 10% requires several 
mega-mines  to  be  opened,  whereas  increasing  demand  for  smaller-volume 
materials  can  be  satisfied  by  just  one  medium-sized  mine,  or  even  just  by 
introducing  an  additional  processing  step  on  an  existing  site  in  the  case  of  by-
products  contained  in  carrier  raw  materials  (e.g.  gallium  as  a  by-product  of 
aluminium  production).  A  logarithmic  measure  would  be  used  to  capture  the 
variation in orders of magnitude. 

  Other potential factors:  

Import Reliance (IR) parameter from the current criticality methodology 

o  Supply risk (SR) parameter from the current criticality methodology  
o 
o  Form  of  production:  main  product/co-product/by-product.  By-products  face 
higher supply risks than main products or co-products, for example if the main 
material production stops (Aluminium/Gallium, Copper/Cobalt) or the price of the 
by-product does not justify an expensive separation (Indium or Germanium from 
Zinc, Rare earths from Iron ore). 

o  Reserves: economically extractable geological resources in tonnes. Main source is 

USGS, but data is not available for all minerals and metals. 

  A  governance  structure  (cf.  Pillar  C)  would  monitor a  full  list  of  non-energy,  non-
agricultural raw materials, compiling databases (annually) on current EU production, 
imports,  exports,  consumption,  recycling  etc.  for  all  raw  materials.  It  would  also 
identify which applications are (or will be) dependent on the availability of the raw 
materials.  It  would  conduct  foresight  at  different  time  horizons  on  EU  and  global 
demand and supply of all RMs (taking into account different technological scenarios 
and material efficiency/substitution possibilities, e.g. by assigning probability weights 
to the scenarios; for supply, taking into account current production and announced new 
projects). This would be coordinated closely with/via the EC’s RMIS, as part of the 
EC’s operational capacity. The gathered information would be made available to the 
Advisory Group of the Single Market Emergency Instrument. 

It  is  expected  that  following  this  methodology,  approximatively  between.  10-15  strategic  raw 
materials would be identified. 

9.1.1.3. 

Approach 3: Legal definition of both critical and strategic raw materials, 

with concentric circles of policy measures’ scope 

Under this approach, both of the concepts/lists described above would be given legal status. The 
list of critical raw materials identified based on the above-described criticality assessment would 
be amended to include all strategic raw materials identified based on the above-described multi-
criteria assessment, such that strategic raw materials would be a subset of critical raw materials. 
The thus slightly enlarged list of critical raw materials would define the overall scope of the Critical 
Raw Materials Act, providing for actions related to monitoring, exploration, recycling or carbon 
footprint,  while  the  most  costly  or  ambitious  measures  (such  as  stockpiling  coordination  and 
streamlined permitting and priority funding access) would only apply to the shorter list of strategic 
raw materials. The figure below shows this visually and Annex 9 provides a detailed overview of 
the scope for each pillar.  

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The following figure maps the measures described under other pillars against the set of all screened 
raw materials, critical raw materials and strategic raw materials: 

To operationalise this approach, the following would apply: 

  The proposal should include an empowerment for the Commission to adopt delegated 
acts regularly updating the list of critical and strategic raw materials, specifying the 
frequency of such an update (e.g. every 3 or 5 years150, with the possibility of an ad 
hoc update when deemed necessary); 

  The methodology to be used by the Commission when updating the list of critical and 
strategic raw materials should be specified in the legal proposal, as well as the potential 
revision of the methodology. 

  A governance structure [see pillar C] would monitor a full list of mineral and metal 
raw  materials,  compiling  databases  (annually)  on  current  EU  production,  imports, 
exports, consumption, recycling etc. for all raw materials. It would also identify which 
applications are (or will be) dependent on the availability of the raw materials. It would 
conduct foresight at different time horizons on EU and global demand and supply of 
all  RMs  (taking  into  account  different  technological  scenarios  and  material 
efficiency/substitution  possibilities,  e.g.  by  assigning  probability  weights  to  the 
scenarios;  for  supply,  taking  into  account  current  production  and  announced  new 
projects). This would be coordinated closely with/via the EC’s RMIS, as part of the 
EC’s operational capacity.  

  A first list of critical and strategic raw materials should be included in an Annex to the 

legal proposal. 

Discarded  approaches:    Approach  1  is  discarded  at  an  early  stage,  as  it  would  not  provide 
sufficient  focus  for  more  ambitious  measures  (e.g.  strategic  stocks,  streamlined  permitting  and 

150 Note: The European Parliament, in its November 2021 Resolution on “A European strategy for critical raw 
materials” asked for 2 years, but this would decrease stability of the list for investors. DG GROW experience shows 
that 3-5 years would be optimal. 

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financing support for Strategic Projects) and thus apply them too broadly. Also, the critical raw 
materials  list  would  continue  not  to  include  such  important  raw  materials  as  copper,  nickel  or 
aluminium that do not pass the supply risk threshold in the backward-looking criticality assessment 
but are essential for the green transition and face significant supply challenges (see chapters 2.1.1.1 
and 2.1.1.2). 

Approach 2, namely limiting the scope of the entire initiative to a new, shorter of strategic raw 
materials, is discarded at an early stage, as it would mean that no legal status would be given to the 
list  of  critical  raw  materials  and  as  such  not  even  “lighter”  measures  such  as  an  early-warning 
system, targeted exploration or recycling targets could apply to the non-strategic critical materials, 
despite their identified supply risk and overall economic importance. Introducing a new concept 
with  legal  consequences  while  maintaining  a  non-regulatory  criticality  assessment  would  also 
likely  overshadow the latter  and  could thus undermine  the credibility  of the  criticality  exercise 
developed over the last 10 years, and exclude non-strategic but economically important sectors 
(e.g. construction, chemicals, manufacturing). 

9.1.2. 

Pillar B – Setting strategic raw materials targets   

9.1.2.1. 

Approach 1: Developing a framework to set EU-level guiding targets for strategic raw 

materials regarding capacity  

First, this approach would set headline targets for the development of EU capacity per strategic 
raw material by 2030, e.g. the EU is able to meet 30% of its needs for a specific strategic raw 
material by 2030. Headline targets would be set specifically for strategic raw materials for which 
the  investment  needs  and  potential  capacities  are  more  clearly  identified,  e.g.  lithium  and  rare 
earths. 

Then, to achieve such headline targets, more specific  value chain targets would be set, where 
appropriate, for the following stages of the value chain:  

o  Extraction, e.g.: by 2030, at least X% of EU demand for primary raw materials 
should  come  from  European  sources,  comprising  Overseas  countries  and 
territories of EU Member States and EEA countries.  

o  Refining, e.g.: by 2030, at least X% of EU demand for processed materials should 

be covered by European sources. 

o  Recycling, e.g.: by 2030 and by 2050, the EU should cover at least X% of its total 

demand through its own secondary production.  

In terms of time horizon, the first value chain targets would be set for 2030, and would have to be 
announced within one year of entry into force of the regulation. In 2030, following an assessment 
by the governance structure, new targets would be set for 2040, and similarly for 2050.  

When set, the value chain targets would have to take into account:  

o  Existing  EU  targets  for  the  deployment  of  EU  renewable  energy  (Renewable 
Energy Directive), as it drives the need for green technologies containing strategic 
raw materials. SRM needs created by defence or digital strategies would also be 
taken into account. 

o  Existing recycling targets (recycled content or waste recovery), which could drive 
the  EU’s  ability  to  meet  EU  recycling  capacity  targets  (e.g.,  in  the  Batteries 
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o  The geological endowment of Member States and the EU as a whole, as reported 
in pillar D, for the setting of extraction targets, taking into account the feasibility 
studies operated by private or public bodies. 

o  The industrial capacity of Member States and the EU as a whole so as to determine 

refining/processing and recycling targets. 

o  The existing and planned projects pipelines, as reported by the relevant industrial 

alliances as well as by the Member States to the governance structure. 

o  The  expected  growth  of  EU  demand  for  the  strategic  raw  materials  on  which 

targets are set.  

o  The concentration of global supply for the strategic raw material. 

Though the exact level of targets to be defined would be adopted by the process described below, 
it is useful to estimate preliminary size of such targets for the purpose of this impact assessment. 
Examples of target levels could include: 

o  As  a  headline  figures,  the  European  Raw  Materials  Alliance  has  identified  a 
pipeline of projects that would ensure 20% of EU demand in rare earth permanent 
magnets by 2030; 

o  Other investment cases from ERMA assess the possibility of reaching 20 to 60% 

of EU sourcing for some materials; 

o  Other stakeholders assess that: 

o  For raw materials likely to become strategic, 50% of EU sourcing is achievable 
for the refining stage, and 25% for the extraction stage, with the exception of 
some  materials  (depending  on  geological  endowment),  based  on  the  data 
provided by some studies151;  

o  Higher targets (up to 75% of EU sourcing) could be achieved for the recycling 
of materials by 2030 provided the materials are already well integrated in the 
recycling and industrial capacity loops; 

o  For battery raw materials, the investment needs of the existing projects pipeline 
could cover 20% of EU demand with EU sourcing by 2030, and attain higher level 
by 2040/2050. Some stakeholders foresee possible targets based on the existing 
pipeline, e.g. for processed lithium, 50 to 60% of EU needs could be covered by 
2030. 

The mechanism to set target would be the following: the governance structure would propose to 
the Commission value chain targets for all strategic raw materials, 1 year after entry into force of 
the regulation, based on the first reporting of Member States to the governance of their 1) mineral 
resources (pillar F) and 2) project potential in their territory along the value chain (Pillar G) and 3) 
project potential in third countries, with the help of ERMA and EBA. The Commission would take 
note of the proposals from the governance structure, which would hold a strategic meeting on how 
to ensure the application of these targets, notably in the selection of Strategic Projects in or outside 
the EU. When a new strategic raw material is identified, the governance structure would meet to 
define its target. 

9.1.2.2. 

Approach 2: Setting EU-level targets obliging the governance structure to work toward 

them through Strategic Projects proposals (cf. pillar E) and performance review 

Conversely to approach 1, the targets would be directly set in the Regulation, at different value 
chain stages. They would be aspirational targets, with a double role: 

151 KU Leuven, Metals for Clean Energy - Pathways to solving Europe’s raw materials challenge, 2021 

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1)  Provide a common objective for public policies and private actors to work toward their 

achievement; 

2)   Serve as a criteria for the selection of Strategic Projects, which would have to demonstrate 

that their future output will serve to develop such targets.  

The  target  levels  would  be  formulated  with  headline  figures,  and  would  ensure  that,  for  each 
strategic raw material and by 2030,  

o  Union extraction capacity is able to extract the materials needed to cover at least 
X % of Union’s annual consumption of refined materials, to the extent that the 
Union’s known reserves allow for this; 

o  Union  refining  capacity  is  able  to  refine  at  least  X  %  of  the  Union’s  annual 

consumption of refined materials; 

o  Union recycling capacity is able to produce secondary materials covering at least 

X % of Union’s annual consumption of refined materials; 

The  level  of  such  targets  is  coherent  with  the  estimate  of  stakeholders  and  with  the  potential 
projects pipeline. Targets for extraction would need to take into account the geological resources 
available and the economic feasibility of extraction. When setting those targets, it is worth noting 
that  they  refer  to  EU  annual  consumption  in  2030,  which  is  set  to  increase  for  most  materials 
concerned, thereby requiring additional EU efforts for meeting them.  

In addition, compared to approach 1, the Commission would have a formal role in tracking progress 
towards the targets, based notably  on the state of  exploration of national resources of critical raw 
materials; on the advancement of Strategic Projects (cf. Pillar E), and on whether their development 
is impeded by specific factors, notably permitting bottlenecks, lack of investment, etc.  

If it is apparent that EU capacities are not developing sufficiently to meet the EU-wide targets, the 
Commission would assess the necessity for adopting new measures.  

9.1.2.3. 

Approach 3: Setting national targets in the regulation for strategic raw 

materials based on national resources and existing capacities   

Under this approach, Member States would be imposed country specific targets at different value 
chain stages for strategic raw materials with a view to decrease the vulnerabilities and to increase 
the resilience, after the governance structure’s initial assessment of their industrial capacity and 
mineral resources. Those targets would be adopted through delegated act. The Commission would 
jointly agree, no less than 6 months after the first 2030 review, on a set of measures to unlock the 
Member State’s potential and contribution to achieving the targets. 

If, in a subsequent review of the Member State’s performance 2 years after the first review, no 
further progress has been made, the Commission should assess the origin of this lack, notably to 
determine the origin of it. In the event where permitting bottlenecks are the concern, the Member 
State would be compelled to review its permitting procedures and allocate sufficient resources to 
the public authorities in charge. 

Discarded approach:  Approach 3 is discarded early as it is perceived as too intrusive for Member 
States, which remain the responsible authority for their mineral resources. This approach would 
therefore not respect necessary standards of subsidiarity. In addition, Member States do not have 
the same level of same mineral resources and of industrial capacity. While national targets would 
have  to  take  into  account  such  differences,  they  would  also  place  an  uneven  burden  on  some 
Member States compared to others.  

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9.1.3. 

Pillar C – Governance structure   

This pillar seeks to enable the EU to increase its ability to foresee and mitigate structural supply 
shocks before they materialise, notably by enabling Member States and companies to build up their 
resilience  through  appropriate  tools.  The  scope,  depth,  speed  and  efficiency  of  such  tools  are 
inherently linked to the governance structure that would be charged with carrying out the tasks 
specified in the subsequent (sub)pillars (C.1, C.2, C.3) on monitoring and risk-assessment, strategic 
stocks and risk preparedness. Therefore, the approaches proposed are bundled together as part of 
options 1, 2 and 3, and the resources are adapted according to the scope of the tasks proposed.   

9.1.3.1. 

Approach 1: Tasking expert groups RMSG and EIP on raw materials to 

carry out tasks on monitoring and risk assessment 

Under this approach, the Commission would rely on its existing expert groups (RMSG, EIP on 
RM) to develop relevant tasks on monitoring and risk assessment. The relevant experts would meet 
at  technical  level  fora  focusing  discussion  and  exchanges  on  structural  issues  pertaining  to  the 
critical raw materials value chain, providing advice to the Commission on different pillars, e.g., on 
the definition of critical and strategic raw materials, on the establishment of dedicated targets, on 
the state of supply chains of critical raw materials, on strategies that companies could develop to 
mitigate supply risks and on strategies that Member States could adopt with regards to strategic 
stockpiling. Such exchanges would support the Commission in its work on critical raw materials 
act and the  gathered  information  would also  be  made  available  to  the  governance  structures  of 
vigilance and crisis management mechanisms dealing with raw materials.. 

9.1.3.2. 

Approach  2:  Developing  a  dedicated  EU  CRM  board  supported  by  a 
network  of  national  agencies  and  operational  capacity  [within  the 
Commission] 

Under this approach, the Commission would propose to set up a EU CRM board composed by 
representatives of Member States and the Commission. This board would be in charge of building 
on the existing resources within the Commission and Member States administration to carry out 
the tasks described in the subsequent pillars (C1, C2, C3). Based on the contributions of the actors 
below, the board would issue advice to the Commission on particular actions, such as on defining 
strategic raw materials and setting targets for them on EU supply capacity and EU diversification, 
as well as on building up strategic stocks, and on proposing Strategic Projects (as per pillar G and 
K). The board would adopt its rules of procedure at its first meeting and the Commission would 
provide a common secretariat for the board and the network described below. 

For tasks pertaining to the definition of strategic raw materials and their targets, as well as regular 
market  monitoring  and  forecasting  for  the  selected  raw  materials,  the  board  would  rely  on  the 
secretariat  with  intelligence  capacity  and  a  network  of  national  agencies  established  by  the 
regulation. Member States would appoint representatives from the relevant authorities, and their 
national intelligence or other relevant raw materials agencies. In the event where a Member State 
would not have a national supply and intelligence agency on critical raw materials or equivalent, it 
would nominate a representative from the authority in charge of geological or mineral resources. 
The Member State would also be encouraged to gather the necessary resources for assessing its 
own territories and developing its expertise in the sector.  

For those tasks, the board would also be able to consult relevant expert groups, such as the EIP on 
RM or the RMSG, to ensure that civil society, industrial stakeholders, including SMEs, and NGOs 
are heard in the relevant discussions. For the tasks pertaining to the building of strategic stocks and 
corresponding  obligations,  the  board  would  have  to  convene  Member  States’  authorities  or 

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agencies in charge of emergency and stocks, which are different from the supply and intelligence 
agencies mentioned above. 

For  tasks  pertaining  to  the  selection  of  Strategic  Projects  and  to  the  definition  of  strategic  raw 
materials  and  their  targets,  the  board  would  also  be  able  to  consult  industrial  alliances  for  raw 
materials  (ERMA)  or  batteries  (EBA),  which  would  notably  contribute  to  the  identification  of 
investment needs or potential Strategic Projects alongside Member States, as well as the different 
geological  surveys  and  the  relevant  permitting  authorities.  Tasks  linked  to  raw  materials  value 
chains knowledge would interact with the EC’s RMIS. 

The board would also be able to invite to dedicated meetings third parties from EEA countries, 
neighbourhood countries or countries having a Strategic Partnership on raw materials or an FTA 
with a chapter on raw materials; or relevant international organisations. In such case, the meeting 
would  be  dedicated  to  the assessment  of  a  Strategic Project  in  a third country  and  how to  best 
support it; or any other matter related to the international dimension of diversification and of the 
critical and strategic raw materials value chain, notably in cooperation with the Global Gateway 
governance.  The  board  would  also  ensure  the  exchange  of  information,  cooperation  and 
coordination with the relevant governance bodies that deal with the vigilance and crisis response 
for raw materials. To support the operative tasks described above and in the subsequent sub-pillar, 
the board would still rely on the expertise of the European Commission, whose resources would 
be adapted to the scope and depth of such tasks. 

9.1.3.3. 

Approach 3: Developing an operational capacity as a separate structure 

to implement the CRM Act's provisions 

This  approach  would  consist  of  creating  a  full-fledged  operational  capacity  on  critical  raw 
materials,  that  is  external  to  the  Commission  itself  and  is  set  on  a  permanent  basis  rather  than 
relying on regular cooperation of Member States and European capacities as provided by the board 
and network under approach 2. 

There  are  different  formats  that  this  operational  capacity  could  take,  such  as  the  creation  of  a 
dedicated  decentralised  EU  agency  on  critical  raw  materials  or  the  creation  of  a  dedicated 
directorate on critical raw materials in an existing agency. These different formats are however not 
analysed separately in detail as it is assessed that the costs and efficiency would only marginally 
differ from one to another (as demonstrated by the impact assessment relative to the creation of a 
European Labour Authority152. 

Alike  the  board  defined  in  approach  2,  this  operational  capacity  would  be  able  to  rely  on  the 
expertise  of  existing  expert  groups,  industrial  alliances,  Member  States  representatives  and 
agencies, etc., but it would be able to carry out the tasks determined above independently, though 
in coordination so as to avoid overlaps. 

The operational capacity would ensure the exchange of information, cooperation and coordination 
with  the  relevant  governance  bodies  that  deal  with  the  vigilance  and  crisis  response  for  raw 
materials. 

The tasks that the operational capacity would carry out are spelled out in subsequent pillars but 
would also include the definition of strategic and critical raw materials and corresponding targets, 
the development of monitoring, risks assessment and stockpiling capacities as well as the selection 

152 Impact assessment report - SWD(2018)68 p56, table 4 

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of strategic projects. Although the tasks are similar to those proposed for the board (approach 2), 
they would here be wider in scope and depth. 

Discarded  approach:  Approach  1  is  discarded,  as  in  comparison  with  the  two  approaches 
developed afterward, it does not provide for substantial additional benefits and does not allow to 
tackle  the  problem  drivers.  Indeed,  the  format  of  expert  groups  favour  the  development  of  an 
inclusive discussion, with a wide set of stakeholders, but does not allow for the development of an 
operational  capacity  capable  of  carrying  out  the  tasks.  Consequently,  adding  new  tasks  to  the 
existing  expert  groups  would  not  differ  substantially  from  the  baseline  scenario.  It  is  therefore 
proposed that only the approaches 2 and 3 of the subsequent pillars (C1, C2, C3) are analysed, 
considering the need to align the scope of the tasks with the resources provided by the governance 
structure. This is why no approach 1 is mentioned for these pillars. 

9.1.4. 

Pillar C.1 Monitoring and risk assessment 

9.1.4.1. 

Approach 2: Developing monitoring capacities and risk assessment  

This approach would define precise monitoring tasks that would be carried out by the EU CRM 
board (i.e. the governance structure set out in approach 2 of Pillar C). The approaches  2 and 3 
develop a more comprehensive and permanent framework dedicated to critical and strategic raw 
materials, ahead of crisis, while taking the instruments proposed in the SMEI into account (c.f., 
early warning mechanism, in approach 2). 

Scope: With the support of the Commission, the board, with the support of the network, would 
develop a market monitoring capacity related to the critical raw materials industrial value chain, 
focussing  on  risks  that  may  disrupt, compromise  or negatively  affect the  supply  of  critical raw 
materials. This work would contain an element of foresight and a focus on strategic applications of 
the materials monitored. The scope of such work would comprise both the state of supply chains 
within the internal market and in the global value chain, taking due considerations of the evolution 
of  trade  flows  as  well.  It  would  also  ensure  a  regular  annual  intake  of  information  to  ensure 
coordination across Member States with regards to different stages of the CRM value chain.  

Such  EU-wide  capacity  is  supported  by  stakeholders,  with  177  (68  %)  out  of  259  respondents 
agreeing  or  strongly  agreeing  that  a  dedicated  EU-wide  governance  capacity  tasked  with 
monitoring actions would benefit the EU CRM value chain. 

Means and actions: Through the network, the board would ensure to the best extent possible the 
coordination of research activities of national agencies on a specific material or value chain and 
the subsequent knowledge sharing amongst them in order to avoid overlap and gain added value in 
depth and knowledge. To develop such capacity, there is a parallel need to ensure  information 
sharing from Member States and companies operating in the CRM value chain. 

First,  Member  States  would  have  an  obligation  to  report  at  least  annually  to  the  governance 
structure on the following topics: 

  The state of exploration, extraction, processing and recycling projects in the UNFC format 
(NB: such reporting is also partially accounted for in pillar D on exploration; the costs for 
such reporting are therefore not accounted for under this pillar). 

  A risk assessment of their domestic CRM value chain as reported by their own analysis 
and by surveying large companies operating in their country in such value chain, for which 
the burden would be limited to a minimum;   

Second, companies operating in a critical raw materials value chain or smaller companies would 
be surveyed on a voluntary basis by the Commission through external support. All information 
gathered would have to be treated in full confidentiality and with appropriate level of security, as 
established by the governance structure, and should be aggregated in order not to display sensitive 
commercial information or information affecting security and public order. 

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Deliverables:  

-  First,  this  monitoring  would  feed  into  the  determination  of  critical  and  strategic  raw 
materials, that the Board would propose to the Commission (c.f. Pillar A) and would better 
inform subsequent policy decisions. 

Second, this monitoring capacity would be used to publish more regular information on monitoring 
through the publication of regular reports on the state of critical and strategic raw materials supply 
chain (a monitoring dashboard), with the main risks outlined to companies so that they can best 
adapt their resilience strategies. Such work could also be useful to support the screening of foreign 
direct investment: the assessment of whether an acquisition is problematic or not becomes more 
apparent after a relevant mapping of the value chain. 

Third, to the extent possible in terms of resources, the Commission would develop and runstress 
test of strategic raw materials value chain to estimate the likelihood and impacts of a future 
disruption (model-based, scenario-based, exercises with participating companies). Such stress test 
would be developed based on the following stages: select the strategic raw materials for study, 
estimate risks per different scenario, incorporate supply and demand forecasts and potential gaps, 
determine materials necessary for finished goods / services, apply market responses to shortage or 
shock, analyse shortfall risk to the strategic sectors and the whole economy, identify mitigation 
options and assess their feasibility to prioritize them. To ensure that the stress tests can cover at 
least  each  strategic  raw  materials  every  three  year,  the  Commission  would  ensure  that    the 
coordination of joint or complementary research by existing national agencies in the network. The 
results of those stress tests would be commonly published and made publicly available, for instance 
on the monitoring dashboard, to ensure that it benefits economic operators.  

Under this approach, no dedicated CRM early warning mechanism would be developed, since the 
mechanism  developed  in  the  proposed  SMEI  (Article  8)  could  cover  critical  or  strategic  raw 
materials in the contingency planning framework. The mechanism allows for the notification of a 
Member State to the Commission of any incidents that significantly disrupt or have the potential 
to  significantly  disrupt  the  functioning  of  the  Single  Market  and  its  supply  chains  (significant 
incidents). The information and intelligence gathered under this approach would however feed in 
the governance structure and Member States, which could then be used for this SMEI’s  Ad hoc 
alerts for early warning. With due consideration for the SMEI mechanism, this approach would 
still have to ensure that the different actors in place (Commission, CRM Board, Member States, 
governance  bodies  of  SMEI,  CHIPS  Act  or  HERA)  are  informed  whenever  the  monitoring 
provisions would lead to the assessment of a potential risk to the EU supply. 

9.1.4.2. 

Approach 3: Developing monitoring and risk management capacities 

In addition to the monitoring and general risk assessment provided by approach 2, this approach 
would ensure the development of targeted risk assessment  as well as of risk management tools, 
thereby supporting the resilience of European companies. 

Means and actions: Targeted risk assessment would be carried out by the operational capacity (cf. 
approach 3 of Pillar C) which would: 

  Conduct  real  time  monitoring  of  the  CRM  value  chain  (screening  of  news  reports, 
business  intelligence,  high-frequency  customs  data),  using  those  data  to  determine  the 
monitoring dashboard described above. 

  Conduct direct stress tests on strategic raw materials value chain at a more frequent pace, 
coordinating with Member States supply agency but with additional capacity to run them 
itself ;  

  Develop an Early warning mechanism (EWM): based on the monitoring, information 
gathering and stress test, the operational capacity would develop a EWM that indicate that 

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a strategic raw material is at risk of imminent shortage or disruptions. The definition of 
this  mechanism  should  be  adopted  by  the  Commission  on  the  advice  of  the  operating 
structure within 6 months of entry into force of the regulation, and could be modified as 
necessary. If triggered, Member States would be informed as well as large companies that 
are users of SRMs; EWD results wouldhave to be made public for companies, including 
SMEs, to benefit from it. 

  Provide direct advice to the EU industry on supply risks and sourcing of raw materials, 
and facilitate interactions between the raw materials suppliers and the EU end users. 

In  addition  to  the  coordination  and  information  sharing  tasks  mentioned  in  approach  2,  this 
approach would include information request from large companies operating in a strategic raw 
materials value chain in order to ensure a higher degree of information on the state of supply chains. 

9.1.5. 

Pillar C.3 Companies’ risk preparedness 

9.1.5.1. 

Approach 2: Developing requirements on company diversification and stockpiling  

Under this approach, specific requirements would be set on companies to ensure their preparedness 
and resilience. Under those requirements, large companies (>250 staff) which consume strategic 
raw materials as a primary input for their production would have to comply with at least one of the 
following obligations:  

1)  Ensuring a diversified source of suppliers if it relies on strategic raw materials (when the 

market structure allows); 

This should comprise a diversification both in terms of suppliers but also in terms of third countries 
on which the concerned EU economic operators could be dependent on for their supply. Indeed, if 
supply is fully concentrated in a single country but on different suppliers, it would still be at risk 
in  the  event  of  some  form  of  supply  risks.  For  instance,  the  energy  curtailment  in  China  that 
affected the country’s magnesium producers simultaneously, putting EU users at risk of overall 
supply cut. It is certain that this diversification would have to take due account of the availability 
and affordability of other supply sources.  

2)  Ensuring a sufficient level of strategic stocks of strategic raw materials equal to 60 days of 

consumption;  

If they cannot ensure and demonstrate their adherence to one of those measures, companies would 
have to then report to the Member States in which they are established explaining the reasons for 
their non-compliance. 

Those companies would also have to develop an in-depth audit of their supply chain under the form 
of  a  stress  test,  to  assess  regularly  their  vulnerability  under  different  supply  scenario  and  the 
suitability of their risk mitigation strategies.  

Member States would be responsible for ensuring the implementation of these obligations. 

9.1.5.2. 

Approach 3: Developing requirements on company diversification and 

stockpiling while providing direct support to foster companies’ resilience 

This approach would contain the measures developed in approach 2. In addition, to enable large 
companies  to  meet  these  obligations  and  to  support  SMEs  in  undertaking  such  efforts  (even  if 
SMEs would not face those obligations), this approach provides that the operational capacity advise 

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companies on relevant strategies to enable them to mitigate supply chains risks. This support model 
could be defined in the legislation laying out the operational capacity’s tasks. 

Such advisory structure, inspired by the services some national agencies offer to companies, would 
allow for all EU companies operating across the critical raw materials value chain to benefit from 
direct advise.  

9.1.6. 

Pillar C.2 Strategic stocks 

9.1.6.1. 

Approach 2: Ensuring EU level coordination and stock assessment for 

the stockpiling of strategic raw materials 

This approach would develop a mechanism to ensure higher coordination of strategic stockpiles 
amongst EU Member States, following the steps presented below. 

1) After the establishment of the list of strategic raw materials, Member States would be required 
to  report  (with  the  highest  level  of  confidentially  and  security)  to  the  Commission  on  the 
organisation  and  on  the  state  of  their  stockpiles  for  the  strategic  raw  materials.  Such  reporting 
would include the strategic raw materials that are stockpiled, the stock levels compared to their 
industry’s demands, and the planned allocation of stockpiles in the event of a shortage. 

2) The Commission, with the support of the board (cf. approach 2 of Pillar C), would review the 
common state of stockpiles and assess the potential convergences and overall levels of stockpiles 
across the EU, against a benchmark of what is considered as a safe level of stockpiling Where 
possible and relevant, the Commission would propose targeted recommendations for the Member 
States to reinforce its resilience on those matters. 

3) A review of the state of play and implementation of the Commission’s recommendation would 
take place regularly occur to monitor progress. The SMEI framework, including the definition of 
targets under the mechanism set in the vigilance mode, and the coordinated release under the Single 
Market emergency phase, could still apply to critical and strategic raw materials in the event of a 
crisis or threat; but the objective of approaches 2 and 3 is to act ahead of crisis or threat of crisis, 
as usually those situations are characterized by high market prices. 

9.1.6.2. 

Approach 3: Enabling the common purchase of strategic raw materials 

In addition to approach, this approach would mean that the operational capacity would foster the 
development of stockpiles of strategic raw materials. Based on the needs expressed by interested 
companies, the operational capacity (cf. approach 3 of Pillar C) would purchase through a joint 
procurement mechanism, appropriate quantities of strategic raw materials.  

The interested companies would be financing the purchase of the stockpiles, as they are voluntary, 
albeit  at  lower  costs  given  the  fact  that  common  purchasing  would  enable  marginal  saving.  In 
addition, it would have to be assessed whether any financial instrument developed in pillar E.2 
would be able to de-risk companies engaged in stockpiling by contributing to this mechanism. 

9.1.7. 

Pillar D – Exploration efforts in the EU 

The  approaches  developed  below  cover  the  early  stages  of  the  exploration  activities  related  to 
mineral  resources.  They  aim  to  enable  further  exploration  activities  by  ensuring  additional 
coordination  or  availability  and  reliability  of  data.    They  do  not  contain  provisions  to  promote 
feasibility studies that occur later in the exploration process and are usually carried out by economic 
operators (e.g., junior miners), nor do they contain measures that would allow Member States to 
override any environmental legislation. However, they also include national reporting of potential 

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critical raw materials projects according to the United Nations Framework Classification (UNFC) 
for  Mineral  and  Anthropogenic  Resources  in  Europe.  Further  support  to  private  explorations 
projects would rather occur within the context of Strategic Projects (approaches 2 and 3 of pillar 
E). 

9.1.7.1. 

Approach 1 - Requirement on Member States to report on the mapping 
and  evaluation  of  the  critical  raw  material  resources  and  extractive  waste 
areas in the EU  

With this approach, Member States would have to periodically report on the exploration activities 
carried  by  public  entities  and  non-confidential  information  of  exploration  activities  carried  by 
companies, targeting critical raw materials.  

This includes, but not only, existing public exploration programmes of mineral resources, targeting 
primary  deposits  (either  currently  or  historically  exploited  or  not)  and/or  secondary  deposits 
(extractive waste of closed or abandoned facilities). Information on secondary resources should 
consider the volume, grades, mineralogy, technology feasibility and characteristics of the deposits, 
when available. The governance structure (cf. Pillar C) would have to ensure regular meetings to 
discuss progress  of these exploration activities. 

Member States would also have to periodically report, using the UNFC classification system, on 
results from public and private exploration activities (when available) that have already estimated 
mineral resources (measured, indicated or inferred) or reserves (proven or probable) according to 
existing national or international reporting codes.  

On this basis, Member States would have to periodically report to the governance structure the 
state  of  knowledge  of  their  critical  raw  materials  resources,  under  UNFC  framework  when 
applicable, and aligned with INSPIRE. 

Member States would also be encouraged to: 

  Develop  and  implement  public  exploration  programmes  of  their  mineral  resources 
contributing to the knowledge base of EU mineral resources with a focus, but not only, on 
critical raw materials; 

  Reprocess  existing  geochemical  and  geophysical  data  with  new  and  more  accurate  and 

robust algorithms; 

  Develop new mineralisation models for critical raw materials; 
  Develop predictability maps for critical raw materials and update them on a regular basis; 
  Exchange good practices to include critical raw materials in land use policies and land use 

plans; 
Identify suitable areas for exploration of critical raw materials. 

 

In  addition,  this  approach  would  also  encourage  Member  States  to  take  due  account  of  the 
occurrence  of  mineral  resources  containing  critical  raw  materials  (c.f.,  pillar  A)  when  taking 
measures regarded to land use that might affect the exploitability of the deposits, for instance by 
granting it a statute of public interest, by including it in land use planning, as an information layer, 
or by ensuring that statutory change in land use determination from non-mining to mining can be 
implemented in a streamlined and time-considerable manner. 

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9.1.7.2. 

Approach  2  –  Requirement  on  Member  States  to  report  on,  develop  and  implement 

national exploration programmes for critical raw material resources and extractive waste. 

Under this approach, Member States would be compelled to implement identified actions, even if 
the extraction or reprocessing of extractive waste is not part of their industrial or economic strategy. 
The development of the knowledge produced would then be available for future generations and 
enable the development of the EU critical raw materials value chain. 

All actions under this approach would have to be revised on a regular basis in order to target the 
updated critical and strategic raw materials lists. 

  Develop and implement public exploration programmes 

Member States would have to develop and implement programmes for the public exploration of 
mineral resources. Programmes must be aligned with the list of critical raw materials but could 
include more raw materials based on MS specifics objectives.  

The public exploration campaign would include geological mapping at a suitable scale, thematic 
mapping in particular hydrothermal alteration and structural maps, geochemical campaigns of soils, 
sediments, rocks and extractive waste, aerial geophysical surveys.  

It is worth noting that these surveys would not only useful for mineral exploration but also for 
improving spatial land use and planning, e.g., groundwater knowledge, natural hazards mitigation 
or mapping natural geochemical background (a key information when dealing with environmental 
pollution and polluted soils). 

The  use  of  earth  observation  data,  in  particular  hyperspectral  and  multispectral  data  could  be 
included as part of the exploration programmes. 

The exploration programmes would be designed with the aim of targeting undiscovered deep land 
deposits but also unexplored shallow deposits of critical raw materials.  

The  exploration  programmes  would  include  the  development  of  new  mineralisation  models  of 
critical raw materials from the most relevant mineral systems in Europe.  

The acquisition and processing of the new data, and the development of new mineral models, could 
lead to the identification of anomalies and ultimately the discovery of new deposits, to be confirmed 
by feasibility studies conducted by mining operators. 

The results of the implementation of the programmes would be used to estimate the potential of 
the EU in mineral deposits and to attract investments in private exploration. 

Member States would report to the board every year on the status of those exploration programmes. 

  Reporting on critical raw material resources and extractive waste areas in the EU   

With this approach, Member States would have to periodically report on the exploration activities 
carried by public entities and non-confidential information of exploration activities carried out by 
companies,  targeting  critical  raw  materials.  This  includes,  but  not  only,  public  exploration 
programmes  of  mineral  resources,  targeting  primary  deposits  (either  currently  or  historically 
exploited or not) and/or secondary deposits (extractive waste of closed or abandoned facilities). 
Information on secondary resources should consider the volume, grades, mineralogy, technology 
feasibility and characteristics of the deposits, when available. 

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The governance structure (defined by pillar C) would have to ensure regular meetings to discuss 
progress of exploration activities in the Member States. 

Member  States  would  also  have  to  periodically  (yearly)  report,  using  the  UNFC  classification 
system, on results from public and private exploration activities (when available) that have already 
estimated  mineral  resources  (measured,  indicated  or  inferred)  or  reserves  (proven  or  probable) 
according to existing national or international reporting codes.  

Member States would not have to use the UNFC to report results on early-stage exploration projects 
that include identification of mineral occurrences or areas with mineral potential.  

  Reprocessing existing geochemical and geophysical data sets 

Member  States,  in  particular  Geological  Surveys  and  mining  authorities,  hold  substantial 
repositories of raw geochemical and geophysical data from past public exploration campaigns or 
acquired in the context of past exploration permits.  This data, together with new data acquired 
through public exploration programmes, could be reprocessed with new and innovative algorithms 
and processing methodologies.  

Under  this  approach,  Member  States  would  be  compelled  to  develop  and  implement  adequate 
policies, such as a dedicated a programme, to reprocess existing and newly acquired geochemical 
and geophysical data, with the aim of defining geochemical and geophysical anomalies, that could 
lead to discovery of new ore bodies of critical raw materials. 

 

 Developing predictivity maps 

Member  States  would  be  compelled  to  develop  and  implement  adequate  policies,  such  as  a 
dedicated programme, to produce and update predictivity maps for critical raw materials in order 
to improve the knowledge of the mineral  potential present in the EU. 

Predictivity  maps  are  a  powerful  tool  to  indicate  potential  areas  containing  deposits  yet 
undiscovered. Within one year of entry into force of the regulation, the governance body would 
define a standardised way to report this mineral assessment. These geological and mineral results 
would  be  reported  to  the  governance  structure  to  inform  the  definition  of  potential  targets  for 
extraction.    

 

 Publication of data 

The results of the exploration activities promoted by Member States through the actions presented 
above, would have to be periodically reported to the governance structure by using a predefined 
template  (specifications),  following  UNFC  when  applicable,  and/or  aligned  with  INSPIRE 
Directive.  This  would  foster  the  creation  of  pan-European  data  sets  or  maps  as  called  by 
stakeholders (e.g. EuroGeosurveys) 

After a joint assessment, and in due consultation with the data owners, such data would be made 
available to economic operators with a guaranteed equal access in view of promoting later stages 
of economic activities in the value chain, such as feasibility studies. 

Finally, this approach would, alike approach 1, encourage Member States to take due account of 
the occurrence of mineral resources containing critical raw materials (c.f., pillar A) when taking 
measures regarding land use that might affect the exploitability of the deposits. 

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9.1.7.3. 

Approach 3: Obligation to report to the governance structure on the land 
use decisions applicable to known deposits containing strategic raw materials 

In addition to approach 2, approach 3 would require Member States to inform other EU countries 
and the Commission through the governance structure of their intention to adopt a land use decision 
that  would  affect  the  potential  to  exploit  of  a  known  mineral  deposit  containing  strategic  raw 
materials, allowing for comments and discussion in the relevant fora. This measure would ensure 
that  information  on  upcoming  activities  over  these  deposits  are  provided  to  the  governance 
structure if such activities have the potential to affect other actions provided in the CRM act, such 
as the determination of targets based on an assessment of resources and deposits in Member States. 
This  obligation  for  Member  States  to  report  would  be  done  to  the  network  or  the  operational 
capacity (depending on whether option 2 or 3 are chosen). 

Discarded approach: It is suggested to discard approach 3 at an early stage. This approach was 
deemed as not respecting the proportionality principle, given that other reasons of strategic nature 
or environmental preservations might require the use of the land, despite the presence of a mineral 
resource of strategic importance, and that it would add unnecessary burden on Member States for 
the reporting. It is also not in line with subsidiarity principle to the extent that Member States, or 
local governments, are the most appropriate authorities to judge the relevance of a particular land 
and its use.  

9.1.8. 

Pillar E – Support to the value chain 

9.1.8.1. 

Approach 1: Requiring Member States to set up strategies to contribute 

to a stable and secure supply of CRMs 

Under this approach, each Member State would be required to create a strategy outlining the ways 
and timeline how it can contribute towards achieving a more stable and secure supply of CRM in 
the  EU,  by  identifying  and  supporting  projects that are  important  across the  CRM  value  chain. 
These strategies would have to be submitted to the Commission 6 months after entry into force of 
the legislation. The Commission would then analyse them jointly, evaluate the cumulative impact 
and based on this give specific recommendations to each Member State 12 months after entry into 
force. 

No specific legal notion of strategic projects would be established under this approach. 

9.1.8.2. 

Approach 2: Identify Strategic Projects, in Europe and partner countries 

abroad  

Under this approach, Strategic Projects would be established with legal consequences regarding 
permitting and access to finance as outlined in pillars E.1 and E.2.  

Companies  and  investors,  would  be  able  to  submit  their  proposals  to  the  Commission.    To  be 
eligible,  projects  would  have  to  fulfil  general  minimum  criteria,  among  them  a  meaningful 
contribution to the targets set under Pillar B, positive spill-over effects beyond the Member State 
where  they  are  located  and  a  positive  outlook  regarding  long-term  economic  viability.  The 
governance structure might apply more specific criteria per step of the value chain for each raw 
material  mentioned  in the list of  targets. To  this  end,  the  project  promoter’s application  should 
include, among other things: 

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- 

- 

- 

an assessment of their projects with regard to their contribution to reaching the targets and 
the applicable criteria; 
a  business  plan  evaluating  the  financial  viability  of  the  project,  including  an  overview 
about  the  secured  funding  and  the  remaining  financing  needs  and  estimated  time-to-
market.  
an assessment of the level of public acceptance of the project and, where relevant, a plan 
for ensuring it, including actions (additional to what is already required) such as awareness 
campaigns  to  educate  and  inform  the  public  of  the  importance  of  CRMs  for  the  green 
transition and how these CRMs could be obtained in the EU in a responsible way or setting 
up mitigation and compensation mechanisms to ensure that the project contributes to the 
general development of the relevant area.  

The  Commission  would then  share  the  application  with the  Member  State  where  the  project is 
intended to take place and ask for its general approval within one month for the project to receive 
the status of Strategic Project. Where it refuses, it would have to present its substantiated reasoning 
to the Commission who could request the Board to discuss these reasons. Where the Member State 
accepts, the Commission would check the application for the fulfilment of the minimum criteria.  
In case of many applications, the Commission would be able to prioritise applications for projects 
active on specific parts of the value chain in order to work towards a balanced representation of 
projects along all strategic raw materials along the value chain. The Commission would then assess 
the projects in consultation with the Board. For projects that fulfil the criteria, the decision to assign 
them the status of Strategic Project, this would be published as a Commission decision. 

Projects outside of the EU could also be labelled as Strategic Projects. To be eligible, those projects 
would also have to fulfil general minimum criteria, among them high environmental and social 
performance and contribution to the targets laid out in pillar B. They would also need the support 
of  one  or  more  European  companies  that  have  committed  to  purchase  at  least  e.g.  50%  of  the 
production of the respective strategic raw materials for e.g. 180 months for use in Europe. The 
projects should in principle be located in countries with which the EU has concluded a Free Trade 
Agreement with a chapter on raw materials or a Strategic Partnership.  To ensure compliance with 
ESG  criteria,  the  project  would  need  to  show  sufficient  evidence  that  it  would  qualify  for  a 
recognised  certification  scheme,  if  recognised.  Otherwise,  the  same  process  would  apply.  The 
respective third country would be closely involved to ensure compliance on the ground. The board 
might  also  coordinate  with  the  Global  Gateway  governance,  which  could  help  leverage  EU 
Member States funds for projects outside the EU.  

The number and nature of Strategic Projects to be designated would depend on the needs of the 
European economy, the current level of production as well of supply security per material and step 
of the value chain, as well as European production potential, next to individual characteristics of 
projects such as environmental performance Projects of all sizes could become Strategic Projects 
if they sufficiently help to address gaps in the European CRM value chain. To effectively ensure 
security of supply, the selection of projects would take into account an analysis of the gaps per 
material and step of the value chain. Due to its increasing importance over time, recycling projects 
would be expected to make up an increasing share of Strategic Projects over time. The potential 
number of projects to be assigned depends also on the size of the available projects. An estimation 
is made on their number in Annex 4 in order to best assess their potential impacts. 

9.1.9. 

Pillar E.1 – Permitting procedures 

Raw materials operations in the EU are subject to a comprehensive legislative framework that is 
meant  to  minimise  a  project’s  adverse  environmental  impacts  and  ensure  involvement  of  all 
relevant stakeholders in the permit-granting process. This framework is an essential achievement, 

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which this initiative should build on. However, the unpredictability of permitting procedures in 
terms of duration and outcome has been shown to discourage much-needed investment into the 
European  raw  materials  value  chain.  Against  this  background,  this  section  sets  out  different 
possible approaches to speeding up permitting processes and making them more predictable. 

9.1.9.1. 

Approach 1: CRM projects to be considered in spatial planning    

Intervening in an early phase, well-designed spatial planning has the potential to reduce land use 
conflicts and point project developers to suitable sites, which in turn is likely to accelerate permit-
granting  procedures.  Analogous  to  Union legislation on  the  deployment  of renewable  energies, 
therefore, Member States’ competent national authorities at national, regional and local level would 
be  required  to  take  into  consideration  and  provide  for  the  realisation  of  CRM  projects  when 
developing spatial plans.    

Given  the  potential  effects  on  the  environment  of  CRM  projects,  Member  States  should,  when 
developing those spatial plans, apply the Strategic Environmental Assessment (SEA) Directive11.   

Undertaking  the  SEA  procedure  encourages a  more integrated  and  efficient  approach to spatial 
planning and early in the project development phase. For example, applying the SEA procedure 
allows relevant national authorities to plan for the development of CRM projects while factoring 
in the environmental obligations and identifying the cumulative environmental impacts at an early 
stage. The outcomes in turn provide a basis for the subsequent project development and permitting 
procedures. This also translates into fewer conflicts at the individual project level, both in substance 
and in terms of public acceptance.  

9.1.9.2. 

Approach  2:  Mandatory  measures  to  make  permitting  for  Strategic 

Projects more predictable   

This approach includes the measures set out in Approach 1.  

In order to ensure a secure investment climate for Strategic Projects (see Pillar G) in particular, a 
general requirement would be set for Member States to ensure that administrative procedures for 
their approval are streamlined and expedited at the appropriate administrative level.  

In order to put such streamlining into practice, Member States would also be required to take the 
following concrete measures in relation to Strategic Projects:  

 

 

allocating  the  status  of  the  highest  national  significance  possible  under  national  law  to 
Strategic Projects for the purpose of permit granting processes;   
applying a joint procedure combining all relevant assessments (i.e. those required by the 
EIA, Habitats, Birds, Water Framework, Seveso and Industrial Emissions Directives) for 
a given project;   

  designating a ‘one-stop shop’, in the form of a competent authority which should be the 
sole  point  of  contact  for  project  promoters  during  the  entire  process  leading  to  a 
comprehensive decision for a given project and should coordinate the submission of all 
relevant documents and information;  
adhering to specific time limits for different stages of the permit granting procedure;  
allowing documents to be submitted digitally;  

 
 
  making available a manual of procedures for project developers.  

In  addition,  to  ensure  procedures  are  more  predictable,  the  scope  and  the  level  of  detail  of 
information’s for the EIA report needed to apply for the relevant permits would have to be clear 

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from the outset. In order to do so, this approach would make the scoping opinion preceding the 
submission of an EIA report mandatory for Strategic Projects.  

As  regards  the  duration,  there  would  be  an  overall  time-limit  set  for  overall  permit  granting 
procedure (covering the period from the date of acceptance of the submitted application file until 
a comprehensive decision) for Strategic Projects (e.g. 18 months).153 The following more specific 
time  limits  would  also  be  introduced  pertaining  to  specific  steps  of  the  permitting  process, 
including:  

  period between the request for a scoping opinion for environmental assessment report and 

 

the response – 1 month   
conclusion of the environmental impact assessment (which is bundled with the assessments 
relevant to the applicable nature protection directives) of a given project - 3 months (with 
possible 3-month extension)  

  public consultation on the  environmental impact assessment report – 2 months  

The time-limits would be shortened for procedures related to exploration, which by its nature has 
a smaller scope and impacts.  

The above-mentioned time limits would be without prejudice to potential delays caused by judicial 
or  non-judicial  appeals.  However,  Member  States  would  be  required  to,  where  available  under 
national  law,  apply  urgency  procedures  for  possible  litigation  related  to  the  permit  granting 
process.   

Lastly, this approach would provide direction to Member States on the application of substantial 
permitting conditions. The nature protection rules that are integral part of the relevant permitting 
conditions  (i.e.  the  Birds,  Habitats  and  Water  Framework  Directives)  provide  that  projects 
considered to be in the overriding public interest can be allowed to go forward even in the case of 
limited adverse impacts on the environment. Under this approach Member States also would be 
required to consider Strategic Projects, at least for refining and recycling, as being of public interest 
for the purposes of that assessment, considering their contribution to the Union’s supply security 
and  the  green  and  digital  transitions.  In  addition,  the  proposal  would  clearly  emphasize  that 
Member  States  may,  when  performing  their  case-by-case  assessments  to  weigh  potential 
environmental concerns with a Strategic Project’s public interest, consider a Strategic Project to be 
of overriding public interest if all the conditions set out in the relevant Directives are fulfilled.  

The obligations displayed in this approach take account of the subsidiarity principle by ensuring 
that  Member  States  may  refuse  the  development  of  a  Strategic  Project  on  their  territory  in  the 
selection process leading up to them.  

9.1.9.3. 

Approach 3: Require Member States to dedicate sufficient resources to 

their permitting   

This approach includes the measures set out in Approach 1 and 2.  

It  would  also  introduce  a  requirement  on  Member  States  to  dedicate  sufficient  resources  to 
permitting procedures for Strategic Projects. Following the example similar provision in the field 
of competition and consumer protection law, Member States would, more in particular, be required 
to  ensure  that  responsible  authorities  have  a  sufficient  number  of  qualified  staff  and  sufficient 

153 Similar to the time limit included in the TEN-E Regulation for cross-border energy infrastructure projects (18 
months) or the RED II Directive for renewable power plants (24 months).  

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financial, technical and technological resources necessary for the effective performance of their 
functions. 

9.1.10. 

Pillar E.2 – Access to finance  

9.1.10.1.  Approach 1: Encourage setting up of Investment Platform, leveraging 

finance through existing instruments  

Under this approach, no new funding instruments outside the possibilities of the current framework 
would be established, but the Commission would work towards an extended use of the existing 
possibilities and to tie them as closely as possible to the Strategic Projects. This would include 
fostering  the  setting  up  of  an  investment  platform  under  InvestEU,  which  specifically  supports 
CRM projects. This would require an Implementing Partner that has a valid Guarantee Agreement 
with the Commission (e.g. the Agreement with the EIB that administers 75% of the Commission’s 
guarantee  allows  to  fund  raw  materials  projects),  which  enables  the  EU  guarantee  and  helps 
attracting additional funding from private and public sources. Under InvestEU a wide variety of 
financial instruments can be provided, for example loans, equity or hybrid products. An InvestEU 
Advisory  Hub  on  CRM  would  be  set  up  to  support  provide  technical  assistance  and  advisory 
services to project promoters (as well as financial intermediaries), including for the creation of the 
investment  platform.  Additionally,  the  use  of  other  existing  funds  for  domestic  use  (RRF, 
Innovation Fund, Cohesion Funds, etc.) should be promoted and fostered for these projects. For 
CRM projects abroad funds aiming at international spending would be used (NDICI, EFSD+, IPA, 
etc.).  

9.1.10.2.  Approach  2:  Dedicated  CRM  Fund  with  Member  State  contributions 

and limited EU contribution from existing sources 

In addition to approach 1, the Board, with a dedicated standing sub-group consisting of financial 
experts from the Member State as well as the Commission, would provide support to Strategic 
Projects  in  access  to  finance.  It  would  point  to  existing  sources  that  could  provide  funding, 
including on level of the Member State, international financial institutions, national promotional 
banks and the Union. Possible sources for support on European and Member State level could be: 

  The  use  of  the  Recovery  and  Resilience  Fund  (RRF)  by  the  Member  States  to 

 

contribute to the needed investments.  
In addition, funds could be used more within existing programmes such as Horizon 
Europe and/or  the  Innovation  Fund to  actions  supporting  investments in the  CRMs 
field.  

  One such example is Horizon Europe which enables funding of pilot demonstrators 

for industrial application of technologies via proposals for projects. 

  The  Innovation  Fund  focuses  on  highly  innovative  technologies  and  big  flagship 
projects  within  Europe  that  can  bring  significant  emission  reductions.  It  is  about 
sharing the risk with project promoters to help with the demonstration of first-of-a-
kind highly innovative projects. In 2022, a project for battery recycling received a grant 
of EUR 68 million154. The fund could focus even more on CRM projects in the future. 
  Regional Development & Cohesion Funds: Under priority 2 – a greener, low carbon 
transitioning towards a net zero carbon economy – funds could be allocated for raw 
materials, for example for projects focusing on refining/processing/recycling. The Just 
Transition Fund could also be used more as has been demonstrated with a grant of 

154 https://climate.ec.europa.eu/system/files/2022-12/if_pf_2022_relieve_en.pdf 

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EUR 18.7 million to a rare earth magnet manufacturing facility in Estonia155. These 
funds, unlike most other sources of public funding, also allow to finance projects in 
earlier parts of the CRM value chain, that do not rely on innovative technology.  
  Explore providing counter-guarantees to national export credit agencies (ECAs) where 
such ECAs are involved in the financing of strategic projects in third countries with 
European off takers and European project promoters; 

  The NDICI (and, in particular, EFSD+ guarantee facility and blending facility) and 
IPA (Instrument for Pre-accession Assistance) funds could be used to support projects 
in their coverage area (i.e. in third countries) within the existing sectoral windows (e.g. 
energy  or  sustainability).  Special  sectoral  windows  could  be  opened  for  funding 
CRMs. but this would require additional resources for EFSD+, especially if dedicated 
guarantee programmes tailored to CRM are envisaged. 

  Existing EU funding schemes with loans, equity or grants in the area of energy could 
be  extended  to  cover  also  raw  materials  production  for  energy  applications.  They 
would  form  a  coherent  component  of  such  programmes,  reflecting  the  value  chain 
approach. EU added value, in terms of jobs, growth and resilience potential, may be 
part of the criteria considered when assessing the project proposals. 

For the external aspects it is crucial to work with the European Investment Bank and Development 
Finance Institutions to engage in the raw materials value chain in partner countries. Engagement 
in the financial and investment ecosystem have so far dominated, but are not sufficient to gauge 
the full potential.  It may also be relevant to leverage existing programmes with other multilateral 
development banks (MDBs) such as the World Bank Group (including the International Finance 
Corporation (IFC) and Multilateral Investment Guarantee Agencies (MIGA)), the Inter-American 
Development Bank (IDB), the EBRD, which have a long standing experience in this domain. As 
the  IFC  has  submitted  a  broad  proposal  to  EFSD+,  it  may  be  worth  exploring  including  CRM 
support, i.e. pending resources availability under EFSD+. 
Despite  these  efforts,  significant  gaps  would  persist  in  the  funding  landscape.  For  example, 
cohesion funding provides only limited opportunities for investment in wealthier regions of the 
EU, where geological resources for extraction, or energy availability for refining may be better; 
most other relevant funds are directed either at innovative projects or projects directly contributing 
to positive environmental and climate impacts (without considering the role of CRMs in enabling 
clean technology). Importantly, current funding conditions do not address strategic autonomy as a 
goal (even though the Trade Policy Review and other official strategy papers have endorsed this 
concept) while investments in areas such as CRMs are essential for this objective. An important 
project  about,  for  example,  rare  earth  extraction  in  the  north  of  Sweden  would  therefore  still 
struggle to attract funding.  

Therefore, the Commission would work with interested Member States to set up a dedicated CRM 
Fund  to  further  support  CRM  projects,  including  Strategic  Projects.  This  Fund  would  require 
Member State contributions and a contribution of existing EU sources to leverage this money with 
private financing156.  

To ensure the European dimension and to get closer to closing the large investment gap as shown 
in the access to finance part of the problem section, existing European resources would also be 
used.  The  necessary  mix  of  different  financial  instruments  would  depend  on  the  project’s 

155 https://www.neomaterials.com/neo-performance-materials-to-receive-first-ever-grant-under-europes-just-
transition-fund-for-neos-planned-sintered-rare-earth-magnet-manufacturing-plant-in-estonia/ 
156 Depending on the design and governance of the upcoming Fund, its support may qualify as State aid, in which case 
State aid rules will apply. 

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specificities,  notably  the  stage  of  the  value  chain  (e.g.  risk  capital,  loans). The  Fund’s  purpose 
would be to support the CRM value chain in Europe and partner countries abroad, in particular 
Strategic Projects, and to generate a return on investment. The Fund should be able to provide loans 
and equity to projects along the entire CRM value chain, focussing on Strategic Projects. Grants 
should also be considered but depend on the type of financial resources and set up of the Fund.  

Where  public  support  qualifies  as  State  Aid,  existing  State  Aid  rule  would  be  respected.  The 
support from public sources would be applied to crowd-in private money and increase the leverage. 
It would focus on filling the remaining gap where the market struggles to finance it due to market 
failures.  Supported  projects  would  also  need  to  show  their  long-term  economic  viability  under 
functioning  market  conditions,  the  aim  would  not  be  to  support  that  permanently  require 
operational support.  

9.1.10.3.  Approach  3:  Dedicated  CRM  Fund  with  additional  Commission 

contribution and Member State contribution 

In addition to approach 1, the Commission would set up a dedicated CRM Fund that combines new 
EU  money  with  Member  State  contributions,  leveraging  private  investments  to  support  CRM 
projects along the  value chain in Europe and abroad, prioritising Strategic Projects. It could be 
managed by the governance structure (i.e. the board or operational capacity, cf. Pillar C). The CRM 
Fund would be able to provide loans, equity and grants for investment support, in compliance with 
State aid rules. 

This  Fund  would  provide  a  common  European  approach  to  funding  CRM  projects.  With  the 
appropriate endowment, it would be able to provide more and riskier financing, and could also be 
less  bound  by  profitability  considerations  and  operate  more  freely  (compared  to  the  fund 
considered under approach 2) to effectively address proven market failures.  

9.1.11.  Pillar F – Waste legislation 

9.1.11.1.  Approach  1:  Adoption  of  a  Commission  Recommendation  targeting 
small consumer electronics and announcements of future CRM circularity 
actions 

  The Commission would adopt (as part of the CRM Act package) a Recommendation 
on take-back schemes for small consumer electronics, to improve the return of used 
and waste mobile phones, tablets and laptops, which contain significant amounts of 
critical raw materials.  

  The Communication accompanying the CRM Act would announce that the upcoming 
(Q2 2023) joint review of the Directive on end-of life vehicles and the Directive on 
the type-approval of motor vehicles with regard to their reusability, recyclability and 
recoverability (3R) will include provisions to  support recovery of CRMs  from end-
of-live vehicles and use of recycled CRM content in new vehicles. 

  The  Communication  accompanying  the  CRM  Act  would  announce  (for  Q1  2024) 
upcoming secondary legislation under the current WEEE Directive to amend its Annex 
VII on selective treatment for materials and components of WEEE to include a list of 
CRM-rich electrical and electronic equipment and components thereof. It would also 
announce the launch of a preparatory study for the identification of such CRM-rich 
EEE and components. 

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  The  Communication  accompanying  the  CRM  Act  would  announce  an  upcoming 
review  of  the  WEEE  Directive,  assessing  possibilities  of  introducing  information 
requirements  (on  CRMs  contained  in  electrical  and  electronic  equipment),  design 
requirements  (for  dismantlability  of  CRM-rich  components)  –  in  synergy  with 
Ecodesign provisions –  and separate collection and recovery targets for a list of CRM-
rich electrical and electronic equipment. 

  The  Communication  accompanying  the  CRM  Act  would  announce  actions  to 
introduce EU end-of-waste criteria for the most important waste streams containing 
CRMs,  notably  (based  on  a  JRC  scoping  exercise157):  red  mud  /  bauxite  residue; 
phosphorus  recovered  or  produced  from  waste  water  treatment  and  sewage  sludge; 
rubber recovered/recycled from end-of-life tyres; ferro-alloys and silicon slags; and 
certain categories of waste electrical and electronic equipment that are currently not 
prepared for re-use.  

  The Communication accompanying the CRM Act would announce (for Q2 2024) a 
proposal to introduce specific waste codes for Lithium-ion batteries and intermediate 
waste streams (“black masses”) under the European List of Waste.  

  The Communication accompanying the CRM Act would announce (for Q2 2023) the 
launch of an Ecodesign preparatory study on potential product-specific requirements 
on recycled content and on scarce, environmentally relevant and critical raw materials, 
which  would  be  followed  up  by  implementing  measures.  It  would  also  note  the 
possibilities to set relevant requirements for CRM-rich products under the proposed 
Ecodesign for Sustainable Products Regulation. 

9.1.11.1.1. 

Approach  2:  Targeted  amendment  of  the  Extractive  Waste 

Directive and certain circularity provisions in the CRM Act 

  The Commission would adopt (as part of the CRM Act package) an amending Directive 
to the Extractive Waste Directive, to introduce targeted changes aimed at increasing CRM 
recovery from extractive waste. The two main measures would be to require: 

1.  operators of extractive waste sites to perform an economic pre-feasibility study of 
the potential to recover CRM from the extractive waste generated (as part of the 
waste management plans under Article 5), and  

2.  Member  States  to  create  a  database  of  all  closed  extractive  waste  sites,  search 
administrative records and perform geochemical sampling to identify quantities 
and concentrations of CRMs on these sites, and publish such information in order 
to encourage CRM recovery projects on those closed waste sites. 
The  CRM  Act  would  include  an  obligation  for  Member  States  to  develop  national  circularity 
strategies,  addressing  areas  of  national  competence,  such  as  waste  collection  and  treatment 
systems, national R&I programmes for CRM recycling technologies and CRM substitution, and to 
gather data on the most important product and waste streams and stocks containing CRMs on their 
territory. 
9.1.12.  Pillar G - Actions on standards for the critical raw materials value chain 

9.1.12.1.1. 

Approach  1:  Increase  efforts  to  have  EU  rules  and  principles 

reflected in international standards  

The  European  Union  has  had  a  strong  global  footprint  in  international  standardisation  and 
European  experts and  national standardisation  bodies  are important contributors  to the  work  of 
ISO. This approach would include several actions to leverage this position specifically in relation 
to critical raw materials, with the aim of ensuring that the principles and values underlying relevant 

157 JRC Publications Repository - Scoping possible further EU-wide end-of-waste and by-product criteria (europa.eu)) 

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EU legislation are reflected in international technical standards on CRMs, especially standards for 
ensuring the sustainability of industrial processes involved in the CRM value chain.    

This  approach  would  promote  a  more  strategic  and  coordinated  approach  to  international 
standardisation activities by helping Member States, EU standardisation bodies and EU industries 
more  effectively  coordinate  and  share  resources  in  support  of  international  standardisation 
processes.  

Following the overall approach set out in the Standardisation Strategy, the Commission would in 
particular:  

  Ensure  that  the  High-Level  Forum  (HLF),  announced  in  the  Standardisation  Strategy, 
includes a specific work stream on CRMs. The HLF will bring together representatives of 
Member  States,  European  Standardisation  Organisations  and  National  Standardisation 
Bodies,  industry,  civil  society  and  academia  to  set  priorities,  advise  on  future 
standardisation  needs,  and  coordinate  effective  representation  of  European  interests  in 
international standardisation fora.   

  Monitor the effective implementation of existing commitments on standardisation in EU 
trade agreements and use such trade agreements to cooperate on standardisation with like-
minded partners and coordinate positions in relevant international technical committees;  
  Promote  international  cooperation  on  standardisation  and  EU  standards  with  the 
Neighbourhood, Development and International Cooperation Instrument – Global Europe 
(NDICI-GE) and Horizon Europe, also with a view to support stakeholder participation in 
international standardisation (SMEs, civil society, academics);  

  Fund relevant projects in the field of standardisation in selected African countries as part 
of its development cooperation policy and the Global Gateway. The EU will promote the 
development of a standardisation infrastructure reflecting the EU principles and values in 
partner  countries  with  accession  perspectives/closer  integration  with  the  EU’s  internal 
market, starting in the EU’s Neighbourhoods. 

9.1.12.2.  Approach  2:  Mandate  development  of  standards  regarding  relevant 
industrial processes   

In addition to approach 1, this approach would look beyond the EU’s contribution to international 
standardisation efforts by also providing direct support for the development of European standards 
and standardisation deliverables on the sustainability of CRM-related industrial processes.  

Based on the priorities set by the HLF and ERMA working groups, the Commission would request 
CEN to develop e,g, technical specifications, technical reports, workshop agreements or European 
standards. The Annual Union Work Programme on Standardisation would thus clearly reflect the 
growing importance of CRMs. This work would be supported according to the existing rules on 
financing of European standardisation. 

The resulting technical standards will provide solid and coordinated basis for EU participation in 
international  standardisation  efforts,  and  where  necessary  provide  a  clear  counter-narrative  to 
standardisation efforts by industry or countries with lower environmental standards. 

The  development  of  standards  following  the  mandate  provided  by  the  Commission  to 
standardisation bodies is likely to take up to three years. 

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9.1.12.3.  Approach  3:  Set  essential  requirements  regarding  relevant  industrial 
processes and mandate development of related harmonised standards  

In addition to approach 1, this approach would include the setting of essential requirements related 
to the sustainability of CRM-related industrial process, e.g. on the water use and resource efficiency 
of  extraction  and  recycling  processes  for  lithium.  Following  a  similar  approach  to  the  New 
Legislative Framework, the Commission would issue standardisation mandates for CEN to develop 
harmonised European standards, providing a presumption of conformity with the requirements to 
which they are linked.   

In  addition  to  operationalising  such  requirements  (allowing  responsible  economic  operators  to 
more easily apply them and competent authorities to more easily enforce them), the creation of 
harmonised European standards would provide an even stronger basis for European leadership in 
international standardisation fora.  

Discarded approach: Approach 3 was discarded at an early stage. Although this approach would 
effectively  contribute  to  the  objective  of  having  high  quality  standards  available,  it  would  also 
entail the setting of additional requirements on the EU CRM value chain. In addition, there is a risk 
that such requirement would overlap or be incoherent with the rules to be developed under the 
recently proposed revision of the Industrial Emissions Directive, where it is proposed to bring the 
relevant industrial processes under its scope. As such, approach 3 would risk creating additional 
barriers to the EU’s supply of CRMs, and thereby has the potential to undermine the attainment of 
the other objectives, including to strengthen the EU value chain for CRMs. 

9.1.13.  Pillar H – Environmental footprint of critical raw materials 

9.1.13.1.  Approach  1:  Set  minimum  requirements  for  certification  schemes  for 

sustainable CRMs  

This approach focusses on the reliability of general environmental claims (e.g. ‘this lithium was 
produced using sustainable practices’) made by operators selling CRMs on the EU market. The 
availability  of  specific  qualified  information  on  the  environmental  footprint  is  addressed  in 
Approach 2 below. 

This approach would include setting set of common requirements for voluntary certification158 
schemes  at  EU  level  related  to  the  sustainability  of  CRMs.  This  would  be  coupled  with  an 
empowerment for the Commission to establish which certification schemes meet those common 
requirements through implementing act. The common requirements to be set should ensure that 
recognised  certification  schemes  are  based  on  transparent  criteria  covering  all  relevant 
sustainability aspects and are awarded based on reliable and third-party verified information.   

In order to prevent unreliable general environmental claims, sellers of CRMs on the EU would only 
be allowed to make such claims about the sustainability of their materials (e.g. ‘this lithium was 
mined and refined sustainably’) based on recognised certification schemes. It would not be allowed 
to make reference to non-recognised certification schemes.  

158 ’Certification' in this context refers to the voluntary process of providing an operator with an attestation of a 
status or level of achievement regarding the sustainability of their operations. This is different from the ’declaration’ 
referred to in approach 2, which refers to the making available of specific quantified information on the 
environmental impacts linked to CRMs placed on the market based on pre-set calculation rules.  

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9.1.13.2.  Approach  2:  Require  declaration  of  the  environmental  footprint  of 

CRMs sold in the EU 

In addition to approach 1, this approach would entail requiring economic operators to declare the 
environmental footprint of CRMs they sell on the EU market, as a market access requirement. This 
will help bring about transparency on the environmental footprint of CRMs and help shift the Union 
market towards lower impact CRMs, regardless of where they are produced.  It may also enable 
other policies at Union and national level, such as incentives or green public procurement criteria, 
fostering the use of CRMs with lower environmental impacts. 

This  requirement  would  only  apply  for  CRMs  for  which  there  are  material-specific  calculation 
rules available. Before mandating the rules for the calculation of the environmental footprint of 
CRMs, a consultation process with industry and Member States seems necessary to fine-tune those 
rules and clarify how they will be maintained over time.  The material-specific calculation rules 
would  therefore  be  provided  by  means  of  implementing  acts  prioritising  CRMs  with  relatively 
higher demand and environmental impacts.  

Given the wide variety of environmental profiles of the different CRMs, the Commission would 
be empowered to, when specifying calculation rules, allow the footprint declaration to be limited 
to one or a subset of impact categories where this is justified based on the environmental profile of 
the  different  materials.  For  example,  the  impact  category  global  warming  potential  or  carbon 
footprint is a significant category for many CRMs (e.g. REEs and lithium) and is an important 
factor given that CRMs are central to the manufacturing of technologies needed for decarbonisation 
and  could  thus  be  made  the  focus  of specific  declarations. In  addition,  it  would allow  Member 
States to set incentives based on the different footprints of CRMs, including potentially in public 
procurement.   

The calculation rules would be based on the Product Environmental Footprint (PEF) method.1 The 
PEF  method  was  developed  by  the  Commission  to  ensure  reliable  and  comparable  life-cycle 
assessment information. As such, it would be ensured that CRM buyers intending to buy relatively 
more sustainable materials will find reliable information in the market and are enabled to make 
effective purchasing decisions. A proper enforcement of the regulatory proposal will most likely 
require putting in place a third-party verification system rather than relying on self-declarations, so 
that  a  fair  and  verifiable  mechanism  is  established.  The  use  of  a  common  calculation  tool  and 
harmonised secondary datasets159 could also contribute to this aim. 

The  requirement  would  in  principle  not  apply  to  final  products  containing  relevant  CRMs. 
However,  where  the  footprint  of  CRMs  included  in  product  is  specifically  referenced  in  any 
relevant product documentation, it would be required to justify that claim and refer to the declared 
footprint of the CRMs used.    

9.1.13.3.  Approach  3:  Putting  in  place  a  mechanism  for  setting  performance 

classes and maximum thresholds for environmental footprint 

In addition to approach 1 and 2, this approach would consist in  introducing a mechanism to set 
footprint performance classes to further support market differentiation and the setting of maximum 
footprint thresholds for specific CRMs placed on the EU internal market. Such measures could 
have adverse effect on the security of supply for CRMs. Therefore, in light of this risk and in order 
to  avoid  any  negative  effect  on  supply  security,  the  following  measures  would  be  gradual, 

159 The calculation of environmental footprints would require a mix of secondary and company-specific data. For 
example, for carbon footprints, the calculation rules could allow factoring in information on supplier-specific 
electricity mixes, which may improve the footprint results compared to the ones obtained with the use of default 
country residual grid mixes. 

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progressive and evidence-driven. Indeed, for each maximum footprint threshold, there should be 
dedicated assessments conducted. 

This approach would contain the following gradual steps: 

First, as there is not yet sufficiently detailed statistical information on the relative footprints of 
CRMs,  the  Commission  would  gather  such  information  through  the  declarations  proposed  in 
approach 2 through secondary legislation 

Second, once sufficient market knowledge is acquired through step 1, relevant CRMs would be 
categorized in an A-G scale based on their footprint. 

Third, a threshold would be identified, which would correspond to correspond to the limit values 
of the lower or lowest classes in the performance class scale. 

The introduction of maximum thresholds the third step would only be possible when accompanied 
by  a  proportionate  and  dedicated  assessment,  which  would  take  into  account  the  relative 
distribution of the footprint values for the relevant CRMs placed on the Union market, the extent 
of progress in the reduction those footprints as a result of the information requirement referred to 
in  approach  2,  and  the  effective  and  potential  contribution  of  a  threshold  to  the  Union’s 
environmental and climate objectives. In addition, this assessment would take close account of the 
potential effects of thresholds on EU imports of the relevant CRMs, ensuring that the level of the 
thresholds is set so as to prevent potential bottlenecks for EU supply of CRMs. 

This  approach  would  steer  relevant  economic  operators  to  reduce  the  environmental  footprint 
associated with their CRMs and would ban from the market those materials with the relative highest 
footprint. Economic operators should be given sufficient time to adjust their production facilities. 

Discarded approach: Approach 1 was discarded at an early stage. Although this approach would 
help  make  general  claims  about  the  sustainability  of  CRMs  more  reliable,  it  would  not  affect 
quantitative claims for which conflicting methods could continue to proliferate. In light of the large 
support for increasing the availability of reliable environmental footprint information expressed in 
the OPC, it is expected that this approach alone would therefore not be able to count on sufficient 
support  of  stakeholders.  In  addition,  it  is expected  that  without  clear  quantified  information  on 
important impact categories, relying only on increasing the reliability of general claims, it will not 
be possible to effectively achieve the Union climate and environmental objectives.  

ANNEX 6: SME TEST 

32  SMEs  answered  to  the  public  consultation  survey,  mainly  operating  in  the  exploration  or 
extraction of critical raw materials (10 and 11 respectively – often combining both activities), while 
14 reporting being active in the use of CRM for manufacturing, 9 in recovery and recycling, 7 in 
research, etc. 

They reported having experienced problems in relation of their supply of critical raw materials, 
such as shortage or disruption, for most of those which answered. 

The initiative is considered as relevant for SMEs.  

Step 1/4: Identification of affected businesses  

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All businesses and SMEs should feel the positive effects of a more stable supply of critical raw 
materials.  Particularly  affected  by  the  legislative  initiative  are  businesses  and  SMEs  in  sectors 
along the CRM value chain and those who directly use them as inputs.  

The  former  group  includes,  for  example,  junior  miners,  firms  engaged  in  exploration  or  in  the 
nascent industry of CRM recycling, that are often SMEs. For them, the easier access to funding as 
well streamlined permitting provisions are expected to bring large benefits. 

For  downstream  users,  the  increased  availability  of  their inputs  as  well  as  lower  risk  of  severe 
disruptions is especially beneficial for SMEs as they tend to struggle more with acquiring such 
goods in a crisis situation. 

Step 2/4: Consultation of SME Stakeholders  

Of 81 businesses that replied to the Open Public Consultation 32 are SMEs.  

Of the policy papers received many explicitly mentioned SMEs calling for financial support due 
to their particular vulnerabilities. It is also mentioned that it is instrumental for the competitiveness 
of micro and SMEs to secure reliable sourcing of the input materials needed for the green transition 
at a competitive price. Social and environmental concerns should be balanced with economic and 
security interests. 

Step 3/4: Assessment of the impact on SMEs  

For  policy  option  2,  SMEs  would  benefit  from  the  enhanced  availability  of  monitoring  and 
information regarding the supply chains of critical and strategic raw materials. Indeed, they usually 
are less informed about the supply chains risks. In the public consultation, 40% of SMEs agree that 
companies would benefit from public monitoring programmes with only 6% disagreeing. 44% of 
SMEs agreed that they would benefit from public monitoring to inform them about risks of supply 
chains disruption (6% disagreed, the rest being neutral of with no opinion). To this end, 59% of 
them agree that an EU-wide governance capacity with monitoring tasks could help strengthen the 
value chain resilience. A slight majority of them agreed that companies lack sufficient information 
on supply risks to take preventive measures. (28% against 22%), although 72% support measures 
that would enable them to benefit from such information. 

On governance, the board would regularly convene with stakeholder groups, among them some 
groups explicitly representing SMEs. This would ensure that they could express their opinion. 

SMEs are also adamant about the difficulty to access private financing for CRM projects (62% 
agreeing;  0%  disagreeing) and  to access  public  funding  (80%  agreeing;  3% disagreeing). They 
converge in saying that the length and complexity of permitting processes are the main reasons for 
the difficulties in accessing private finance (47%), followed by the lack of support from  public 
financial institutions (34%) and the higher production cost in the EU (31%). For them the funding 
opportunities are therefore particular valuable. Additionally, the InvestEU guarantee (pillar E.2) 
contains  a  specific  window  for  supporting  SMEs.  Especially,  junior  miners  and  exploration 
projects  often  struggle  to  attract  adequate  funding  and  using  this  window  would  therefore  be 
particularly beneficial for SMEs. 

The  proposed  approach  on  exploration  (pillar  D),  as  suggested  by  stakeholders (e.g.,  European 
Federation  of  Geologists),  would  bring  positive  benefits  to  SMEs  as  they  are  the  main  actors 
operating in this early stage of the value chain have less resources and capacities to undertake risk-
heavy exploration operations. 

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A lot of these benefits to SMEs also apply under the other policy options. In option 3 SMEs would 
additionally benefit a lot from early warning mechanisms of supply chain disruptions provided by 
the operational capacity. Larger companies are more likely to able to shoulder these tasks on their 
own than SMEs. 

Step 4/4: Minimising negative impacts on SMEs  

Although most of the measures discussed in this Impact Assessment have positive impact on SMEs, 
there  are  some  that  could affect them  negatively.  Therefore,  specific exemptions  for  SMEs  are 
foreseen, such as one from reporting obligations. 

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ANNEX 7: OVERVIEW OF POLICY MEASURES TAKEN BY THIRD COUNTRIES 

Actions of other global actors and organisations 

In  consideration  of  the  projected  supply-demand  imbalance  and  rising  concerns  with  supply 
security amidst geopolitical tensions, other countries have acted to ensure their supply of CRMs 
for the future. The following overview includes both countries in a similar situation as the EU such 
as  manufacturing-heavy  but  CRM-import-reliant  Japan,  South  Korea  or  the  UK  but  also  major 
mining and refining players such minerals-rich Australia and Canada. 

The UK adopted its Critical Minerals Strategy in July 2022160 which includes three main axes: a) 
enhancing domestic production; b) collaboration with international partners: using G7, IAE, MSP, 
and bilateral paths; supporting UK companies abroad including with export finance; c) Enhancing 
international  markets,  by  promoting  the  City  of  London  as  a  hub  for  responsible  mining  and 
trading. The UK established its Critical Minerals Intelligence Centre in July 2022161, which will 
provide ongoing intelligence on the supply of and demand for critical minerals. The centre is to be 
run by the British Geological Survey. 

In  Japan,  a  country  with  a  large  manufacturing  sector  and  few  domestic  CRM  resources,  a 
dedicated governmental structure on critical raw materials (JOGMEC) is in charge of monitoring, 
stockpiling (sufficient to meet 60 to 180 days’ demand) and investing. It supports exploration and 
technological development by Japanese companies through equity capital and liability guarantees. 
Its JOGMEC’s mandate was recently expanded to “functions of equity investments for domestic 
processing and smelting of rare metals”. In addition, the Economic Security Promotion Act aims 
to ensure stable supplies of critical items.  

In South Korea, the State-owned Korea Resources Corporation runs a stockpile storage system for 
rare  metals.  A  dedicated  plan  to  stabilise  resources  supply  in  2021  has  developed  in  2021  a 
dedicated plan to stabilise resources supply notably by increasing the stockpile of minerals to 100 
days of consumption162. The country also has an early warning system in place to monitor 20 key 
raw materials. 

In 2022, the US also adopted the Inflation Reduction Act (IRA), aiming to put the US on a path to 
around 40% percent emissions reduction by 2030. Numerous financial support programmes in the 
IRA  have  domestic  or  regional  content  provisions.  These  include  the  sourcing,  processing  and 
recycling of many critical raw materials. With the American Battery Materials Initiative, USD 2.8 
billion in public money will be disbursed to support projects in different stage of the battery value 
chain, of which USD 1.6 billion are earmarked for projects to separate and process battery raw 
materials. Critical minerals-related funding is also available under the Infrastructure Investment 
and Jobs Act. 

Australia  published  in  2022  a  Critical  Minerals  Strategy,  which  is  coordinated  by  the  Critical 
Minerals  Office  (founded  in  2020).  The  Office  supports  research  and  development,  promotes 

160https://www.gov.uk/government/publications/uk-critical-mineral-strategy/resilience-for-the-future-the-uks-critical-
minerals-strategy 
161 UK’s first Critical Minerals Intelligence Centre to help build a more resilient economy - GOV.UK (www.gov.uk) 
162 The Ministry of Trade, Industry, and Energy announced on December 28 the Ministry's work report for 2022, titled 
“Building Korea into an Industrial Power, Overcoming & Rising Together” 
http://english.motie.go.kr/common/download.do?fid=bbs&bbs_cd_n=2&bbs_seq_n=903&file_seq_n=1  

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investment,  facilitates  strategically  important  critical  minerals  projects  and  improves  access  to 
information163. 

On 9 December 2022, Canada released its new Critical Minerals Strategy focusing on the entire 
value chain of Canada’s listed 31 critical minerals and backed by a CAD 5.3 billion (about EUR 
3.6  billion)  budget  allocation.  The  strategy  also  aims  to  accelerate  regulatory  and  permitting 
processes by enhancing coordination between the federal and the provincial levels. Moreover, the 
Investment Canada Act subjects foreign investments to review for national security concerns and 
critical mineral investments receive “enhanced scrutiny.” The new guidance states that investments 
by State-owned enterprises in critical minerals will only be approved on “an exceptional basis” and 
will apply to investments of any size. 

China fully dominates global production of several critical raw materials at different stages of the 
value chain (e.g., Magnesium, rare earth elements164), has consolidated economic activity in China 
in some of these sectors (e.g. in December 2021, three of the six Chinese state entities producing 
rare earth merged to create of a State-owner enterprise named China Rare Earth Group Co, which 
holds nearly 40% of China’s rare earth production), and also abroad: in the democratic Republic 
of Congo, which accounts for half of the world’s cobalt reserves, China now controls 70% of the 
country’s cobalt production with 15 out of 19 cobalt mine owned or financed by China (as of 2020). 
In central Asia, China makes use of its Belt and Road Initiative (BRI) to develop strong ties with 
mineral corporations165. China has made use of export control mechanism for CRMs: for instance, 
it reduced its export quota of rare earths (to the United States) in 2010, and since January 2022, all 
rare earth elements are covered by Chinese export control measures. China has also been engaged 
in economic stockpiling of CRM166.  

At multilateral level, during the G7 2022 Summit in Germany, G7 Leaders agreed to ‘promoting 
market  circularity  and  support  diversification  by  exploring  investment in  alternative resources, 
processing capabilities, sustainable practices, and new technologies’167. 

The  2022  Ministerial  Communiqué  of  the  International  Energy  Agency  (IEA)  recognised  the 
growing importance of critical minerals and materials to clean energy transitions and agreed to 
establish a new Working Party on Critical Minerals (“CMWP”). The aim of the Working Party is 
to provide a forum for IEA member countries to co-operate on critical minerals policy, technology 
and security. 

163 Critical Minerals Office   | Department of Industry, Science and Resources 
164 SWD(2022) 41 final 
165 America’s Critical Strategic Vulnerability: Rare Earth Elements - Foreign Policy Research Institute (fpri.org) 
166 Situation and Policies of China’s Rare Earth Industry (www.gov.cn) 
167 See the Background for a full quote. 

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ANNEX 8: INTERPLAY WITH OTHER LEGISLATION AND POLICIES 

Environmental legislation 

  The Strategic Environmental Assessment Directive (SEA)168 provides a set of procedural 
rules  to  integrate  environmental  considerations  into  their  preparation,  adoption  and 
implementation  of  public  plans  and  programmes  by  national  authorities,  including  for 
land-use. For example, national authorities have to examine reasonable alternatives and 
take account effects on the environment including biodiversity, soil, water, air, etc.  
  The Environmental Impact Assessment Directive (EIA)169 requires Member States to make 
projects likely to have significant effects on the environment, because of their nature, size 
or location, subject to consent and an assessment by a competent national authority (i.e. a 
permit).    To  get  a  permit,  the  EIA  Directive  requires  e.g.  the  preparation  of  an 
environmental  impact  assessment  report  and  the  carrying  out  of  consultation  of  the 
authorities, the public and other Member States affected by the project. Under the EIA 
Directive  a  depending  on  their  likely  significant  impact  on  the  environment,  certain 
projects  are  subject  to  a  mandatory  assessment  while  for  others  a  determination  by  a 
competent authority is required to decide if the project shall be subject to an assessment. 
In  practice,  most  raw  materials  related  projects,  including  exploration,  extraction, 
processing and recycling, are subject to the EIA procedure. 

  The Industrial Emissions Directive (IED)170 in turn governs the operation of raw materials 
related  projects.  It  provides  for  the  integrated  prevention  and  control  of  pollution 
originating from relevant installations. Although the current IED only applies to industrial 
facilities processing raw materials, the recently proposed revision of the IED would widen 
the scope to also include the extraction and treatment of industrial minerals and metals. 
The  IED  requires  Member  States  to  make  the  operation  of  an  installation  subject  to 
obtaining  a  permit  containing  conditions  set  in  accordance  with  the  principles  and 
provisions of the IED. The permit conditions should take into account the environmental 
performance of an installation, including emissions to air, water and soil. In that regard, 
the permit should include emission limit values.   

  The Habitats and Birds Directives171 require Member States to prevent significant negative 
effects on protected species and habitats in Natura 2000 sites. To that end, raw materials 
related projects that are likely to have a significant effect on such a site, must be subject to 
an  appropriate  assessment.  The  competent  national  authorities  can,  based  on  the 
assessment,  agree  to  the  project  it  is  does  not  adversely  affect  the  integrity  of  the  site 
concerned.  In  exceptional  cases,  developments  that  could  have  an  adverse  effect  on  a 
protected  site  can  still  go  ahead  under  certain  conditions  and  where  the  procedural 
safeguards foreseen by the two Directives are respected. The EIA Directive provides for 
mandatory integration of this assessment with the EIA procedure. 

  The Water Framework Directive172 provides that the deterioration of the ecological status 
of a body of water is only allowed where justified by overriding public interests or societal 
benefits,  where  no  feasible  environmental  alternatives  exist,  and  where  mitigation 

168 Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the 
effects of certain plans and programmes on the environment 
169 Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 
2011/92/EU on the assessment of the effects of certain public and private projects on the environment 
170 Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions 
171 Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora 
and Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation 
of wild birds 
172 Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework 
for Community action in the field of water policy 

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measures are taken. In light of this requirement, projects potentially affecting bodies of 
water, including raw materials projects, need to be subject to assessment and permitting 
procedures (which may be integrated with the EIA procedure set out above).  

  The  Environmental  Liability  Directive173  establishes  the  obligation  for  responsible 
operators, including of raw materials projects, to prevent and, where necessary, remedy 
environmental damage. It defines environmental damage as damage to protected species 
and natural habitats, damage to water and damage to soil. 

  The Seveso-III-Directive174 aims at the prevention of major accidents involving dangerous 
substances.  However,  as  accidents  may  nevertheless  occur,  it  also  aims  at  limiting  the 
consequences of such accidents not only for human health but also for the environment. 
The  Directive  covers  establishments  where  dangerous  substances  may  be  present  (e.g. 
during  processing  or  storage)  in  quantities  exceeding  certain  threshold,  which  could 
include CRM projects. Among other things, operators of such establishments are obliged 
to take all necessary measures to prevent major accidents and to limit their consequences 
for human health and the environment.  

  The above directives also have important links with each other, allowing for or requiring 
the bundling of assessment required under each. For example, pursuant to Art. 11 (2) of 
the  SEA  Directive,  Member  States  may  provide  for  coordinated  or  joint  procedures, 
fulfilling  the  requirements  of  the  relevant  EU  legislation.  Likewise,  Art.  13  (4)  of  the 
Seveso Directive, gives the possibility Member States to provide for coordinated or joint 
procedures in order to fulfil the requirements about the land use planning in the sense of 
that directive. The amendment of the EIA Directive (Directive 2014/52/EU) continued the 
set path for streamlining of the environmental assessments at project level. Under Art. 2(3) 
of the EIA Directive175, the one-stop shop approach for assessments deriving from the EIA 
and  the  Habitats  and  Birds  Directives176  is  required  (with  a  margin  of  discretion  for 
Member States). For the other Directives (such as the Water Framework Directive177 or the 
Industrial Emissions Directive178), it is left up to Member States to decide whether to opt 
for the one-stop  shop  or not. To facilitate  the  transposition  in this  part  of the amended 

173 Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability 
with regard to the prevention and remedying of environmental damage 
174  Directive 2012/18/EU Directive 2012/18/EU of the European Parliament and of the Council of 4 July 2012 on the 
control of major-accident hazards involving dangerous substances. 
175 Article 2(3) states that Member States shall, where appropriate, ensure that coordinated and/or joint procedures 
fulfilling the requirements of the EIAD and the Habitats and Birds Directives are provided for 
176 For the Habitats and Birds Directives, several guidance documents have been developed such as the ‘Revised 
methodological guidance on Article 6(3) and (4) of the Habitats Directive’, on appropriate assessment of plans and 
projects on the Natura 2000 sites (EN.pdf (europa.eu)). These guidelines together with sectoral guidelines on wind 
energy (wind_farms_en.pdf (europa.eu)), energy transmission 
(guidance_on_energy_transmission_infrastructure_and_eu_nature_legislation_en.pdf (europa.eu)) and hydropower 
(hydro_final_june_2018_en.pdf (europa.eu)) provide many practical examples for how project approval can be 
facilitated, among others, by strategic (spatial) planning, use of solid environmental data and suitable mitigation 
measures without compromising nature protection needs. 
177 For the Water Framework Directive, guidance has been developed on the procedure to be applied for new 
developments possibly affecting water status. This guidance also highlights the need or advantages of coordinated 
assessment with assessments under the EIA Directive, where applicable (Guidance Document No. 36 established in 
the framework of the Common Implementation Strategy under the Water Framework Directive, on Exemptions to 
the Environmental Objectives according to Article 4(7)) 
178 Article 5(2) of the IED obliges Member States to take measures that ensure a coordination of the permitting 
process when more than one permit/competent authority or more than one operator is involved in the procedure. 

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Directive,  the  Commission  issued  a  guidance  on  the  streamlining  of  the  environmental 
assessments179. 

Waste and circularity legislation 

  The Waste Framework Directive (WFD)180 targets waste in general and obliges Member 
States to take measures to prevent waste generation, targeting notably products containing 
critical raw materials (e.g. by instructing Member States to prevent that those materials 
become  waste).  The  Directive  provides  that  Member  States  shall  establish  waste 
management plans, which are required include, where appropriate, existing major disposal 
and  recovery  installations,  including  any  special  arrangements  for  waste  containing 
significant amounts of critical raw materials. In addition, Member States are bound since 
2018 to establish waste prevention programmes to define waste prevention measures for 
products  containing  critical  raw  materials.  The  Waste  Framework  Directive  is 
complemented by several pieces of sectorial legislation containing obligations for Member 
States  on  how  to  manage  specific  waste  streams,  including  waste  streams  containing 
CRMs. 

  The Extractive Waste Directive (EWD)181 requires any operator responsible for managing 
extractive waste (i.e. the waste generated by mining operations) to obtain a permit. To do 
so, the operator has to draw up and submit to the national authorities a waste management 
plan covering the minimisation, treatment, recovery and disposal of extractive waste. The 
permit will only be granted if the waste management plan meets the EWD’s provisions, 
which include specific requirements for the prevention of water status deterioration, air 
and soil pollution, and if the national authorities are convinced that the relevant operator 
has the means to carry out the commitments laid down in the plan. Moreover, it sets rules 
for the closure and after closure procedures. The EWD also aims to promote the recovery 
of extractive waste by means of recycling, reusing or reclaiming such waste, and required 
that plans to this effect should be included in the waste management plans. 

  The  Waste  Electrical  and  Electronic  Equipment  Directive  (WEEE)182  governs  the 
collection and treatment of devices such as computers, fridges and mobile phones at the 
end  of  their  life.  The  WEEE  Directive  lays  down  rules  to,  as  a  first  priority,  prevent 
electrical and electronic equipment from becoming waste and, in addition, to promote the 
re-use,  recycling  and  other  forms  of  recovery  of  such  waste  so  as  to  contribute  to  the 
efficient use of resources and the retrieval of secondary raw materials including CRMs. To 
that end, the WEEE Directive sets general treatment requirements and contains general 
collection  targets  increasing  over  time  and  applicable  to  all  relevant  waste  equipment 
combined, as well as recovery targets for each one of the categories of WEEE set out in 
that Directive (Annex V), that also increase over time. 

  The End-of Life Vehicles Directive (ELV)183 includes rules for the prevention, collection 
and treatment of waste vehicles and sets targets for the re-use and recycling as well as reuse 
and recovery of components from such vehicles. The ELV also contains obligations for 

179 Commission notice — Commission guidance document on streamlining environmental assessments conducted 
under Article 2(3) of the Environmental Impact Assessment Directive (Directive 2011/92/EU of the European 
Parliament and of the Council, as amended by Directive 2014/52/EU) (europa.eu) 
180 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing 
certain Directives 
181 Directive 2006/21/EC of the European Parliament and of the Council of 15 March 2006 on the management 
of waste from extractive industries and amending Directive 2004/35/EC 
182 Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and 
electronic equipment (WEEE) 
183 Directive 2000/53/EC of the European Parliament and of the Council of 18 September 2000 on end-of life vehicles 

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the provision of information by producers on components and materials used in vehicles, 
in order to facilitate their identification for reuse and recovery. 

Lastly, the European Green Deal sets the goal to protect better human health and the environment 
as part of an ambitious approach towards a toxic free environment.  Substance risk classification 
and control measures under REACH and the Classification, Labelling and Packaging Regulation184 
serve  to  ensure  the  safety  of  chemicals  and  products  containing  chemicals  in  the  EU,  highly 
relevant for base metals and CRM. One recent example is the updated classification of cobalt metal 
according  to  EU  CLP  Regulation  (2020),  to  include  carcinogenicity  category  1B  –  presumed 
human carcinogen (proven in animals), mutagenicity category 2  – suspected of causing genetic 
defects, and   reproductive toxicity category 1B presumed human reproductive toxicant   

International instruments 

o  Critical Raw Material Partnerships taking the form of Memorandum of Understandings 

(MoUs) have been concluded with Canada, Ukraine, Namibia and Kazakhstan.  

o  Trade  defence  instruments185,  such  as  anti-dumping  or  anti-subsidy  duties,  are  ways  of 

protecting European production against international trade distortions. 

o  The objective of the EU's Foreign Direct Investment (FDI) regulation186is to make sure that 
the EU is better equipped to identify, assess and mitigate potential risks for security or 
public order from FDIs. Foreign investments in the CRM value chain may have security 
implications. 

o  WTO  obligations  cover  aspects  such  as  export  restrictions  in  raw  materials,  subsidies, 

dumping, trade in services, etc. 

o  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. 

o  The  Conflict  Minerals  Regulation187,  for  instance,  requires  importers  of  tin,  tantalum, 
tungsten and gold (3TG) to establish and implement due diligence policies in relation to 
potential environmental and human rights including labour rights impacts along their value 
chain. Of these, tantalum and tungsten are currently considered critical. This initiative does 
not include due diligence requirements. 

o  As  an  accompanying  measure  to  the  EU  Conflict  Minerals  Regulation,  the  EPRM 
(European Partnership for Responsible Minerals) targets both upstream and downstream 
actors of the 3TGs supply chains. At downstream level, it wants to assist EU importers in 
ensuring that the minerals used in their supply chain are not contributing to financing armed 
groups, conflict, terrorism, or other violations of human rights. At upstream level, it aims 
at  supporting  particularly  Artisanal  and  Small-Scale  Miners  in  sourcing  countries  to 
conform  to  internationally  accepted  labour  and  social  standards  and  other  basic  human 
rights  principles.  The  EPRM  is  a  multi-stakeholder  partnership  where  Civil  Society 
Organisations,  Industry  and  Governments  come  together  to  find  mutually  beneficial 
solutions.  

184 Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the 
Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and Regulation (EC) No 1272/2008 of 
the European Parliament and of the Council of 16 December 2008 on classification, labelling and packaging of 
substances and mixtures 
185 https://policy.trade.ec.europa.eu/enforcement-and-protection/trade-defence_en 
186 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 79 I , 21.3.2019, p. 1). 
187 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 

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o 

 At  bilateral  level,  all  recently  concluded  trade  and  investment  agreements  have  an 
ambitious Trade and Sustainable Development (TSD) chapter. They aim to ensure that that 
economic  growth  goes  together  with  the  protection  of  human  rights,  decent  work,  the 
climate  and  the  environment.  Those  chapters  refer  to  international  agreements  and 
standards, and establish a close cooperation amongst others in the field of corporate social 
responsibility  and  accountability.  The  Commission  has 
recently  published  a 
Communication setting out how to further enhance the contribution of trade agreements to 
sustainable  development.  Some  recently  concluded  Energy  and  Raw  Materials  (ERM) 
chapters of EU Free Trade Agreements contain specific sustainability provisions. 

o  At  the  multilateral  and  plurilateral  levels,  the  EU  recognises  the  importance  of  and 
promotes  use  of  internationally  agreed  standards  so  as  to  ensure  predictability  for 
businesses.  In  particular  RBC  action  is  included  in  all  TSD  chapters  via  reference  to 
international standards.  

Other regulatory interplay 

  The Council Regulation 2022/2372 “on a framework of measures for ensuring the supply 
of  crisis-relevant  medical  countermeasures  in  the  event  of  public  health  emergency  at 
Union level” provides for the activation of a mechanism that includes measures such as 
monitoring,  stockpiling  or  public  procurement.  Its  scope  covers  “crisis-relevant  raw 
materials”, which may include critical raw materials such as bismouth or titanium, which 
can be used for medical applications and pharmaceuticals.188 
In REPowerEU189, the Commission proposed to increase to 45% the target for the amount 
of renewable energy in the EU’s energy consumption by 2030 in the Renewable Energy 
Directive.190 

 

Interplay with ongoing instruments 

  The  proposed  Single  Market  Emergency  Instrument  (SMEI)  provides  for  a  set  of 
framework measures for anticipating, mitigating and responding to significant impacts of 
crises on the functioning of the Single Market. It aims at safeguarding the free movement 
of  goods,  services,  workers  and  persons  and  ensuring  the  availability  of  crisis-relevant 
goods and services during Single Market emergencies. It includes a general vigilance and 
crisis response mechanism for dealing with unexpected supply disruptions that threaten to 
severely  affect  the functioning  of  the  Single Market in the  next six  months or severely 
disrupt the functioning of the Single Market, where the supply chains are indispensable for 
the maintenance of vital societal interests. It is activated for responding to such a threat or 
emergency  once  the  relevant  criteria  are  fulfilled.  If  defined  through  the  appropriate 
procedures as “goods of strategic importance” or as “crisis-relevant goods and services”, 
critical raw materials may be covered by the instrument’s set of measures.  

  The  Chips  Act  addresses  shortages  of  semiconductors,  proposing  both short-  and  long-
term  measures  to  reinforce  the  Union’s  competitiveness,  resilience  and  innovation 
capacity; ensure a security of supply; coordinate the monitoring of the semiconductor value 
chain and respond to disruptions of their supply. The crisis toolbox proposed in the Chips 
Act may apply to raw materials as well (e.g. in the event a crisis is triggered, common 
purchasing could take place for raw materials required by semiconductor manufacturing 
companies). 

  The proposed Batteries Regulation and Corporate Sustainability Due Diligence (CSDD) 
contain  measures  requiring  companies  to  put  in  place  social  and  environmental  due 
diligence practices when, inter alia, sourcing critical raw materials from both the Single 

188 COUNCIL REGULATION (EU) 2022/2372. of 24 October 2022 
189 (COM/2022/230 final) 
190 Renewable Energy Directive 2018/2001/EU   

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Market and (especially) the international markets. CSDD is the first proposal of its kind 
that introduces horizontal due diligence requirements for larger companies in all sectors to 
identify, prevent, bring to an end, and account for negative human rights and environmental 
impacts in their own operations, subsidiaries and their value chains. It helps companies 
understand their value chains and ensure the sourcing is sustainable while contributing to 
its diversification where necessary. Termination of the business relationship is required 
when,  despite  appropriate  engagement  measures,  resolving  abuses  has  no  reasonable 
prospect. The proposed Batteries Regulation, being product-specific, addresses pressing 
sustainability  concerns  that  are  particularly  salient  as  regards  the  specific  product 
concerned. Both initiatives refer to, inter alia, international conventions related to human 
rights, workers' rights and the environment.  

  The recently proposed revision of the Industrial Emissions Directive (IED) 191 widens the 
scope of the IED to also include the extraction and treatment of industrial minerals and 
metals.  This  aims  to  create  a  transparent  and  inclusive  permitting  process  that  will 
accompany  the  expansion  of  these  activities  and  allow  public  authorities  to  address 
concerns from the public.  

  The  Forced  Labour  proposal,  including  forced  child  labour,  would  complement  this 
approach by banning products produces with force labour from EU market192. Producers 
of critical raw materials are within the scope of the proposal. 

  The EU Strategy on Rights of the Child193 contains commitments to making supply chains 
of EU companies free of child labour, there is an intersection between critical raw materials 
supply chains and increased risk of labour abuses, particularly child labour e.g. in artisanal 
mining settings. 

  Ecodesign  legislation,  including  the  Ecodesign  Directive194  and  the  proposal  for  an 
Ecodesign for Sustainable Products regulation195, aims inter alia at extending the lifetime 
of products, thus contributing to reducing the demand for raw materials, especially critical 
raw materials in e.g. electronics, batteries etc. In the Ecodesign workplan for 2022-24196, 
a  horizontal  measure  on  circularity  of  energy-related  products,  in  particular  recycled 
content,  durability,  and  the  use  of  scarce,  environmentally  relevant  and  critical  raw 
materials, is planned.  

  The proposal for a CBAM Regulation197 aims to prevent the risk of carbon leakage for 
selected energy-intensive sectors by subjecting the import of certain products from third 
countries to a levy linked to the carbon price paid under the EU ETS. The CBAM will 
initially cover five industrial sectors: iron and steel, cement, fertilisers, aluminium, and 
electricity.  The  Commission  has  selected  these  sectors  because  of  their  risk  of  carbon 
leakage, the magnitude of their carbon emissions, and for administrative feasibility. The 
proposal does not cover raw materials processing directly. However, current negotiations 
are  considering  the  possibility  to  include  some  precursors  materials,  meaning  basic 
materials that are used as key inputs in the production of some of the CBAM goods and 
contribute  significantly  to  the  embedded  emissions  of  the  latter.  Precursors  under 
considerations  are  the  following:  coke,  iron  ore  agglomerates,  dolime,  magnesia,  lime, 
some ferro-alloys and alumina. Their inclusion would be conditional on the relevance of 
their emissions to the goods that use them and on their tradability.  If these precursors are 

191 Directive 2010/75/EU 
192 2022/0269 (COD) 
193 https://op.europa.eu/en/publication-detail/-/publication/bac6e66a-a3d9-11eb-9585-01aa75ed71a1/language-en 
194 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 
195 Proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting 
ecodesign requirements for sustainable products and repealing Directive 2009/125/EC. COM/2022/142 final 
196 EUR-Lex - 52022XC0504(01) - EN - EUR-Lex (europa.eu) 
197 Proposal for a Regulation of the European Parliament and of the Council establishing a carbon border adjustment 
mechanism. COM/2021/564 final 

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eventually included in the CBAM scope, their imports into the EU will be subject to the 
CBAM levy. 

  The  Non-Financial  Reporting  Directive  (NFRD)  requires  certain  large  companies  to 
disclose  information  on  the  way  they  operate  and  manage  social  and  environmental 
challenges. This helps investors, civil society organisations, consumers, policy makers and 
other  stakeholders  to  evaluate  the  non-financial  performance  of  large  companies  and 
encourages  these  companies  to  develop  a  responsible  approach  to  business.  The 
Commission’s  proposal  for  a  Corporate  Sustainability  Reporting  Directive  (CSRD) 
extends the scope of the NFRD and envisages the adoption of EU sustainability reporting 
standards. 

Non-regulatory actions on Critical Raw Materials 

To ensure a secure and sustainable supply of critical raw materials, the European Commission has 
in place a dedicated strategy since 2008198, which aims to ensure a fair and sustainable supply of 
raw materials from global markets, within the EU and through resource efficiency and the recycling 
of secondary raw materials. This initiative also launched the assessment of raw materials’ criticality 
every three years, starting in 2011. Such assessment has helped identify the increasing number of 
raw materials that are critical due to their economic importance and the supply risk they face.    

In line with the European Green Deal’s ambition of decoupling the EU’s economic growth from 
resource use, the Commission launched a new Circular Economy Action Plan for a cleaner and 
more  competitive  Europe.199  The  new  Action  Plan  builds  on  the  measures  adopted  by  the 
Commission since 2015, which have contributed to setting the framework conditions, including 
relevant policies and legislation, for moving towards a circular economy. One of the Plan’s goals 
is to create a well-functioning EU market for high-quality secondary raw materials by proposing 
several  actions  that  should  prevent  a  mismatch  between  supply  and  demand  of  secondary  raw 
materials and ensure a smooth expansion of the dedicated recycling sector in the EU. By using and 
consuming in a more circular way, it is possible to not only substantially reduce the impacts of 
human economic activities on the environment, but also achieve the EU’s objective of doubling 
circular material use rate by 2030.200  

Considering  this  assessment  and  the  aforementioned  political  objectives,  the  Commission 
presented  a  dedicated  action  plan  in  the  2020  Communication  on  Critical  Raw  Materials201  to 
develop resilient value chains for EU industrial ecosystems; reduce dependency on primary critical 
raw materials through circular use of resources, sustainable products and innovation; strengthen 
the  environmentally  and  socially  sustainable  responsible  domestic  sourcing  and  processing  of 
critical  raw  materials  in  the  European  Union;  and  diversify  supply  with  environmentally  and 
socially sustainable responsible sourcing from third countries, strengthening rules-based open trade 
in raw materials and removing distortions to international trade.  

In parallel, the Industrial Strategy Update of 2021 initiated a better mapping of where strategic 
dependencies  lie,  their  potential  development  and  their  effects  on  the  EU’s  vulnerabilities.  It 
launched two stages of in-depth reviews that provided further analysis on the origins of strategic 

198 EUR-Lex - 52008DC0699 - EN - EUR-Lex (europa.eu) 
199 Communication A new Circular Economy Action Plan For a cleaner and more competitive Europe COM(2020)98 
(europa.eu) 
200 COM(2020) 98, p. 2. 
201 COM(2020) 474 - Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability 

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dependencies,  notably  addressing  critical  raw  materials202  overall  before  focusing  on  rare  earth 
elements and magnesium203. These reviews also point to the actions and strategies adopted by third 
countries to secure their access to these resources in a context of growing competition for resources. 
The Industrial strategy also highlighted the need for supporting the financing of a green recovery 
and in that context initiatives such as the Directive on corporate sustainability due diligence which 
helps  companies  understand  their  value  chains  and  ensure  the  sourcing  is  sustainable  while 
contributing to its diversification where necessary. 

Partnerships are one of the actions contributing  to security and diversification of supply of raw 
materials, by mitigating the risks posed by structural external dependencies and concentration of 
supply.  The  partnerships  are  structured  around  three  main  pillars:  raw  materials  value  chains 
integration, between the EU and the partner country, the investment and business-oriented pillar; 
alignment on environmental, social and governance standards, the sustainability and accountability 
pillar; and cooperation on research and innovation along the raw materials value chain. In the case 
of developing countries partnerships on raw materials value chains have two additional pillars, with 
a  focus  on  capacity  building,  training  and  skills  along  the  value  chain  and  deployment  of 
infrastructure, in particular renewable energy infrastructure. The partnerships have a roadmap or 
action plan associated, identifying concrete actions of cooperation under each one of the pillars and 
the  timeframe  for  implementation,  in  full  alignment  with  the  Team  Europe  approach.  These 
partnerships are the political umbrella that aggregates existing cooperation actions and new actions 
at member state and EU levels, mobilizing funding instruments and investment, key investment 
entities as EIB, EBRD and the national investment banks. The EU industrial alliances also play a 
key role in the context of the partnerships. 

Until  now  the  EU  has  established  bilateral  partnerships  with  Canada  (2021),  Ukraine  (2021), 
Kazakhstan  (2022)  and  Namibia  (2022).  The  EU  will  continue  to  implement  this  action, 
establishing partnerships with more resource-rich countries, including Norway, Greenland, Chile 
and  Australia.  Further  partnerships  are  considered  with  countries  in  the  EU  neighbourhood,  in 
Africa and Latin America. 

The EU is also part of a multilateral partnership – the Minerals Security Partnership (MSP), a US 
led initiative, launched in spring 2022, aiming to catalysing investment from key partners and the 
private  sector  for  strategic  mining,  processing,  and  recycling  opportunities  that  adhere  to  the 
highest environmental, social, and governance (ESG) standards. Under MSP, the partners share 
information  on  critical  raw  material  developments  in  third  countries,  identify  investment 
opportunities and co-invest in mining, refining and recycling projects covering essential minerals 
for the clean energy transition such as: lithium, cobalt, nickel, graphite, rare earths, manganese and 
copper.  

In 2020, the Commission announced the creation of the European Raw Materials Alliance (ERMA) 
as part of its Action Plan on Critical Raw Materials. The aim of the Alliance, which brings together 
industry, research and technology organisations, civil society, investors and public authorities, is 
to increase the resilience of critical raw materials value chains, further develop industrial capacities 

202 Chapter 5.1 of SWD(2021) 352, Strategic Dependencies and Capacities (check) 
203 Commission Staff Working Document: EU strategic dependencies and capacities: second stage of in-depth reviews 
(SWD(2022) 41 final)   

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and diversify sources of supply. In 2021, ERMA published its action plan that presents a list of 
specific actions and industrial projects in the area of rare earths and permanent magnets204.  

The  Clean  Technology  Materials  Task  Force  was  established  in  October  2021205  to  mobilise 
funding and financing for investments in the critical raw materials value chain, to create a joint 
platform and to implement a structured dialogue between the Commission, industrial alliances and 
investors (i.e. European Investment Bank, European Bank for Reconstruction and Development, 
National Promotional Banks and Institutions). 

There are also ongoing efforts to increase awareness, acceptance and trust when it comes to EU 
sourcing.  For  example,  the  EU  principles  for  Sustainable  Raw  Materials  were  published  in 
September 2021 aimed at aligning Member States’ understanding of sustainable EU extraction and 
processing206.  

In  addition,  in  line  with  the  2021  Action  Plan  on  Synergies  between  civil,  defence  and  space 
industries, the Commission is setting up the Observatory of critical technologies. The Observatory 
will  identify,  monitor  and  assess  critical  technologies  for  the  space,  defence  and  related  civil 
sectors, their potential application and related value and supply chains. It will also identify, monitor 
and analyse existing and predictable technology gaps, root causes of strategic dependencies and 
vulnerabilities. 

Finally, EU research and innovation (R&I) is another important avenue to reduce dependencies. 
EU  R&I  projects  on  critical  raw  materials  help  to  develop  domestic  technological  solutions, 
academic  expertise,  skills  for  students  and  workers,  company  know-how  and  IP.  This  enables 
refining, processing and recycling critical raw materials in a more sustainable and efficient way, 
also  as  a  supplier  of  these  technologies  to  third  countries.  The  scope  of  the  projects  is  the  full 
critical  raw  materials  value  chain:  exploration,  extraction,  processing,  refining,  recycling, 
substitution as well as non-technological projects on capacity building. 

There are also two Commission expert groups which cover raw materials: 

Raw Materials Supply Group 

The creation and functioning of the Raw Materials Supply Group is governed by the horizontal 
rules published in Commission communication C(2010) 7649 on 10 November 2010. 

The mission of the Raw Materials Supply Group is to exchange of views on the competitiveness 
and sustainable development of the non-energy extractive industry (NEEI). To analyse, discuss and 
exchange views on the supply of raw materials, with a focus on the sustainable competitiveness of 
the  NEEI  sector.  Subgroups  provide  support  for  the  legislator  in  the  development  and 
implementation of EU legislation and policies and develop actions to improve sector sustainability. 

EIP Raw Materials 

The European Innovation Partnership on Raw Materials was set up by a Communication from the 
European Commission (COM(2012) 82) to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of the Regions.  

204 Rare Earth Magnets and Motors: A European Call for Action. A report by the Rare Earth Magnets and Motors 
Cluster of the European Raw Materials Alliance. Berlin 2021 
205 ERMA celebrates its first anniversary working towards a more resilient and greener Europe 
206 Commission européenne, Direction générale du marché intérieur, de l’industrie, de l’entrepreneuriat et des PME, 
EU principles for sustainable raw materials, Publications Office, 2021, https://data.europa.eu/doi/10.2873/27875 

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The  European  Innovation  Partnership  on  Raw  Materials  (henceforth  "the  EIP")  has  been 
instrumental in implementing the EU raw materials policy. It has been the main channel to reach 
out to high-level representatives from industry, public services, academia and NGOs as well as to 
wide expert community. Its mission is to provide high-level guidance to the European Commission, 
EU Member States and private actors on innovative approaches to the challenges related to all non-
energy, non-agricultural raw materials (primary and secondary, biotic and abiotic). 

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ANNEX 9: SCOPE OF MEASURES 

TABLE 4: Correspondence table: pillars, actions and scope of the Critical raw materials Act 
Pillars 
Materials scope 
A.  Defining  critical  and 
strategic raw materials 
B.  Setting  strategic  raw 
materials targets 
C.1 Monitoring and risk 
assessment 

Assessment of criticality and strategic dimension 

Targets for EU capacity  

- 

- 

Risk assessment 

C.2 Strategic stocks 

EU level coordination and assessment of MS stocks 

risk 

C.3  Company 
preparedness 
D. Exploration efforts in 
the EU 

E.  Support  to  the  value 
chain 

to  set 

incentives 

Member  States 
companies’ resilience 
Requirement  for  MS  to  develop  and  implement 
public exploration programmes 

foster 

to 

Selection of Strategic Projects, in the EU and abroad 

raw 

strategic 

Only 
materials 
All  non-energy,  non-
agricultural raw materials 
Only 
raw 
strategic 
materials 
Only 
materials 
Only 
materials 

strategic 

strategic 

raw 

raw 

All critical raw materials 

Only 
raw 
strategic 
materials  (also  as  by-
products) 

CRM projects to be considered in spatial planning   All critical raw materials 
raw 
Mandatory  measures 
Strategic Projects more predictable 
Access to funding instrument 

to  make  permitting  for 

Only 
materials 

strategic 

All critical raw materials 

Privileged access to funding instrument 

F.  Waste legislation 

Enabling measures and targeted revisions to waste 
legislation 

G.  Actions  on  standards 
for 
raw 
the  critical 
materials value chain  

Increase  efforts  to  have  EU  rules  and  principles 
reflected  in  international  standards  +  Mandate 
development  of  standards  and  standardisation 
deliverables regarding relevant industrial processes 

H. 
Environmental 
footprint  of  critical  raw 
materials  

requirements 

for  certification 
Set  minimum 
schemes  for  sustainable  CRMs  + 
  Require 
declaration  of  environmental  footprint  for  CRMs 
sold  in  the  EU  incl.  a  mechanism  for  setting 
performance classes and maximum thresholds 

strategic 

Only 
materials 

raw 

All critical raw materials 

All critical raw materials 
raw 
strategic 
(but 
be 
materials 
the 
prioritised 
of 
development 
methodologies) 

could 
in 

All critical raw materials 

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ANNEX 10: EXTENDED INFORMATION ON THE PROBLEM SECTION 

9.1.14. 

Context 

9.1.14.1.  The green and digital transitions, as well as defence investments, depend 
on critical raw materials, leading to vastly increased demand in the EU and 
globally 

The shift to a clean energy system, accelerated by the ongoing energy crisis, relies on decarbonised 
and  notably  renewable  electricity  produced  from  wind  turbines  and  solar  panels,  transported 
through electrical grids, stored in batteries and hydrogen and used in electric vehicles and various 
other end applications, including heavy industry. The technologies that will realise the green and 
digital  transitions  require  materials  with  very  specific  properties.  These  properties  make  the 
products  more  efficient  or  performant  and  cannot,  in  many  cases,  easily  be  replaced  by  other 
materials207. For instance, rare earth permanent magnets used in wind turbines and electric motors 
are more compact, resistant and efficient at converting energy; most solar panels are made out of 
silicon and certain doping elements; batteries that contain manganese, nickel and cobalt can store 
more energy at less weight compared with other various chemistries, making them ideal for use in 
electric vehicles; hydrogen electrolysers and fuel cells rely on platinum group metals to catalyse 
the chemical  reactions taking  place in them;  connecting  all  of this  are electrical  wires  made  of 
copper and aluminium208. 

As the world shifts its energy systems to clean energy, demand for these raw materials is therefore 
projected to grow multiple times. At EU level, the JRC foresight report on Critical Raw Materials 
for  Strategic  Technologies  and  Sectors209  shows  that,  with  the  current  state  of  technology,  the 
accomplishment  of  EU  targets  for  the  rollout  of  batteries,  fuel  cells,  wind  turbines  and 
photovoltaics would require multiples of the current demand for lithium, graphite, cobalt, nickel 
and the rare earth elements dysprosium, neodymium and praseodymium (figure 2).210  

207 The Commission‘s work on the criticality of raw materials assesses price, performance, availability, production and 
criticality of substitutes per material. 
208 As explained in Textbox 1 and in more detail in section 5.2 and annex 5, copper, nickel and aluminium are not 
critical raw materials according to the current methodology, but likely candidates for the strategic raw materials list 
(and by implication of the future critical raw materials list). The other raw materials mentioned here are all currently on 
the critical raw materials list. 
209 EC, 2020. Critical materials for strategic technologies and sectors in the EU - a foresight study. 
https://rmis.jrc.ec.europa.eu/uploads/CRMs_for_Strategic_Technologies_and_Sectors_in_the_EU_2020.pdf 
210 Note: Of these, only nickel is currently not classified as a critical raw material in the EU, but again likely to enter 
the proposed future list by virtue of its strategic importance and demand growth. 

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Figure 2: Material consumption for batteries, fuel cells, wind turbines and photovoltaics in 2030 
and 2050 as a multiple of current (2020) EU consumption of the material in all applications211 

At the global level, the International Energy Agency (IEA)’s 2021 Clean Energy Minerals report212 
predicts that total mineral demand213 will increase by a multiple of between 2 and 4 times between 
2020 and 2040,214 and demand for battery-related materials such as lithium up to 42 times. Clean 
energy  technologies  are  set  to  emerge  as  a  major  force  in  driving  demand  growth  for  critical 
minerals and the market value of energy transition minerals could overtake that of the global coal 
business sometime in the 2030s.215 

For the digital transition, there has been less attention so far to the implications of the exponential 
growth  of  digital  technologies  to  the  demand  for  critical  raw  materials.  However,  the 
aforementioned JRC foresight study216 identifies important dependencies of digital technologies 
including robotics, drones, 3D-printing, semiconductors and hard drives on critical raw materials. 
The exponentially growing number of chips and devices produced each year suggest that the digital 
sector could become a driving force for some critical raw materials: For tantalum, electronics is 
currently the main application and the growth of demand from this one sector could soon outpace 

211 EC, 2020. Critical materials for strategic technologies and sectors in the EU - a foresight study. 
https://rmis.jrc.ec.europa.eu/uploads/CRMs_for_Strategic_Technologies_and_Sectors_in_the_EU_2020.pdf. Note: 
The different shadings refer to the low, medium and high-demand scenarios included in the report. The full height of 
the bars thus refers to the high-demand scenario. ** of refined supply (Stage II) instead of ore supply (Stage I) *** 
increase in demand of all graphite in relation to natural graphite 
212 IEA (2021), The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris https://www.iea.org/reports/the-
role-of-critical-minerals-in-clean-energy-transitions 
213 Including chromium, copper, lithium, nickel, cobalt, manganese, graphite, molybdenum, platinum group metals, 
zinc and rare earth elements. 
214 Page 46 of IEA (2021): Clean Energy Minerals. 
215 Page 47-48 of IEA (2021): Clean Energy Minerals. 
216 EC, 2020. Critical materials for strategic technologies and sectors in the EU - a foresight study. 
https://rmis.jrc.ec.europa.eu/uploads/CRMs_for_Strategic_Technologies_and_Sectors_in_the_EU_2020.pdf 

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its current use in all applications. Similarly, indium, used in electronic displays and touch screens, 
has experienced a more than fivefold growth in primary production between 1993 and 2013.217 At 
the same time, it is of growing concern due to the lack of substitutes, its extraction as a by-product 
from carrier metal ores, low recovery efficiency of processing and non-existent recycling at end of 
life.218 

In  addition,  the  intensifying  geopolitical  instability  has  increased  the  focus  on  ensuring  EU’s 
security and resilience. This has translated into increased defence budgets and defence procurement 
plans219  and  a  need  for  industrial  ramp  up220  but  also  heightened  attention  to  ensure  EU’s 
autonomous access to space, including concerning the protection and development of the EU space 
assets,  which  constitute  EU  critical  infrastructure. Against  this  background,  the  JRC  foresight 
report  provides  an  assessment  of  the  raw  materials  dependencies  of  the  defence  and  aerospace 
sector: “As with many other economic sectors, the EU defence industry relies on the use of a wide 
range  of  materials  with  unique  properties  that  make  them  essential  for  the  manufacture  of 
components used in military applications because the use of substitutes does not always guarantee 
the  same  performance.  For  example,  REE  [rare  earth  elements]  are  indispensable  in  remotely 
piloted aircraft systems, precision guide munitions, targeting lasers and satellite communications. 
[…] High-performing alloys that are used, for instance, in fuselages of combat aircraft, require 
specific  raw  materials  such  as  niobium,  vanadium  or  molybdenum.  Other  alloys  are  based  on 
titanium, which provides high specific strength and corrosion resistance, at just half the weight of 
steel  and  nickel-based  super-alloys.”  Regarding  space  applications,  rare  gas  (e.g.  high  purity 
helium)  are  used  for  propulsion  and  lasers  and  show  significant  import  reliance.  Further 
investigations  might  be  also  needed  for  germanium  substrates  combined  with  gallium  arsenide 
semiconductors, which enter in the composition of highly efficient solar cells used for satellite PV 
panels.221  This  being  said,  the  demand  for  raw  materials  used  in  the  production  of  defence 
applications is relatively a very small share of total raw materials consumption but important due 
to  the  considerable  global  rise  in  defence  and  security  investment  after  the  Russian  aggression 
against Ukraine. 

Textbox 3: Can material demand mitigation measures offset the need for more critical raw 
materials? 

The projections discussed in this chapter rely on certain assumptions regarding economic 
growth, technological development and consumption patterns. Many stakeholders (in the 
context of the open public consultation and the call for evidence) have emphasised the need 
to critically assess these assumptions to identify whether the EU’s increasing demand for 
critical raw materials could be offset by putting greater attention on demand mitigation and 
behaviour change. 
Indeed, technological innovation has led to higher material efficiency also for critical raw 
materials: Over the past 15 years, the amount of platinum used per kW fuel cell capacity 
has declined by 80-90% in the automotive sector and there are plans to decrease this amount 

217 Tercero, L., Report on the Future Use of Critical Raw Materials. SCRREEN Project D.2.3, 2019. Quoted following 
EC, 2020. Critical materials for strategic technologies and sectors in the EU - a foresight study. 
218 Ciacci, L., T.T. Werner, I. Vassura, and F. Passarini, ‘Backlighting the European Indium Recycling Potentials’, 
Journal of Industrial Ecology, Vol. 23, No. 2, 2019, pp. 426–437. Quoted following EC, 2020. Critical materials for 
strategic technologies and sectors in the EU - a foresight study. 
219 In particular, according to the European Defence Agency's data, defence spending within the EU grew in 2021 to 
€214 billion. This is a 6% increase compared to 2020.  
220 Joint Communication on the defence investment gaps analysis and way forward of 18 May 2022, JOIN(2022) 24 
final 
221 Joint foresight report of JRC and GROW (update in preparation). 

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further.222 In the case of batteries, a clear trend to reducing the quantity of cobalt due to 
price and sustainability concerns is visible,223 though this goes hand in hand with a higher 
consumption of nickel, which while not currently on the EU’s list of critical raw materials 
is among the materials considered at risk of future short supply.224 There are also efforts by 
wind turbine and electric vehicle motor manufacturers to reduce the quantity of rare earths 
in permanent magnets, though these show trade-offs between compactness, reliability and 
CRM content.225 
In  terms  of  behavioural  changes,  the  two  most  relevant  scenarios  would  be  decreased 
electricity  demand  and  a  shift  in  mobility  patterns,  potentially  including  greater  use  of 
public  transport,  shared  mobility  services  and  autonomous  vehicles  –  as  electricity 
generation and mobility are the dominant sectors driving increasing demand for critical raw 
materials. As regards electricity consumption, projections aligned with the EU’s 2030 and 
2050 climate and energy goals assume that total electricity demand in the EU will increase, 
from 2900 TWh in 2018 to 3100 TWh by 2030 and to 6900 TWh by 2050.226 This is despite 
significant energy efficiency increases being assumed in the scenario, and mainly due to 
the  significant  increase  in  electricity  demand  for  electric  mobility,  heat  pumps  and  the 
production of hydrogen and e-fuels. Since political targets for the expansion of renewable 
energy  have  been  set,  it  can  additionally  be  assumed  that  a  reduced  electricity  demand 
would  lead to  a faster  phase-out  of  fossil fuel-based  electricity  generation  rather  than a 
decreased  demand  for  renewable  energy  technologies  and  the  critical  raw  materials 
embedded in them.  
As for changes in transport patterns, the JRC’s Future of Road transport reviews different 
studies and scenarios on the impact of car sharing, automated vehicles and societal attitudes 
to transport systems.227 It concludes that “Both a decline or increase in travel activity are 
possible,  depending  on  the  new  opportunities  enabled  by  disruptive  technologies  and 
services, although the evidence until now suggests that increases in vehicle travel activity 
are likely to occur for both passenger and freight transport.” It also highlights the existence 
of rebound effects and induced demand from cheaper travel in connected and autonomous 
vehicles, and the potential for new business models to extending the lifetime of electric 
vehicle batteries through remanufacturing and repurposing. 
While  both  the  IEA  and  JRC  studies  cited  in  this  chapter  do  not  explicitly  account  for 
uncertainties related to behaviour change,228 they do take into account and provide different 
scenarios  regarding  technological  developments,  including  substitution  of  critical  raw 
materials, and speed of uptake of clean energy technologies. Figure 3 (left), for example, 
shows the size of the electric vehicle/plug-in hybrid electric vehicle fleets assumed in the 
low-, medium- and high-demand scenarios of the JRC foresight study.229 Figure 3 (right) 
shows  the  impact  of  different  technological  assumptions  for  renewables-  and  network-
related technologies on demand for copper, silicon and rare earth elements in the IEA study. 

222 These numbers refer to the case of the Toyota Mirai, for which the use of platinum declined by three quarters and 
then by another third from the prototype in 2008 to the second generation in 2020. Source: Page 113-115 of IEA 
(2021): Report on Clean Energy Minerals/James et al., 2018. 
223 Page 90-92 of IEA (2021): Report on Clean Energy Minerals 
224 Page 118 of IEA (2021): Report on Clean Energy Minerals; KU Leuven/Eurometaux (2022): Clean Energy Metals. 
225 JRC (2020): The role of rare earth elements in wind energy and electric mobility 
226 Source: Impact Assessment accompanying the Communication “Stepping up Europe's 2030 climate ambition 
Investing in a climate-neutral future for the benefit of our people”, SWD(2020) 176 final. 
227 JRC, 2019. The future of road transport - Implications of automated, connected, low-carbon and shared mobility, 
doi: 10.2760/668964, JRC116644. 
228 Source: Page 86 of IEA (2021): Clean Energy Minerals; information provided by JRC. 
229 JRC (2020): Critical materials for strategic technologies and sectors in the EU - a foresight study. 

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Figure 3230 
In conclusion, there is much scope for material efficiency improvements, substitution and 
behaviour  change  to  reduce  the  demand  for  critical  raw  materials.  Such  efforts  can  be 
supported not only through research funding but also through business model innovation 
and greater societal awareness. While such developments would somewhat alleviate the 
pressure, the scenarios considered in the aforementioned studies show that, while the exact 
level  varies,  a  significant  and  challenging  growth,  adding  to  the  already  high  supply 
concentration  today,  is  certain.  A  different  question  is  from  which  sources  (primary  or 
secondary raw materials production) this demand is met. This is discussed in the following 
section.  

9.1.14.2.  Significant supply-demand gaps for critical raw materials are projected 

in the medium term 

While global demand is set to increase significantly for a wide range of raw materials used in clean 
energy and digital technologies, and more dramatically for a smaller set of raw materials used in 
batteries and permanent magnets, global supply is currently not projected to grow sufficiently to 
meet this demand without substantial price increases.231 According to the IEA Report on Clean 
Energy  Minerals,  the  required  level  of  supply  growth  for  most  minerals  under  the  Sustainable 
Development  Scenario  (SDS)  is  well  above  the  levels  seen  in  the  past  decade.  For  example, 
between 2020 and 2040, annual average demand growth for nickel and cobalt is projected to be 
two and five times higher, respectively, than the levels seen between 2010 and 2020.232  

As explained in textbox 3, the raw materials value chain consists of different steps, each of which 
require  significant  time  and  investments  to  build  up  or  expand.  Supply  and  investment  plans 
analysed by the IEA show a gradual increase in production over the next years, but these are far 
from sufficient to support accelerated energy transitions (e.g. for lithium, mines currently operating 
or under construction are set to produce around 1 000 kt of lithium carbonate equivalent but the 
primary  demand  under  the  SDS  will  be  around  2  600  kt).233  Several  factors,  including  project 
development lead times, declining ore quality, increased ESG scrutiny and climate risks, are likely 
to hinder or delay the supply expansion necessary to meet demand.234 Additionally, the fact that 
many critical raw materials are produced as a by-product of other raw materials (e.g. gallium and 

230 Left: Page 21 of JRC foresight report; right: Page 52 of IEA (2021): Clean Energy Minerals. 
231 It should be noted that this perspective, because it focuses on project pipelines, does not take into account economic 
incentives for expanded production (for the supply side) or reducing consumption (for the demand side). However, 
several factors mentioned in this section (notably the long lead times, and the by-product relationships) make it likely 
that the current pipeline.  
232 Page 120 of IEA (2021): Clean Energy Minerals. 
233 Page 119 of IEA (2021): Clean Energy Minerals. 
234 Pages 122-131 of IEA (2021): Clean Energy Minerals. 

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germanium as a by-product of copper production), makes their supply inflexible, as their supply 
depends on the economic incentives to produce their higher-volume carrier metals. 

Textbox 4: Stages of the critical raw materials value chain 
Most critical raw materials are metals and follow a typical value chain, shown in Figure 4. The 
first  stage,  exploration,  consists  in  identifying  a  deposit  of  a  certain  mineral  or  metal  and 
ascertaining that it is technically and economically recoverable. Based on general exploration 
by  public  authorities  (geological  surveys)  and  research  institutions,  exploration  companies 
conduct  targeted  exploration  through  geological  mapping,  geophysical  surveys,  geochemical 
surveys and drilling.  While not the most capital-intensive, this stage is characterised by high 
risk, as only a fraction of exploration ventures lead to successful mining projects.235 Companies 
are categorised into junior (which are often founded for one specific exploration project, usually 
have no operating revenue and rely on equity financing) and major, or senior, companies (who 
are already active in the mining business, finance themselves mainly from operating cash flow 
and often buy projects from junior companies once their viability has been demonstrated). 
The  following  stage  is  mining,  or  more  generally  extraction,236  i.e.  the  development  of  the 
actual mine and of the surrounding infrastructure, as well as its operation. The development of 
mining  projects  can take  a  long  time  –  according  to the  IEA  on  average  over  16  years  from 
discovery to first production but with strong variation by country and raw material237 – and is 
capital-intensive and risky, as uncertainties surrounding the ore quality, cost increases, market 
swings and problems with permitting or social resistance can still lead projects to fail. In this 
time, the site has to be planned, its environmental impacts assessed, feasibility studies conducted 
(in  multiple  rounds,  from  an  initial  economic  assessment  to  a  bankable  feasibility  study, 
reflecting  greater  knowledge  of  the  orebody,  the  design  of  the  operation  and  the  project’s 
financing structure of the project) and permits requested.  
In  the  processing  stage,  which  may  be  located  on  the  same  site  as  the  mine  or  elsewhere, 
depending on the mineral and the site’s specificities, the ore that has been extracted at the mining 
stage is  beneficiated, i.e. separated from economically worthless material, through crushing, 
roasting, magnetic separation, flotation or leaching, to get an ore concentrate (this is the “mineral 
processing” stage shown in figure 4). A second step in getting from ore to metal, sometimes 
included under the heading of processing, is the smelting or refining step. Operations here are 
metallurgical,  and  can  be  classified  into  hydrometallurgy  (involving  aqueous  solutions), 
pyrometallurgy  (high-temperature  processes)  and  electrometallurgy  (involving  electrical 
energy). The result of this process is a purified metal or metal compound, with the level of purity 
achieved  depending  on  the  required  grade.  This  stage,  especially  the  smelting/refining  part, 
requires significant amounts of energy. While generally not as impactful on the environment, 
also  this  stage  requires  substantial  investment  into  specialised  industrial  plants,  which  also 
require permits. The level of risk, and the margins for producers, are generally smaller than at 
the processing stages, though also affected by fluctuations in material prices, and in particular 
of energy prices. 
While the manufacturing step depends very much on the application (from steel and alloying 
plants to chemical operations, battery manufacturing and many more), the recycling stage again 
revolves around raw materials and has some typical features: After collection and, depending on 
the waste stream, sorting and removal of hazardous waste, material recycling is done in smelting 
plants,  sometimes  in  specialised  recycling  smelting  plants,  sometimes  through  mixing  of 

235 Several studies have estimated that the success rate of mineral exploration varies from 0.03% to less than 1%. This 
means that only 1 exploration target will get to the development phase out of a variable amount of exploration targets 
(3000 to 100). Source: Regueiro y González-Barros, Manuel & Espi, Jose. (2019). The returns on mining exploration 
investments. BOLETÍN GEOLÓGICO Y MINERO. 130. 161-180. 10.21701/bolgeomin.130.1.010. Also: Minerals 
Intelligence Capacity Analysis : Fact Sheet exploration stages, 163b11a7-d944-494e-a21e-a8f81ce8b175 (geus.dk) 
236 For lithium, for example, liquid brine extraction is a common extraction method. However, it is similar to mining in 
most of the described characteristics. 
237 Page 12 of IEA (2021): Clean Energy Minerals 

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primary and secondary inputs (which, depending on the composition of the inputs, can often 
meet the same quality requirements as the primary production). This means that the recycling 
stage is in many respects identical to the smelting stage, exposed to high energy costs and relying 
on  specialised  installations.  The  main  added  difficulty  relates  to  the  proper  and  separate 
collection that has to precede any recycling, as well as the complexity of the manufactured goods 
to be recycled where 1) the metal to be recycled is too low in concentration (by design) to be 
economically  retrieved  and  2)  the  metal  compounds  or  alloys  artificially  created  during 
manufacturing  process  can  be  much  more  complicated  to  dissemble  than  naturally  occurring 
ones.238  

Figure 4239  
Description based on: The stages of mining: 5 lifecycle processes explained  - Crux Investor; 
Canada’s  critical  minerals  strategy:  Discussion  paper  -  Canada.ca;  Exploration  Methods: 
Common  Ground  (nsw.gov.au);  Canadian  Mineral  Exploration  Information  Bulletin 
(nrcan.gc.ca); Materials processing | Definition, Examples, Types, & Facts | Britannica 

A  study  by  KU  Leuven/Eurometaux  on  “Metals  for  Clean  Energy”  (2022)240  provides  detailed 
projections on both supply (operating, base case and best case) and demand (based on the IEA 
scenarios and different assumptions regarding the EU’s role in the different steps of clean energy 
value  chains)  for  aluminium,  copper,  nickel,  zinc,  silicon,  lithium,  cobalt,  and  the  rare  earth 
elements dysprosium, neodymium and praseodymium.241 On this basis, it identifies that for copper, 
lithium, nickel, cobalt and the three rare earth elements, even the current best case supply scenario 
would not allow to meet demand under the IEA’s Sustainable Development Scenario during the 
decade 2020-2030242, such that supply bottlenecks could lead to commodity price fly ups, or will 
need further increased innovation and substitution efforts and consumption changes. In the worst 
case, this could lead to a delay of technology updates.  

The study takes into account the contribution of secondary raw materials supply, based on available 
supply from products coming to their end-of-life and assumed average recycling rates. It projects 
that secondary raw materials supply could satisfy a growing share of demand by the 2030s, achieve 
peak primary metals demand in Europe around 2040, and, by 2050, provide more than half of the 
demand for most analysed metals, and over 75% for lithium and rare earths. In the short to medium 
term,  however,  secondary  raw  materials  production  will  not  be  able  to  make  a  significant 
difference, as the strong growth of renewable energy and electric mobility has only begun recently, 

238 Ferrous and non-ferrous recycling: Challenges and potential technology solutions. Leslie Brooks Gabrielle Gaustad 
Adam Gesing Teija Mortvedt and Felipe Freire. https://doi.org/10.1016/j.wasman.2018.12.043 
239 Future of Mining, Mineral Processing and Metal Extraction Industry | SpringerLink 
240 KU Leuven/Eurometaux (2022): Metals for Clean Energy. Metals Clean Energy (eurometaux.eu) 
241 Of these, silicon, lithium, cobalt, and the rare earth elements are currently on the EU’s List of critical raw materials, 
while aluminium, copper, nickel, zinc are not. 
242 Note: For aluminium, the best case supply would be sufficient, but not the base case, such that further investment is 
required. For zinc and silicon, no issues are expected. 

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and  therefore  the  amounts  that  can  be  recovered  in  the  next  years  would  not  grow  as  fast  as 
demand.243 

Focusing  on  the  EU’s  ambitions  for  renewable  energy,  the  demand  for  rare  earth  permanent 
magnets will increase five-fold compared to present levels to meet REPowerEU’s objectives of 
tripling wind power capacities by 2030.244 This comes in addition to a projected increase of EU 
demand from e-mobility as rare earth permanent magnets are used in the traction motors of electric 
vehicles.  However,  the  global  supply,  determined  by  reserves  and  presently  planned  projects, 
would only double by 2030, which is likely to be insufficient to meet the global and EU demand.245 
This potential gap extends to other critical raw materials, notably to battery raw materials. Based 
on current projections and planned capacities, demand would not be met by corresponding supply 
for lithium, cobalt, manganese and nickel.246 

All projections therefore underline the need to expand primary production, and to ensure EU access 
to it. Furthermore, the need to develop domestic circular supply chains is crucial as well as the 
development  and  deployment  increasingly  of  new  technologies  that  need  less  of  these  critical 
materials and or allow for larger amounts of reuse and recycling. 

9.1.14.3.  Supply of critical  raw materials  at both  the  extraction  and  processing 

stage is highly concentrated  

Figure  5  shows  the  supply  concentration,  along  with  the  level  of  governance  of  producing 
countries,  

243 KU Leuven/Eurometaux: Metals for Clean Energy. 
244 “Supply chain challenges: Wind Turbines and magnets” Science for Policy Brief, 1 July 2022, Joint Research Center, 
European Commission” Note: The over-proportional increase in demand for rare earth elements stems from the fact 
that in particular the offshore and large-scale wind turbines contain large amounts of rare earth elements.  
245 Idem.   
246 “Supply chain challenges: batteries” Science for Policy Brief, 1 July 2022, Joint Research Center, European 
Commission”.  Note that nickel is currently not on the EU List of critical raw materials. 

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Figure 5: Geographical concentration of global production (upper bar for each material) and supply 
to  the  EU-27  (lower  bars)  (average  2012-2016)  and  the  corresponding  governance  level  in 
producing countries (2016).247 

It is important to note that in addition to a concentration of the share of supply in certain countries, 
risks may also exist due to supply-side concentration where certain companies represent a large 
share of supply to the EU of a given critical raw material. This may be the case where companies 
own  mining  and/or  refining  assets  across  multiple  countries.  Similarly,  problematic  supply 
concentration may occur where a certain third country (for example via state-owned enterprises) 
controls mining and/or refining assets not just in the country itself, but also across other countries. 

Figure 6 from the IEA Clean Energy Minerals report shows this more vividly for a smaller set of 
raw  materials248:  At  both  the  extraction  and  the  processing  stage,  there  is  a  higher  level  of 
concentration  than  for  the  main  fossil  fuels.  Also  noteworthy  is  that  while  different  countries 

247 Source: JRC Raw Materials Scoreboard 2021, Indicator 9: Geographical concentration and governance 
248 IEA (2021): Clean Energy Minerals. Note again that Copper and nickel are not currently on the EU List of critical 
raw materials but at risk of short supply in the future. 

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dominate the extraction stage, China has gained a dominant position at the processing stage for all 
of them.249  

Figure 6: Share of top three producing countries in production of selected minerals and fossil fuels 
(IEA)250  

Overall,  the  context  suggests  that  critical  raw  materials  markets,  which  are  already  highly 
concentrated, are likely to be put under strain by significantly increased demand, to which supply, 
especially  in  the  EU,  is  expected  to  only  be  able  to  react  gradually.  This  will  likely  lead  to  a 
sustained period of economic and geopolitical competition as well as high and volatile prices for 
critical raw materials – putting the EU’s secure and sustainable access to critical raw materials at 
risk. 

9.1.15. 

Consequences of the problem 

If the EU does not contribute to the need of ramping up CRM globally by developing alternative 
European  sourcing  of  CRMs, the  EU’s  reliance  on highly  concentrated imports  might  continue 
with the corresponding identified risk for the EU economy:  

9.1.15.1.  Risk of future geopolitical vulnerability 

A new geopolitics of resources is emerging, where critical raw materials such as lithium or rare 
earths could take the role that oil and gas held in the fossil fuel economy.251 While their direct 
economic value is currently significantly smaller, it is projected that the market size for a set of 
raw materials used in energy applications could overtake the global coal business in the 2030s252. 
They are also significantly more concentrated in their sourcing and/or processing than fossil fuels 
(see figure 6 above).  

249 See also: Castillo, Purdy (2022): China’s Role in Supplying Critical Minerals for the Global Energy Transition. 
What Could the Future Hold? LTRC_ChinaSupplyChain.pdf (brookings.edu) 
250 IEA (2021): Clean Energy Minerals. The Role of Critical Minerals in Clean Energy Transitions – Analysis - IEA 
251 Cf. 2022 State of the European Union speech 
252 Cf. page 10 of IEA (2021): Clean Energy Minerals. Note that this figure includes copper, nickel and manganese, 
which are currently not listed on the EU’s List of critical raw materials. 

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In case of future geopolitical tensions, exports of critical raw materials to the EU could be curtailed, 
where  the  resulting  shortage  and  price  spike  could  lead  to  economic  disruptions.  The  clearest 
example of this occurred in September 2010, when China, in the context of a territorial dispute 
with Japan over the Senkaku islands, halted all exports of rare earth elements to Japan. While only 
temporary  and  subsequently  settled  through  WTO  dispute  settlement,  this  disrupted  industrial 
production in Japan, triggered a significant price spike on global markets and led to global efforts 
to find alternatives to the Chinese-dominated rare earths value chain.253 Another example of this 
dynamic is the ongoing energy price crisis resulting from Russia’s military aggression in Ukraine: 
Prior to the war, Russia supplied 40% of the EU’s natural gas consumption.254 The ongoing crisis 
and recession are a demonstration of how costly and politically challenging the replacement of one 
dominant supplier in a vital input to our economy is. Russia, importantly, is also a major exporter 
of some critical raw materials, notably of palladium and nickel,255 imports of which to the EU have 
not been covered by sanctions. Geopolitically relevant supply risks are also evident in the area of 
defence and aerospace, where the EU is currently highly dependent on imports of certain critical 
raw  materials  that  are  used  in  military  and  aerospace  equipment.  For  example,  the  import 
dependence for titanium metal (with a majority of aerospace-grade titanium coming from Russia 
in 2022) and beryllium, used in air- and spacecraft, is 100%, and for tungsten, used in weapons and 
ammunition,  59%,  and  supply  for  both  is  also  highly  concentrated256.  These  metals  are  also 
important for other sectors of the EU economy. 

9.1.15.2.  Risk of adverse environmental and social adverse effects 

If  not  properly  managed,  extraction,  processing  and  waste  treatment  operations  of  critical  raw 
materials,  can  have  negative  impacts  on  the  environment  and  on  populations  living  close  to 
them.257The EU’s import dependency means that these impacts mostly happen in third countries, 
often  with  relatively  low  levels  of  governance258,  and  that  CRM  use  is  associated  with  high 
transport emissions. The  negative  impacts  associated  with producing  CRMs  have  to  be seen  in 
perspective  with the  positive  environmental effects  of  their  applications (clean energy,  reduced 
fossil fuel extraction, digitally enabled services, etc.). However, if left unmitigated, the potential 
impacts  (e.g.  water  use,  loss  of  ecosystems  and  biodiversity)  associated  with  an  exponential 
increase  in  the  use  of  critical  raw  materials,  notably  in  these  third  countries,  would  still  risk 
undermining the achievement of EU and international objectives to transition to a climate neutral 
economy with low environmental impacts overall.  

253 Guillame Pitron (2022) The Geopolitics of the Rare-Metals Race, The Washington Quarterly, 45:1, 135-150, DOI: 
10.1080/0163660X.2022.2059146 (p.140) 
254 In focus: Reducing the EU’s dependence on imported fossil fuels | European Commission (europa.eu) 
255 The supply of critical raw materials endangered by Russia’s war on Ukraine (oecd.org); Securing EU critical raw 
material supplies after Russia’s war | Comment | Encompass (encompass-europe.com). Note that nickel is not currently 
on the EU’s list of critical raw material but a candidate to enter it as described in textbox 1. 
256 For further information, please refer to: C.C. Pavel, E. Tzimas, Raw materials in the European defence industry, JRC 
Science for Policy Report, 2016. https://setis.ec.europa.eu/system/files/2021-
02/raw_materials_in_the_european_defence_industry.pdf  
257 Mononen, Kivinen, Kotilainen, Leino (2022): Social and environmental impacts of mining activities in the EU. 
Study requested by the PETI Committee of the European Parliament. Social and environmental impacts of mining 
activities in the EU (europa.eu) 
258 JRC (2019), Mapping the Role of Raw Materials in Sustainable Development Goals. A preliminary analysis of links, 
monitoring indicators, and related policy initiatives. EUR 29595 EN, Publications Office of the European Union, 
Luxembourg, 2019 ISBN 978-92-76-08385-6, doi:10.2760/026725, JRC112892. 

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9.1.15.3.  Risk of unforeseen disruptions to industrial supply chains 

In a context of structural supply challenges, short-term shortages or supply challenges are more 
likely  to  materialise  and  to  severely  affect  the  industrial  base,  as  evidenced  by  e.g.  the 
semiconductor shortage. In the 2020-present chips shortage, unavailability of an early stage input 
led to production curtailment of major downstream sectors (especially automotive) and economy-
wide damages. The insurer Allianz estimates that the lack of chips in 2020 and 2021 cost EU-based 
carmakers  around  EUR  100  billion.259,260  Similar  scenarios  may  concern  critical  raw  materials. 
Given the significant investments and lead times (see textbox 4 in Annex 10), supply for critical 
raw  materials  is  particularly  inflexible  in  the  short  term,  and  with  their  currently  high  supply 
concentration,  political  instability,  trade  dispute  or  natural  disasters  could  lead  to  simultaneous 
disruptions in the major producing sites, thus producing a shortage that could only be addressed by 
price spikes shedding demand and thereby affecting large downstream industries from steel and 
alloy manufacturing to electric vehicles and renewable energy. However, if price spikes can be 
partly handled by industry, the fact that some CRMs are indispensable (with no known substitute 
and sometimes in very low concentrations) to some key components of the industry (e.g. heavy 
rare earth elements in magnets), a lack of access to CRM could lead to a major disruption of entire 
value chains in the EU (from electric mobility to defence and renewable energy production). 

Evidence  that  such  unforeseen  disruptions  can  occur  (though  so  far  with  limited  downstream 
effects)  include  the  magnesium  shortage  in  the  fall  of  2021  (caused  by  China’s  energy 
prioritisation261) during which the import price in EU jumped from EUR 2 000 to over EUR 10 000 
per metric tonne in less than a month (The EU is 100% dependant from third countries for raw 
magnesium metal imports). A second example is nickel whose prices spiked following the Russian 
invasion of Ukraine before going back to pre-war level in the following months, leading the London 
Metals Exchange to put a momentary halt to nickel trading in the early days of the invasion.262 

9.1.15.4.  Risk of high and volatile prices delaying the green transition 

Besides the risk of unforeseen disruptions occurring, a structural shortage of critical raw materials 
and rising uncertainty would lead to increased and volatile prices. The price of lithium for instance 
has risen more than 10-fold between 2020 and 2022.263 Such increases could derail clean energy 
projects in planning and make the achievement of the EU’s climate and renewable energy targets 
more difficult to reach and costly. These possible disruptions or a structural undersupply of critical 
raw  materials  are  difficult  to  take  into  account  for  projections  for  the  expansion  of  renewable 
energy, hydrogen, electric mobility, etc...  

The IEA Report on Clean Energy Minerals for example discusses the case of lithium-ion batteries, 
whose  price  had  fallen  dramatically  over  the  2010-2020  decade,  reaching  USD  137/kWh  in 
2020.264 Further reductions along this learning curve and stable prices are assumed in the model 
that achieves the IEA’s Sustainable Development Scenario, but given the rising share of costs that 

259 https://www.allianz.com/en/economic_research/publications/specials_fmo/Europe-automotives.html 
260 Ref. EU Chips Act Staff Working document – to complete 
261 For further details, refer to the publication of the in-depth review on strategic dependencies published in 2022. 
262 https://www.ft.com/content/e691a6fd-b4a8-4002-ae04-d58c46ae9a40. FT: “Nickel dogged by liquidity concerns 
and price volatility” 
263 https://tradingeconomics.com/commodity/lithium. In late 2017 the price of lithium carbonate in CNY per tonne was 
trading around 160,000, in late 2020 it was around 40,000 (minus 75% in two years) and as of December 2022 at close 
to 600,000 (plus 1400% in three years).  
264 Page 107 of IEA (2021): Clean Energy Minerals. 

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raw materials now account for, this development is becoming uncertain.265 For example, according 
to IEA, a doubling of lithium or nickel prices would induce a 6% increase in battery costs. If these 
events  happen at the same  time,  the cost  increase  would  eat  up  the  anticipated  learning  effects 
associated with a doubling of capacity.266 According to BloombergNEF, this development has led 
to the first price rise for electric vehicles (EV) batteries in 2022 up to USD 151/kWh, further away 
from  the  price  of  USD  100/kwH  usually  assumed  to  be  needed  for  cost  competitiveness  with 
combustion cars267. There is also evidence that surging materials prices, along with more expensive 
transportation and financing, have driven the costs of wind turbines and solar panels up between 
10 and 20 per cent in 2022 and thus potentially undermining the competitiveness of the European 
renewables industry.268 Similar considerations may apply to elevated critical raw materials prices 
delaying investment into the digital transition and into defence and security, but such analysis has 
so far not been published. 

9.1.15.5.  Risk of dominant critical raw materials suppliers leveraging market power 

in downstream industries 

The  high  concentration  of  critical  raw  materials  supply  gives  critical  raw  materials  producers 
substantial market power (whether they are companies or states), impacting the pricing mechanism 
and price-competitiveness for important industries such as clean energy and high tech. Such market 
power  is  due  to  a  combination  of  natural  favourable  occurrences,  active  industrial  policies, 
including  acquisitions  by  state-owned  companies  of  mines  in  third  countries269270,  and  outright 
dumping271. More recently, considerations by some countries of creating a supply cartel for certain 
critical raw materials to maintain elevated raw material prices have been made public272. 

Through such coordination but also on their own, critical raw materials-producing countries are 
explicitly aiming to move up the value chain and leverage their dominance at the extraction stage 
to move into processing and refining and ultimately, into manufacturing of end products, such as 
magnets, batteries, electric vehicles or wind turbines.273,274,275 While aspirations to increase value 
addition is a legitimate policy objective, supported under strategic partnerships, for third countries 
just as for the EU, it should not be achieved through distortive practices such as dual pricing, export 
taxes  or  export  bans.  As  of  2018,  20.5%  of  platinum,  22.0%  of  copper,  73.3%  of  rare  earth 
minerals,  77.9%  of  cobalt and  92.1%  of  tungsten supply  globally  was subject  to  some  form  of 

265 Page 107 of IEA (2021): Clean Energy Minerals. See also: E-Mobilität: Preise für E-Autobatterien sinken 
langsamer als angenommen (handelsblatt.com) 
266 Page 107 of IEA (2021): Clean Energy Minerals. 
267 FT: Electric car battery prices rise for first time in more than a decade 
268 Rising prices and supply chain risks threaten Europe’s renewable aims | Financial Times (ft.com) 
269 A Power Struggle Over Cobalt Rattles the Clean Energy Revolution - The New York Times (nytimes.com); Studies 
Reveal China’s Dominant Position in High-Tech Minerals (voanews.com) 
270 Such acquisitions by state-owned companies of mines in third countries mean that a simply country-by-country 
comparison of supply rates to the EU may not show the full picture of supply concentration (e.g. in a case where a 
certain country has significant domestic mining assets and controls further such assets in other third countries via state-
owned companies). 
271 See e.g. EU takes action on dumped calcium silicon from China (europa.eu) 
272 Indonesia considers Opec-style cartel for battery metals | Financial Times (ft.com), Métaux stratégiques : et si les 
pays producteurs se regroupaient en cartel du type OPEP ? (theconversation.com) 
273 On China: China Is Moving Rapidly Up the Rare Earth Value Chain – BRINK – Conversations and Insights on 
Global Business (brinknews.com); How long will China's dominance of rare earths last? Investment Monitor (mining-
technology.com) 
274 On Indonesia: Indonesia bans mineral exports to move up value chain – Asia Times; Indonesia’s Nickel Industrial 
Strategy | Center for Strategic and International Studies (csis.org) 
275 General overview: Export taxes and other restrictions on raw materials and their limitation through free trade 
agreements: Impact on developing countries (europa.eu), table 5 

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export restriction.276 This could be a threat for large European manufacturing industries such as the 
wind and automotive sectors. 

In addition, concentration at the supply level by non-EU producers (countries or companies) may 
also result in increased prices for downstream industries reliant on these input materials. 

9.1.16.  What are the sub-problems and their drivers? 

9.1.17. 

Sub-problem 1: Insufficient anticipation and mitigation of supply risks 

9.1.17.1. 

 Driver 1.1: Lack of systematic monitoring and risk preparedness  

Given  the  increasing  risk  of  CRMs  shortages,  both  structural  and  acute,  as  well  as  recent 
experiences  of  Covid-19-related  supply  chain  disruptions,  there  is  rising  awareness  among  EU 
companies that there is a need to develop risk management tools. Companies in the open public 
consultation reported having suffered from the price volatility (34%), supply disruptions (29%) 
and supply shortages (22%) in their supply of CRM in the last 5 years, while only 4% reported not 
having experienced any supply problems. Their supply of CRMs is deemed for at risk than their 
supply of other inputs by 26% of companies, with only 3% disagreeing277. 

Figure 7: Usage of strategies for securing raw materials supplies in the companies surveyed by 
PWC/DERA (2022)278 

276 JRC Raw Materials Scoreboard 2021, Indicator 10: Export restrictions, based on OECD and World Mining Data. 
277 The other companies did not express an opinion on this question. 
278 KÖSTER, H., NEUBERT, F. P., DIERKSMEIER, K., ADELMANN, L., LENTGE, H., SCHMIDT, P. (2022): 
Securing raw material supply: Benchmarking of measures of foreign manufacturing companies and recommendations 
for action. – DERA 5RKVWRI¿QIRUPDWLRQHQ, 52: 172 p., Berlin. 

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A study by PWC, commissioned by the German Resource Agency DERA279, investigated which 
strategies  leading  international  companies  use  to  ensure  their  supply  security.  The  results, 
presented  in  Figure  7,  show  the  variety  of  approaches,  from  business  tools  over  supplier 
diversification and stockpiling to material substitution and recycling. It also evidences the fact that 
many companies are not yet using these approaches but planning to use them in the future.  

This study provides an indication of what large companies with experience and sophistication in 
managing critical  raw materials supply risks consider effective strategies. There is evidence, in 
particular  for  the  case  of  stockpiling/increasing  inventories  (the  most  easily  quantifiable  of  the 
measures),  that  these  strategies  have  been  made  use  of  in  the  context  of  recent  supply  chain 
shortages such as the chips shortage.280 A survey conducted by the German Chamber of Industry 
and  Commerce  (DIHK)  among  its  member  firms  in  the  summer  of  2021  finds  that  57%  of 
companies  across  all  sectors  intend  to  increase  their  stockpiling  in  order  to  secure  their  own 
production capacity. 17% of companies reported the use of recycling and substitution.281  

However, risk management by companies might not be sufficient to address the growing challenges 
since there is a geopolitical dimension to the problem and the often complex and opaque value 
chains for critical raw materials markets require a level of sophistication that most companies do 
not possess.  

In the open public consultation, the views on this issue are nuanced: Only 29% of respondents 
agree or strongly agree that companies currently lack sufficient information on supply risks to take 
preventing measures, and 34% agree or strongly agree that companies do not have contingency 
plans  in  place  to  deal  with  supply  disruptions.  However,  56%  agree  or  strongly  agree  that 
companies  would  benefit  from  public  monitoring  programmes,  with  only  3  %  of  respondents 
disagreeing  on  this  statement.  This  could  be  interpreted  as  meaning  that  while  companies  do 
already  collect  information  and  develop  their  own  contingency  plans,  they  see  potential  to  go 
further with the help of a public monitoring capacity. 

At Member State level, only two governments have established institutions to monitor critical raw 
materials supply for their industry. In Germany, the German Mineral Resources Agency (DERA), 
a part of the Federal Institute for Geosciences and Natural Resources, has been developing a strong 
monitoring  capacity,  publishing  studies  on the  implications of  the  energy  transition and further 
technology developments for raw materials market, providing consulting services to companies 
and  advising  the  federal  governments  in  its  policy  development  and  international  engagement. 
Albeit still at testing stage, DERA’s toolbox monitors daily risk events of selected major  global 
production facilities for around 60 materials, using a commercial AI based software.282 The French 
Government is currently setting up a similar structure, namely the French Observatory of Mineral 
Resources  for  Industries  (OFREMI)  to  provide  a  strategic  and  economic  monitoring  for  public 
bodies and industries. Hosted and managed by BRGM, the French Geological Survey, OFREMI is 

279 KÖSTER, H., NEUBERT, F. P., DIERKSMEIER, K., ADELMANN, L., LENTGE, H., SCHMIDT, P. (2022): 
Securing raw material supply: Benchmarking of measures of foreign manufacturing companies and recommendations 
for action.  
280 Anecdotal: Chip Makers Stockpiled Key Materials Ahead of Russian Invasion of Ukraine - WSJ; Nintendo Appears 
To Be Stockpiling Raw Materials, Doubles Its 2019 Spending On Supplies | Nintendo Life; Comprehensive: New PMI 
Comment Tracker dataset reveals key insights into the global supply chain | S&P Global (spglobal.com) 
281 DIHK-Umfrage zu Lieferengpässen und Rohstoffknappheit 
282 Buchholz et al., Mineral Economics, 2022.  

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a public-private partnership building on the expertise of other public bodies283. In other Member 
States, however, such high-quality analysis and up-to-date market monitoring is not available.284  

In  some  Member  States,  independent  research  organisation  can  provide  similar  services  to 
companies and authorities. This is the case of the TNO in the Netherlands, which is notably active 
in the reuse of raw materials and provides policy-makers with support and advise on policy options 
concerning critical raw materials. 

There are other Member States with similar capabilities, such as the Austrian government, which 
publishes yearly one of the most complete datasets on extraction globally and free of charge285, or 
the Finnish geological survey GTK, which provides advisory services both to the government and 
business sector.  

At European level, the European Commission has developed the triannual criticality assessment, 
establishing  the  EU’s  List  of  critical  raw  materials.  This  exercise  serves  to  identify  the  raw 
materials with the greatest economic importance and supply risk and is used to prioritise research 
and innovation efforts and focus international engagement. It has also been well taken up by the 
research community and by industry. However, it relies on validated past data and thus does not 
serve  to  monitor  current  developments  and  give  early  warnings  that  would  help  companies 
prepared for an imminent supply crunch or longer-term structural shortages.286  A sub-list of the 
most  strategic  raw  materials,  based  on  a  filter  of  the  critical  raw  materials  list  for  strategic 
applications, and the highest expected supply-demand gap, would help focus efforts. 70% of all 
respondents in the open public consultation said such a sub-list would be useful to guide investment 
decisions  of companies and  financial institutions  and  also  70% said  it  should  be  used to  target 
public support at EU and national level. 

The critical raw materials assessment included in 2020 a foresight analysis for strategic sectors and 
technologies287.    A  2023  update  is  expected  to  expand  the  list  of  technologies.    This  provides 
forecast insights into the associated demands for raw materials.  Such studies are complemented at 
EU-level  by  supply  chain analyses,  as  e.g.  conducted  in  the  context  of  the  Russian invasion  of 
Ukraine288.      More  in-depth  supply  and  demand  analyses,  accounting  also  for  technology 
developments as well as foreseen extraction/processing planning, are available for specific sectors 
such as e-mobility and batteries289.  These EU-level analyses could be improved by expanding their 
scope. 

In  2015,  the  Circular  Economy  Action  Plan  included  the  mandate  to  establish  the  EC’s  Raw 
Materials Information System (RMIS)290. RMIS facilitates EU-level coordination, coherence, and 
quality assurance of knowledge on raw materials value chains from EC services, member states, as 
well as e.g. Horizon projects.  Profiles includes recent information on e.g. the import reliance of 
extracted and processed raw materials as well as on the current levels of recycling, as well as trade 

283 Launching of OFREMI - French Observatory of Mineral Resources for Industrial Sectors | BRGM; géosciences n°26, 
métaux critiques, concilier éthique et souveraineté?, Juin 2022 
284 Note that each Member State has a geological survey, but this is concerned with geological knowledge, mine 
production and environmental aspects, rather than price developments in global markets, disruptions in third countries 
and risk management strategies for raw material buyers. 
285 World Mining Data: https://www.world-mining-data.info/ 
286 Note that the JRC foresight study on critical raw materials in strategic sectors and technologies provides demand 
forecasts but no analysis of supply developments. 
287 Raw Materials Information System (europa.eu) 
288 Raw Materials Information System (europa.eu) 
289 see e.g. Raw Materials Information System (europa.eu) 
290 Raw Materials Information System (europa.eu) 

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analyses  and  forecast  information  for  various  sectors/technologies.  The  system  was  further 
reinforced  by  the  2020  CRM  Action  Plan.    However,  such  a  system  cannot  provide  regularly 
updated monitoring analyses in the contexts of security-of-supply and sustainability.  Associated 
networks also need to be reinforced. 

The Commission also maintains several expert groups and networks to advise on its policymaking 
and to enable an exchange of information and best practices:￼ which bring together from technical 
level to high level Member States, international organisations, industry, R&D organisations, civil 
society, NGOs. However, none of these groups have operational capabilities to monitor markets or 
support companies in their risk management efforts, or powers to mandate information exchanges, 
harmonise  reporting  or  build  an  effective  strategic  preparedness  system.291  In  the  open  public 
consultation, 53% of respondents agree or strongly agree that Member State authorities do not have 
in  place  sufficient  monitoring  mechanisms  allowing  them  to  assess  supply  risks  and  anticipate 
problems. 58% agree or strongly agree that Member State authorities do not sufficiently cooperate 
and coordinate in monitoring critical raw materials supply chains. 

In contrast, there are energy goods for which a systematic preparedness system exists. The EU's 
Oil Stocks Directive obliges Member States to hold emergency stocks of crude oil and/or petroleum 
products equal to at least 90 days of net imports or 61 days of consumption, whichever is higher.292 
For natural gas, Regulation (EU) 2017/1938 on measures to safeguard the security of gas supply 
lays  down  a  framework  for  EU  emergency  preparedness  and  resilience  to  gas  disruptions.  The 
recently adopted Regulation on Gas Storage (EU) 2022/1032 amends this regulation and imposes 
minimum storage levels for natural gas.  

In addition, while the proposed Single Market Emergency Instrument (SMEI) comprises measures 
related to the monitoring of supply chains of goods of strategic importance (article 11), those are 
only triggered after the activation of the vigilance mode (following a threat/incident with potential 
to significantly disrupt the supply chain), and such tasks would be carried out by Member States 
based on voluntary information requests.  

Regarding stockpiling, SMEI provides for the possibility for the Commission to identify goods of 
strategic importance for which it might be necessary to build strategic reserves (art. 12) after the 
activation  by  implementing  act  of  the  vigilance  mode  (art.  9).  Through  implementing  acts,  the 
Commission may require to Member States information on such reserves (current stock, potential 
for further purchase, alternative supply option, etc). As necessary, the Commission may determine 
individual targets for the strategic reserves, taking into account the probability of shortages, the 
level of stock, the costs for building them, etc, and the Member States shall inform the Commission 
about their status. Only if the Member States fall continuously significantly short of its target, may 
the Commission make the individual targets for strategic reserves mandatory. If a Single Market 
emergency  has  been  activated  (art.  32),  the  SMEI  mechanism  also  enables  the  Commission  to 
recommend  to  Member  States  the  targeted  distribution  of  strategic  reserves  with  a  view  to  not 
further aggravate the disruptions in the single market (art. 32). Therefore, the  SMEI mechanism 
does  not  provide for  a  permanent  assessment  and  coordination  of  the  stockpiles  of  critical  raw 
materials outside of its vigilance mode. 

291 The Single Market Emergency Instrument partially covers such tasks, but only enters the field when a significant 
disruption is expected and does not provide expertise on critical raw materials markets. (see section _)  
292  EU's Oil Stocks Directive (2009/119/EC) 

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9.1.18. 
raw materials potential and lacks capacity in key stages of the value chain 

Sub-problem 2: The EU is currently not making full use of its domestic critical 

As discussed in the introduction and context, the EU relies almost exclusively on imports for many 
critical raw materials (this is in part what makes them critical). In a globally integrated economy, 
different regions specialise in the goods in which they have a competitive advantage and this can 
be to the benefit of all involved; however, where inputs used in strategic applications are concerned, 
and when they are as concentrated as discussed above, such import reliance poses a significant risk. 
Besides pursuing diversification – the potential for which is limited at least in the short term due 
to the high concentration of global markets – it is in the European interest to reduce some of these 
dependencies  and  maintain  or  develop  at  least  a  certain  degree  of  domestic  capacities.  Most 
respondents in the Open Public Consultation either agree or strongly agree with statements that 
refer  to  underexploited  opportunities  of  critical  raw  materials  (CRM)  within  the  EU.  66%  of 
respondents agree or strongly agree that the potential to extract CRM from primary sources within 
the EU is currently underexploited. 72% agree or strongly agree that EU’s processing and refining 
capacities for CRM are currently underexploited. 84 % agree or strongly agree that the re-use and 
recycling opportunities within the EU are currently underexploited and only 2 respondents (out of 
259) disagree or strongly disagree with the statement.   

Figure 8: World regions’ share in global production for different material categories (EU, 1984-
2017). For data on mining production the UK is excluded (EU-27) only since 2015.293 

293 Raw Materials Scoreboard 2021, Indicator 7. 

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On  the  global  stage,  the  EU  is  a  minor  player  in terms  of  mineral  production, including  in  the 
categories within which critical raw materials fall.294 As shown in figure 8 the EU is one of the 
smallest producers of iron and ferro-alloys, non-ferrous metals and precious metals, while it does 
have a significant production (third largest globally) in the category of industrial minerals. On the 
institutional side, the major international mining companies are headquartered outside of the EU.295 
The  major  trading  hubs  and  stock  exchanges  for  raising  capital  for  raw  materials  projects  are 
located in Canada296 and the UK297. The EU has a significant metals processing and manufacturing 
industry,298  but  the  currently  very  high  energy  prices  have  led  to  temporary  and  in  some  cases 
indefinite closures or relocations at the refining stage.299  

However, even if Europe does have mineral potential for most critical raw materials, they could 
only  be  confirmed  and  turned  into  mineral  resources  and  reserves  (economically  recoverable 
deposits) through increased exploration (see figure 9). The SCRREEN2 project reports a summary 
of known deposits in EU Member States, with for instance cobalt deposits in Finland, Germany, 
Norway, Sweden but only extracted in Finland300. The EU also possesses significant potential for 
extraction of phosphate rock, lithium and natural graphite301. 

294 There are critical raw materials among each of these four categories, though they are generally not the drivers of the 
trends seen above due to their low volumes. However, since the value chains are similar and interlinked, the low 
production share of the EU in these broad categories does show the focus of industrial and knowledge ecosystems. 
295 Global leading mining companies by revenue 2022 ranking | Statista 
296 Toronto: The world’s mining investment capital - BNN Bloomberg 
297 About | London Metal Exchange (lme.com) 
298 The EU non-ferrous metals sector (which includes the processing, refining and downstream metal treatment 
activities for all metals except iron and steel, including most critical raw materials) generates €120bn in annual 
turnover and employs 500,000 people directly. Source: Key Industry Data (eurometaux.eu) 
299 non-ferrous-metals-ceo-letter-on-energy-crisis-06-09-2022.pdf (eurometaux.eu); Metal Plants Feeding Europe’s 
Factories Are in Existential Crisis - Bloomberg  
300 SCRREEN project, Challenges of locating, mining and extracting CRM resources, 2018. Table 5: Geological settings, 
known deposits and mine production of CRM D3.3: Challenges of locating, mining and extracting CRM resources) 
301 The Geological Surveys of Europe: https://www.europe-geology.eu/mineral-resources/mineral-resources-
map/critical-raw-materials-map/ 

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Figure 9: Mineral occurrences of critical raw materials in Europe302 

It  is  important  that,  while  exploration  and  extraction  depend  only  on  the  location  of  mineral 
occurrences, this is only one determinant of location for processing/refining and not relevant to the 
recycling stages. Due to the high energy intensity of smelting and processing operations, the main 
determinant of competitiveness for these stages of the value chain are energy costs.  

Apart from natural competitive advantages, other jurisdictions are moving more and more towards 
using  subsidies  to  support  their  green  and  digital  technologies  and  to  promote  their  strategic 
autonomy.  

There  are  also  potential  pipelines  of  projects  that,  if  materialised,  could  turn  those  geological 
occurrences into concrete operations that would help achieve a higher self-sufficiency and secure 
a  foothold  in  important  industries  and  competences.  For  the  rare  earth  magnets  value  chains, 
ERMA identified that investments of EUR 1.7 billion would be capable of building projects along 
the value chain that would allow the EU to produce 20% of its demand by 2030.303 Only a small 
part  of  these  potential  pipelines,  however,  are  planned  to  go  ahead  under  current  conditions.304 
More developed and likely to go ahead are investments in the lithium and batteries manufacturing 
value chain: The EU database of critical raw material projects305 shows that if all the projects under 

302 Screenshot from EGDI (geus.dk) (04.12.2022). Note that incomplete reporting by Member States geological 
surveys affects these results. 
277 32 Rare Earth Magnets and Motors: A European Call for Action. A report by the Rare Earth Magnets and Motors 
Cluster of the European Raw Materials Alliance. Berlin 2021 
304 Based on confidential information from ERMA. 
305 EU database of Critical Raw Materials projects: 2022 update. Internal Report prepared by the European 
Commission in collaboration with the Member States. 

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development in the EU as of 2022 would materialise, they could be sufficient to cover 38% of the 
EU’s rapidly growing lithium demand by 2030 and at least 15% of EU demand by 2050.306  

While the quality and accessibility (given high population density and environmental protection 
areas in the EU) of geological occurrences certainly plays a role in explaining the low investment 
into critical raw materials projects, the case of China, which is dominant in processing for many 
critical  raw  materials  without  being  the  dominant  country  at  the  extraction  stage  (see  figure  6 
above), demonstrates that this is not the main factor for investment and capacities at the later stages 
of the raw materials value chain. As discussed in textbox 4, at the processing/refining stage energy 
costs, reported by many stakeholders are the determining factor for location, while for recycling 
operations  both  energy  costs  and  the  availability  of  waste  streams  play  a  role.  After  lengthy 
permitting  and  a  lack  of  support  from  public  financial  institutions,  higher  production  costs  are 
overall reported as the 3rd most important reasons impeding CRM’s project difficulties in accessing 
private  finance,  alongside unfair competition  from  third countries.  It  should also  be  noted that, 
while  certain  highly  economical  geological  endowments  exist  that  justify  investment  even  in  a 
challenging regulatory and business environment, many projects are on the margin and could be 
made  economical  through  price  swings  on  global  markets,  customers’  willingness  to  pay  a 
premium for transparent and sustainable sourcing, and accelerated permitting timelines.  

9.1.18.1.  Driver 2.1: Insufficient exploration of European mineral resources  

Exploration is a precondition for any extraction project. As noted in textbox 4, exploration is 
a high-risk business and therefore structured in stages of increasing cost and certainty on the 
mineralogical and economical properties of the project.  

At  global  level,  exploration  spending  (public  and  private)  for  non-ferrous  metals307  is  growing 
(after a slump in the early 2010s) and was estimated at USD 9.8 billion in 2019, while the share of 
EU was less than EUR 300 million. Within this sum, three Member States – Finland, Sweden and 
Spain – accounted for 50% of the total spending.308 While the EU’s exploration budget is increasing 
(nearly doubling between 2016 and 2022), it remains very low compared to other world regions in 
the world, accounting for about 2% to 3% of global exploration expenditure in 2010-2022 (Figure 
10) while the European continent represents around 7% of the Earth’s landmass.  

306 European Commission internal database, 2022. NB: This includes only projects that are under development or 
operational today. Additional EU projects could be developed, making the estimation of EU demand covered by EU 
projects potential in 2050 a low estimate. 
The 2022 EU database of Critical Raw Materials projects, initiated as Actions 4 and 5 of the Action Plan on Critical Raw 
materials, provides for the mapping of CRM projects at different value chain stages. 
307 A class of metals that includes most critical raw materials, as well as the precious metals gold, silver etc., and the 
base metals aluminium, copper, zinc etc. 
308 S&P Global Market Intelligence, 2019 

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Figure  10:  Global  exploration  expenditure.  Note:  2022  refers  to  Jan-Oct  2022.  Data  include 
spending for gold, silver, base metals (copper, nickel, zinc and lead), cobalt, lithium, molybdenum, 
platinum group metals, diamonds, U3O8, rare earths, potash and phosphate.309 

Since  mining  companies  generally  focus their exploration  budget  on  a  well-defined,  small area 
covered by an exploration permit, public/general exploration is needed at regional level to define 
areas of mining interests for each specific mineral.  

Member States’ spending for these regional (or national, sometimes) surveys existed until the end 
of 1980’s and significantly decreased in the 90s onwards.310 In addition, these surveys were focused 
on materials of economic interest at that time and not on the critical raw materials needed today 
for  the  green  and  digital  transition  or  for  resilience  and  security  purposes.  Previous  regional 
exploration surveys were also limited to the first few meters of the underground for technological 
and budgetary reasons. Advances in technological tools for raw material exploration at the end of 
the 1990s (mainly geophysical methods) have permitted to significantly enhance the knowledge on 
material  resources  potential,  up  to  several  hundred  meters  deep.  The  generalised  lack  of 
investments during the past decades on geological exploration by Member States (specifically on 
the critical raw materials and with the most advanced technology tools) has led to a general lack of 
knowledge regarding the true potential of critical raw materials in the EU to the present day. This 
impedes the further exploration by private companies on specific sites of mining interest and further 
exploitation.  

Despite a current scarce mining industry, Europe has a long history of mining industry that resulted 
in the creation of a large amount of mining tailings311 across the continent, mostly in relation with 
closed mines. Since mining companies generally focused on one specific substance only (mostly a 
base  metal),  some  of  these  mining  tailings  have  been  recently  recognised  has  major  potential 
sources of critical raw materials across the EU. However, to which extent and for which elements 
the reprocessing of these mining tailings could be an economically viable source of critical raw 
materials remains mostly unknown due to a lack of proper exploration of mining tailings in the EU. 
Several Member States map the tailings, for instance the Polish Geological Survey has a dedicated 

309 Source: JRC, based on S&P Global, USD/EUR exchange rate from OECD, HICP from ESTAT. Note that the 
minerals shown here include not only non-ferrous metals, as the data in the preceding paragraph. 
310 Regueiro y González-Barros, Manuel & Espi, Jose. (2019). The returns on mining exploration investments.. BOLETÍN 
GEOLÓGICO Y MINERO. 130. 161-180. 10.21701/bolgeomin.130.1.010.  
311 Tailings are the waste materials left after the target mineral is extracted from ore. 

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web-tool showing identified sites.312 The challenge is then to identify the critical raw materials in 
each of these tailings and develop a technology and business model to extract them. Several pilot 
projects of reprocessing mining tailings from selected sites to produce critical raw materials are 
currently  underway  in  the  EU  (notably  under  the  EIT  Raw  Materials  NEMO  project313),  but 
delivering  the  full  potential  of  this  source  of  critical  raw  materials  would  require  a  proper 
evaluation of the resources through specific exploration across Member States. 

9.1.18.2.  Driver 2.2: Unpredictable and fragmented permitting procedures  

Industrial  activities  along  the  raw  materials  value  chains,  including  exploration,  mining, 
processing,  refining  and  recycling,  make  use  of  energy-intensive  processes  with  potentially 
significant  impacts  on  the  environment  and  local  communities.  Therefore,  various  areas  of 
legislation, including on land use planning and nature conservation, apply to their planning and 
operation. Compliance with these rules is ensured through the obligation to obtain several permits 
before starting operations.  

EU legislation determining the process and substance of permitting procedures  related to CRM 
projects  includes  the  Strategic  Environmental  Assessment  (SEA)  Directive,  the  Environmental 
Impact Assessment (EIA),  Birds, Habitats314, Water Framework,  Industrial Emission Directives 
and the Seveso Directive (an overview of permitting-related EU legislation is included in Annex 
8). This legislation seeks to mitigate the risk of causing significant adverse environmental effects, 
such as generation of contaminants deposited on land, in the air and water, with the development 
of exploration, mining, refining and recycling activities. Member State legislation on the process 
and  criteria  for  issuing  permits  reflects  such  EU  rules  and  adds  rules  in  areas  of  national 
competence.  

The costs and time associated with permitting procedures and the likelihood of obtaining a permit 
are  key  considerations  underlying  investment  decisions  in  the  CRM  sector.  Currently,  the 
unpredictability of the length of national permitting processes and of the criteria for the assessments 
and documentation required are often reported as barriers to investment in new CRM projects.315 
Consultations with stakeholders in the context of this initiative have further underlined the degree 
to which this unpredictability is perceived as a barrier to building an EU CRM value chain.316   

For raw materials extraction projects, the MINLEX study showed that times to obtain a permit 
(related to all relevant rules, not only environmental) can vary between procedures from 3 months 

312 https://cbdgportal.pgi.gov.pl/haldy/ 
313 Near-zero-waste recycling of low-grade sulphidic mining waste for critical-metal, mineral and construction raw-
material production in a circular economy (h2020-nemo.eu)  
314 Interaction with nature protection, and notably the Birds and Habitats Directives, is important: A total of 375 out of 
943 critical raw materials projects under development in the EU (40% of the total) are located within or closer than 
1000m to 180 areas identified as Natura 2000 (0.6% of the total). Source: Internal analysis by DG GROW. 
315 For example, the European Federation of Geologists also identified long permitting timelines as a ‘major obstacle in 
sourcing finance’ for CRM extraction projects - Microsoft Word - 
2022_EFG_Letter_Top10_Mining_Opportunities_20221021.docx (eurogeologists.eu).  
316 For example, the length and complexity of permitting procedures was the main reason for the lack of private 
investment in CRM projects identified by respondents to the OPC. As one company respondent put it: ’Projects along 
the value chain – such as mining or secondary production installations – might face delays and uncertainty, eroding 
viability of the investment and competitiveness of operations in the EU.’ 

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to 3 years.317 More problematically, outliers can be found with timelines up to 9 years.318  Current 
examples of CRM projects where permitting procedures are, for different reasons, lasting longer 
than was initially expected include:   

 

 

 

the Sakatti project in Finland, aimed at producing platinum group metals (as well as nickel 
and copper), where the permitting process started in February of 2018  and where, as per 
December 2022, there was no decision yet (approx. 4 years later)319;  
the Mina do Barroso project in Portugal, aimed at producing lithium, where the permitting 
process started in 2018 with a decision initially expected within 140 working days - in line 
with  the  guidelines  of  the  responsible  authorities  -  and  where  currently  the  decision  is 
expected in April 2023 (approx. 4 years later)320;  
the Talga project in Sweden, aimed at the production of natural graphite, where the EIA 
report was submitted in May 2020 and where, as per December 2022, there was no decision 
yet (approx. 2,5 years later)321.   

One  reason  for  unpredictable  timelines  is  that  the  procedure  for  performing  the  necessary 
environmental  assessments  is  not  consistently  implemented,  within  and  across  Member  States, 
especially with regard to the timing. The average duration of the procedure provided for in the EIA 
Directive (for all projects in scope, including CRM projects), for example, was, according to the 
most recent data, approximately 11.6 months, but with figures ranging from 5 to 27 months.322   

Similarly,  differences  can  be  observed  in  the  structure  of  the  procedure,  with  various  levels  of 
authorities (local, regional, national) involved in this process. The “one-stop shop” concept allows 
applicants  to  interact  with  a  single  authority  and  facilitates  efficient  coordination  among 
authorities, which is especially relevant when dealing with interdisciplinary projects. EU law also 
facilitates  the  development  of  a  “one-stop  shop”  for  permitting  by  allowing  to  streamline  the 
environmental  assessment  procedures  at  planning  level  and  project  level323.  However,  the 
MINLEX study assessed that, as of 2017, only some jurisdictions have a one-stop-shop regime in 
place  and  that,  without  distinguishing  per  type  of  mineral,  an  average  of  3.03  authorities  were 
involved for exploration projects and an average of 4.02 authorities for extraction projects.324  

Environmental assessment procedures are organised differently across Member States also in terms 
of  content.  First,  the  number  of  different  environmental  assessments  required  differs  between 
Member  States.  Although  the  EIA  Directive  explicitly  provides  that  the  environmental  impact 
assessment  of  projects  can  be  integrated  with  other  required  assessments  (i.e.  those  under  the 

317 MinPol/European Commission (2017): Legal framework for mineral extraction and permitting procedures for 
exploration and exploitation in the EU. Final report. https://op.europa.eu/en/publication-detail/-/publication/18c19395-
6dbf-11e7-b2f2-01aa75ed71a1/language-en “Minpol (2017)” in the following. 
318 E.g. For the Kallak iron ore project in Sweden, the developer submitted request for exploitation concession in 2013. 
In 2022, 9 years later, authorities approved to issue the concession to the developer, after which the preparations for  
the EIA have been initiated.  Source: https://www.sgu.se/om-sgu/nyheter/2022/mars/regeringen-beviljar-koncession-
for-kallak/ 
319 Environment.fi (joint website of Finland’s environmental administration): https://www.ymparisto.fi/fi-
fi/Asiointi_luvat_ja_ymparistovaikutusten_arviointi/Ymparistovaikutusten_arviointi/YVAhankkeet/Sakatin_monimeta
lliesiintyman_kaivoshanke_Sodankyla   
320 See Agência Portuguesa do Ambiente (apambiente.pt)  
321 Registered by the Swedish Land- and environment court (Mark- och miljödomstolen) in Umeå in June 2020. Case 
number: M 1573-20. 
322 GHK (2010), Collection of information and data to support the IA study of the review of the EIA Directive. The 
average duration of an EIA ranges from 7 months or less (4.75 in Estonia, 5 in Slovakia, 6.5 in Latvia, 7 in Greece) to 
more than 20 months (21 in Denmark, 27 in Spain). New figures are expected in 2024.  
323 See Annex 10 for the different possibilities and relevant provisions.  
324 Minpol (2017) 

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Habitats,  Birds,  Water  Framework  and  Industrial  Emission  Directives),  offering  significant 
potential  for  simplifying  procedures  where  multiple  assessments  are  required  and  several 
authorities are involved, this option is not consistently applied.325 Second, a lack of clarity about 
the scope and level of detail of the information required in the environmental assessment report 
can  lead  to  multiple  exchanges  and  new  requests  between  the  developer  and  the  competent 
authorities leading to delays. The EIA Directive provides that project developers may request a 
scoping  opinion  from  the  competent  authority  identifying  the  content  and  the  extent  of  the 
assessment and specifying the information to be included in the EIA report, to provide clarity from 
the outset. However, only in a number of Member States326 such scoping applied consistently.  

Such different time schedules and approaches applied by the authorities can generate significant 
uncertainty  and  delays  for  the  developers,  with  associated  additional  costs.  This  is  particularly 
challenging for projects along the critical raw materials chain, where large capital investments are 
needed  to  develop  a  plant  and  start  production.  At  the  same  time  investors  need  to  be  able  to 
perform  long-term  planning  of  operational  costs  and  revenues  to  create  a  profitable  business 
model against the background of volatile commodity and energy markets. The unpredictability of 
permitting procedure therefore discourages private investment.327  

An additional point made many by stakeholders is that public authorities responsible for issuing 
permits sometimes lack sufficient expertise and resources, such that investing into skills and the 
budget  of  permitting  authorities  could  speed  up  procedures.328  It  should  also  be  noted  that,  in 
addition to the permitting procedure as such, judicial appeals can also lead to delays. MINLEX’ 
court cases database indicated that a majority (53 %) of the appellants are companies, followed by 
NGOs (14 %).329 Appeals were reported to be a concern in the mining sector because, even though 
they ensure the right of access to justice, they often cause increased unpredictability for potential 
investors and other concerned stakeholders.   

9.1.18.3.  Driver 2.3: Difficulty in accessing financing 

Quantification of Investment Needs (see annex 12 for methodological details) 

The soaring demand for many raw materials needed for the green and digital transition and for 
strategic sectors relevant for security and resilience translates into massive investment needs, both 
globally and in Europe.  

The JRC estimates that the capital investment required to refine all the battery raw materials needed 
for batteries placed on the European market by 2030, would amount to EUR 20 billion.330 Of this, 
EUR 6.9 billion account for lithium, EUR 6.2 billion for nickel, EUR 5.5 billion for graphite, EUR 
0.9 billion for manganese, EUR 0.7 billion for cobalt. These figures already take into account that 

325 18 Member States have established a joint procedure for the Habitats Directive, but only in some cases this joint 
procedure also covers assessments under the other Directives.  
326 I.e. Bulgaria, Czech Republic, Denmark, Estonia, Finland, Luxembourg, and Romania. 
327 As one company respondent (Aurubis AG) to the OPC put it: ’Projects along the value chain – such as mining or 
secondary production installations – might face delays and uncertainty, eroding viability of the investment and 
competitiveness of operations in the EU.’ 
328 This point was made in the position papers submitted by Junta de Andalucia, Aurubis AG, Vulcan Energy 
Resources and EIT Raw Materials in response to the Call for Evidence. Vulcan Energy Resources specifically calls for 
“hiring and training personnel not just for the direct administrative responsibilities but also for project management of 
the permitting process”, improving the technical equipment (hardware, software, and training); and standardising 
application and permits. 
329 MinPol (2017). 
330 Internal calculations by JRC, see annex 12. 

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by  2030  a  small  but  non-negligible  share  of  battery  raw  materials  demand  will  be  covered  by 
recycling. For 2040, the headline figure reaches EUR 33.4 billion.  

The investments required to fully meet the EU’s domestic needs for battery raw materials recycling 
amount  to  EUR  3  billion  by  2030  and  EUR  10.1  billion  by  2040.  This  reflects  the  growing 
importance  of  recycling  over  time.  These  figures  also  take  into  account  the  different  levels  of 
recyclability, which is high for cobalt and nickel but very low for graphite. The calculation of these 
figures assumes similar investment costs for recycling as for refining per tonne of material. 

When assessing the investment needs for the extraction projects, one has to take into consideration 
the  mineral  potential  of  Europe.  An  example,  where  Europe  is  well  endowed  is  lithium. 
Calculations by DG GROW based on the JRC figures and public data indicate that required capital 
expenditure of EUR 4.9 billion by 2030 and EUR 8.7 billion by 2040 will be needed to  extract 
100% of the lithium needed for batteries domestically. 

In total, the investment needs for the refining and recycling of battery raw materials as well as 
lithium extraction to supply the entire European battery market with fully domestically produced 
raw materials amounts to EUR 27.9 billion by 2030 and EUR 52.2 billion by 2040. If the EU set 
the goal of 25% domestic production of raw materials (primary and secondary) this would mean 
investment needs of EUR 7 billion by 2030 and EUR 13.1 billion for 2040.  

The level of public support needed is difficult to estimate as it is very sector-dependent. A more 
detailed  breakdown  can  be  found  for  the  projects  receiving  public  funding  from  the  American 
Battery  Materials  Initiative331,  which  is  part  of  the  Bipartisan  Infrastructure  Law  and  was 
announced in October 2022. The initiative disburses USD 2.8 billion for several steps of the battery 
value  chain.  USD  1.6  billion  are  earmarked  for  projects  to  separate  and  process  battery  raw 
materials, for which the recipients are expected to contribute USD 3.4 billion. This represents a 
share of public money of 32%. Among the projects supported, there is only one project on battery 
materials recycling, which receives funding indicating a public share of 41%. 

Assuming a similar aid intensity as well as compatibility with EU State aid rules, for comparable 
projects in the EU, this could result in public support needs of EUR 2.2 and 4.2 billion by 2030 
and 2040 respectively, for one quarter of European needs for the refining and recycling of battery 
raw materials as well as for lithium extraction.  

Only for battery raw materials and rare earth permanent magnets, the investment needs to ensure 
the supply of 20% or 25% of the European demand from domestic sources  amount to EUR 8.7 
billion by 2030 and 14.8 billion by 2040. Assuming a share of public spending to realise these 
projects comparable to the American Battery Materials Initiative, public support of EUR 2.7 billion 
by 2030 and 4.7 billion by 2040 would be required.332 

Other  strategic  raw  materials  are  also  likely  to  require  large  investments  in  light  of  the  green 
transition; e.g. copper for electrifying infrastructure, silicon for solar panels, platinum group metals 
for  hydrogen  electrolysis.  The  European  Raw  Materials  Alliance333  has  identified  potential 
investments of EUR 1.7 billion for rare earths extraction, refining and recycling as well as magnet 
production, which would ensure a supply of 20% of European demand along the value chain by 

331 https://www.energy.gov/sites/default/files/2022-11/DOE%20BIL%20Battery%20FOA-
2678%20Selectee%20Fact%20Sheets.pdf 
332 The calculations can be found in the description of the driver in section 5.2 and annex 5 and further methodological 
details in Annex 12 
333 https://eitrawmaterials.eu/wp-content/uploads/2021/09/ERMA-Action-Plan-2021-A-European-Call-for-Action.pdf 

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2030.  For  other  CRM,  their  potential  investment  cases  amount  to  EUR  3.1  billion,  fulfilling 
between 20 and 60% of projected EU demand in 2030 for different relevant raw materials.334  

 Difficulties in Access to Finance 

Several  CRM  market-specific  factors  complicate  access  to  (public  and  private)  finance.  The 
volatility of prices for CRMs makes it hard for investors in projects at all stages of the value chain 
to predict earnings, especially in the medium to long term. Meanwhile, given the long lead times 
and potential permitting delays (see previous chapter), significant investment decisions have to be 
taken years before a project starts gaining operational revenue. In addition, global markets for many 
critical raw materials are small, highly concentrated and opaque335, increasing the risk premium 
that needs to be paid compared to other markets. To provide financing, the financial institutions 
need to possess in-depth knowledge about mining project development and global raw materials 
markets  to  be  able  to  assess  CRM  projects.  Maintaining  this  expertise  in-house  is  difficult 
considering  the  small  size of  the  European  raw  materials  sector. While all  such factors  are  not 
unique to the CRM market and investors routinely deal with such risks (ultimately, high returns on 
such projects should compensate for the risk taken and the resources invested), their aggregation 
does make the financing of CRM projects very costly and, given the limited overall size of the 
EU’s mining, processing and refining industries, it can be hard to find any partners willing or able 
to provide the type of financing required.  

Based on discussions Commission services had with various European public and private financial 
institutions, the following observations can be made on the state of financing for the different stages 
of the critical raw materials value chain: 

  Exploration: Most exploration companies active in Europe are either based outside of the 
EU,  notably  in  Australia  and  Canada,  or  financed  by  actors  in  these  third  countries. 
Dedicated private investment funds exist in North America (US and Canada), Australia, 
UK336. In general, the interviewed private and public financial institutions have not been 
involved  in  financing  exploration  projects  and  stated  that  this  was  due  to  the  high  risk 
involved. The European Bank for Reconstruction and Development (EBRD) is the only 
notable  exception,  with  a  team  dedicated  to  this  area  and  the  ability  to  support  such 
projects.  Exploration  financing  mostly  comes  in  the  form  of  equity  or  quasi-equity  to 
project companies  set  up  ad  hoc.  To  address this  market  gap,  the  Commission  and  the 
EBRD are negotiating to establish a financial instrument to invest equity or quasi-equity 
in companies performing innovative sustainable exploration in Europe. 

  Extraction:  While  public  institutions  have  limited  capabilities  to  engage,  some  private 
financial  organisations  have  dedicated  metals  and  minerals  investment  teams.  They 
generally require the project to be financed by a large corporation through their balance 
sheet  rather  than  through  project  finance.  Financing  of  junior  miners  is  generally 
considered very risky and the private financial sector is not willing to engage. Furthermore, 
for mining projects in third countries, the involvement of an Export Credit Agency for risk 
sharing is key.  All interviewed institutions indicated that financing of investment projects 
would be usually done on a syndicated basis. MS started to implement some measures to 

334 Source: Overview of the current state of the investment pipeline provided by ERMA to Commission services (not 
public). 
335 https://www.ft.com/content/46e5c98e-f9cd-4e88-8cd5-23427522c093: Financial Times: Tesla supplier warns of 
graphite supply risk in “opaque” market. Syrah Resources says lack of transparency over pricing in China-dominated 
market poses challenge for financing.  
336 Examples of investments funds in the mining industry Resource Capital Funds (offices in US, Canada, UK, Chile); 
Taurus Funds Management (based in Australia, with two satellite offices in UK and Paris); Denham Capital (offices in 
US, UK, Australia); The Pallinghurst Group (based in London); Waterton Global Resource Management (based in 
Canada).  

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promote  investments  in  the  CRM  field  in  third  countries  (including  extraction)337. 
Investing in extractive industries in EMDEs have faced increasing complex challenges in 
meeting  environmental,  social  and  governance  standards,  implying  the  mobilisation  of 
significant resources in technical assistance.  Furthermore, the cost and risks of litigation 
after  investments,  i.e.  during  implementation,  have  increased  considerably.    Given  the 
challenges,  most  DFIs,  including  MDBs,  have  cancelled  or  significantly  reduced  their 
programme  in  extractive  industries,  including  the  EIB.    EFSD+  guarantees  investment 
windows have not included mining investments explicitly.  

  Processing/refining: Banks indicate that in order to finance processing/refining projects, a 
stable  and  secure  supply  of  critical  raw  materials  would  have  to  be  ensured,  which  is 
currently  not  the  case for a  number  of  critical  raw materials.  New  green field  facilities 
could be set up next to mines outside EU, but financing of integrated projects (mining + 
refining/processing)  is  considered  high-risk.  Private  financial  institutions  are  willing  to 
engage  if  a  large  established  client  with  strong  credit  rating  sponsors  and  finances  the 
project through its  balance  sheet  (corporate finance). The  role  of  energy  prices and the 
price volatility of the relevant critical raw materials has also been mentioned as important 
in determining the viability of European refining projects.338 

  Recycling: The interviewed banks have little experience so far on this but generally are 
willing to engage. One of the main issues for the viability of this type of investment is the 
steady supply of material for recycling. 

Overall, the results from the open public consultation and the targeted consultations of banks show 
that access to finance is considered a major barrier to investment in specific stages of the critical 
raw materials value chain in Europe339. While the need for financial support for projects will likely 
vary from case to case, many stakeholders underlined the importance of de-risking, notably through 
guarantees,  including  for  projects  outside  the  EU,  of  signalling  through  participation  of  public 
financial institutions, and of reducing the exposure of processing/refining operations to high and 
volatile energy and critical raw materials prices. 

In addition, under the Taxonomy Regulation340, the Platform on Sustainable Finance has started 
the  work  on  Taxonomy  criteria  for  pollution  prevention  and  control  in  mining  and  delivered  a 
criteria for climate change mitigation in manufacture of copper (smelting, roasting and refining 
operations) activities. The work on mining could resume under the new Platform 2.0. 

9.1.18.4. 

Driver 2.5: Lack of high-quality technical standards to ensure sustainability of critical 

raw materials-related industrial processes  

The availability of high-quality technical standards is essential to ensure a level-playing field in 
the single market for businesses and to underpin consumer confidence. Standards can help facilitate 

337 Examples in this respect are the German UFK programme, which provides a government guarantee for privately 
financed projects in third countries provided that a long-term off taker agreement exists with a German client; and the 
French Bpifrance’s Strategic Project Insurance, introduced in 2018, which provides an 80% insurance for projects 
located in France or involving a French business partner. 
338 See also the results of the public consultation. 
339 51% of respondents to the open public consultation agree or strongly agree that accessing private financing for 
CRM projects in the EU is difficult and a challenge for the expansion of the EU’s critical raw materials capacities; 
many respondents are neutral on this question; 9 % disagree or strongly disagree. 56% of respondents agree or strongly 
agree that there is a difficulty to access public funding in the EU; 4 % disagree or strongly disagree. 64% of the 259 
respondents to the open public consultation agree or strongly agree that the price volatility or unpredictability poses a 
challenge to the roll-out of CRM projects in Europe. Some stakeholders make the point that the absence of mining 
activities in the EU taxonomy would make funding and investment unattractive (see Annex II). 
340 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 (Text with EEA 
relevance), OJ L 198, 22.6.2020, p. 13–43  

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the  creation  of  a  transparent  global  market  for  critical  raw  materials.  Currently,  European  and 
international  standards  only  partially  cover  critical  raw  materials-related  industrial  processes, 
including processes involved in their extraction, processing and recycling.  

At the level of the relevant European Standardisation Organisation CEN, a number of technical 
committees exist in charge of the standardisation of metals (aluminium, copper, nickel and steel) 
but new committees have not been created for several decades, and critical raw materials are not 
covered by the work of these committees. What concerns the international aspect, as highlighted 
in  the  recent  EU  Standardisation  Strategy,  other  actors  follow  a  more  assertive  approach  to 
international standardisation than the EU. This has led to a situation whereby in some sensitive 
areas  non-EU  actors  are taking  the  lead at  the  international  level  promoting  their technological 
solutions, which may be inconsistent with the EU’s policies and regulatory framework.   

At the level of the International Standardisation Organisation (ISO), standardisation efforts related 
to  critical  raw  materials  have  been  mainly  instigated  by  non-EU  countries.  The  Chinese 
standardisation body has initiated standardisation on rare earths (2015) and lithium (2020) within 
ISO,  covering  the  whole  value  chain  including  upstream  extraction  and  sustainability.  On  rare 
earths, the results so far point at slow progress as concerns sustainability aspects, and ambition 
level is not at par with what is spelled out in the EU principles for sustainable raw materials.341 
Similarly, at the end of 2021, Standards Australia was allocated the leadership of an ISO Strategic 
Group on Critical Minerals. The mandate of this group was to identify which minerals/metals could 
be standardised in ISO. 342 1  

There currently does not exist a common European strategy to ensure that standardisation efforts 
for critical raw materials sufficiently reflect the sustainability principles underlying EU legislation 
relevant for the critical raw materials value chain. As international standards are an important point 
of reference for the global market, and in the absence of alternative European standards, this risks 
undermining  consumer  confidence  and  making  it  more  difficult  for  EU  buyers  of  critical  raw 
materials to choose sustainable options.  

9.1.18.5. 

9.1.18.6. 

Driver  2.6:  EU  waste  legislation  does  not  sufficiently  target  critical  raw  materials 

recovery 

Circularity is in many ways the optimal avenue to pursue in the area of critical raw materials. The 
reduction in critical raw materials use (material efficiency and substitution), the lifetime extension, 
reuse and remanufacturing of products containing critical raw materials, and their recovery and 
recycling at the end of life can all contribute to lowering demand for primary raw materials and 
thereby  contribute  to  reducing  dependencies.  Secondary  raw  materials  also  generally  have  a 
significantly lower energy and environmental footprint343 compared to primary raw materials.  

341 For REEs, actions focus on the whole value chain including rare earth mining, concentration, extraction, separation 
and conversion to useful rare earth compounds/materials (including oxides, salts, metals, master alloys, etc.), 
covering also sustainability of different processes. 
342 Although work is not yet finalised, several minerals or metals have been identified as being of a particularly 
strategic nature: cobalt, indium, vanadium, graphite, gallium, tungsten. Their mandate was extended by 12 months to 
summer 2023. 
343 For example, the production of secondary aluminium can save up to 95% of the carbon emissions of primary 
aluminium (European Aluminium Association, 2018. Environmental Profile Report https://www.european-
aluminium.eu/media/2052/european-aluminiumenvironmental-profile-report-2018-executive-summary.pdf  

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Figure 11: End-of-life recycling input rate for the EU344 

As most critical raw materials are metals, they are in theory highly recyclable. Currently, however, 
the share of recycled critical raw materials that are used by clean tech industry in Europe is very 
low. This is the case e.g. for rare earths neodymium and dysprosium in permanent magnets in wind 
turbines and for gallium in integrated circuits and lighting in EVs (see figure 11). This is due to the 
fact  that  collection  and  sorting  systems  prevent  end-of-life  metals  from  reaching  recyclers,  a 
number of CRMs are locked in products that have not yet reached their end-of life, most critical 
raw materials are used in low quantities and/or concentrations and are scattered which make the 
recovery processes from end-of-life products technically and economically complex and difficult.  
As  a  result,  CRMs  are  often  disposed  of  at  the  end of  a  product's  lifetime,  or non-functionally 
recycled (i.e. recycled in a way that does not make use of the special properties of the raw material), 
leading to a significant loss of value. Moreover, current recycling practices and waste legislation 
often focus, to a large extent, on waste collection and de-pollution, and on mass recovery but too 
little  on  the  recovery  of  trace  metals  such  as  CRMs,  even  though  many  of  these  may  have  a 
significant intrinsic economic value.  

According to Horizon 2020-funded studies (ProSUM345, SCRREEN346), the most important waste 
streams for CRM recovery are: Extractive waste  ; Waste batteries; Waste electrical and electronic 
equipment (WEEE); End-of-life vehicles; Renewable energy: wind turbines, solar photovoltaics 
(PV) waste. 

Most  of  these  have  dedicated  sectoral  waste  legislation  (Extractive  Waste  Directive,  Batteries 
Directive/proposed  Batteries  Regulation,  WEEE  Directive,  End-of-life  vehicles  Directive), 
specifying  extended  producer  responsibility,  specific  treatment  requirements,  collection  and 
recovery targets etc.; renewables are only partially covered (solar PV under the WEEE Directive, 
for wind turbines, only the electrical and electronic products that are parts of the wind turbines are 
covered so far). In addition, the Waste Framework Directive covers all waste streams horizontally, 

344 Source: EU Raw Materials Scoreboard 2020 
345 ProSUM | Prospecting Secondary raw materials in the Urban mine and Mining wastes (prosumproject.eu) 
346 RESULTS - SCRREEN2 

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setting  targets  for  preparation  for  reuse  and  recycling,  notably  for  household  and  construction 
waste,  requiring  Member  States  to  define  waste  criteria,  draw  up  waste  prevention  and  waste 
management  plans,  and  defining  minimum  requirements  for  extended  producer  responsibility 
schemes.  

Apart  from  the  proposed  Batteries  Regulation,  these  legislations  do  not  specifically  target  the 
recycling  of  critical  raw  materials,  and  therefore  do  not  give  sufficient  incentives  to  separately 
collect  waste  streams  rich  in  critical  raw  materials,  and  to  recover  them.  This  leads  to  a  low 
availability of secondary critical raw materials and an even lower take up of recyclates by European 
industry, as shown in figure 11.  

Existing recycling targets, such as in the WEEE Directive, apply to overall weight ratios rather 
than individual raw materials, which provides an incentive to recover the bulk materials first, as 
this is less expensive, rather than the dispersed critical raw materials. The WEEE Directive in its 
Annex  VII  also  lists  proper  treatment  requirements  that  could  help  to  remove  from  the  WEEE 
collected  components  rich  in  CRM  and  apply  targeted  recovery  operations;  however,  these  are 
currently targeted to hazardous waste components rather than to recovery of CRMs.347  

The Waste Framework Directive already requires Member States’ waste prevention plans and 
waste  management  plans  to  target  products  containing  critical  raw  materials  and  installations 
treating them, but no guidance on specific measures to be taken has been given nor have targets for 
the collection or recovery of critical raw materials been set.  

In countries with an active mining industry or a history of mining activity, mining wastes often 
constitute the largest part of society's total waste flow and stock. Since historically most mining 
operations were targeted at high-volume commodities such as  base metals iron and copper and 
precious  metals,  rather  than  critical  raw  materials,  which  are  often  a  by-product  of  the 
aforementioned, extractive waste may contain significant amounts of critical raw materials. Studies 
have  estimated  significant  amounts  of  critical  raw  materials  such  as  phosphate  rock,  silicon, 
tungsten or cobalt in mining waste (see figure 12),348 and recent industrial projects in Spain349 and 
in Sweden350 show that this can be valorised profitably. In most cases, it is unlikely that a recovery 
process will be economical if it regards a specific critical raw material alone, especially if present 
in low concentration, but by jointly recovering and valorising base metals, critical raw materials, 
and  the  rock  matrix as industrial  minerals and/or  aggregates,  the  process  can be  realised351.    A 
significant  advantage  lies  in  the  fact  that  such  operations  take  place  on  brownfield  sites,  thus 
reducing the risk of additional environmental impacts and conflicting land-use interests. In some 
cases, re-mining of extractive waste can even be an opportunity for rehabilitation of abandoned 
mining sites.352  

A barrier to the full use of this potential, however, lies in the lack of knowledge concerning the 
critical raw materials potentially recoverable from closed and abandoned mines, as well as the risk 
and  liability  assumed  by  a  company  re-mining  a  site  with  potentially  unknown  legacy.  The 
Extractive  Waste  Directive  currently  regulates  primarily  how  to  minimise  and  manage  waste 
generation  and  it  requires  Member  States  to  draw  up  an  inventory  of  closed  and  abandoned 
facilities, but it does not provide incentives or targets to recover critical raw materials from the 

347 Note that at the component level annex VII also includes removal of printed circuit boards and batteries. 
348 JRC (2019): Recovery of critical and other raw materials from mining waste and landfills; pg. 93-98 of SCRREEN-
D3.2-Identification-and-quantification-of-secondary-CRM-resources-in-Europe.pdf 
349  JRC (2019): Recovery of critical and other raw materials from mining waste and landfills , chapter 7.1:“Recovery 
of Tantalum and Niobium from tailings at the old Penouta mine 
350 Critical minerals extracted from mining waste - LKAB 
351 JRC (2019): Recovery of critical and other raw materials from mining waste and landfills 
352  JRC (2019): Recovery of critical and other raw materials from mining waste and landfills , chapter 7.1:“Recovery 
of Tantalum and Niobium from tailings at the old Penouta mine. 

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extractive waste, nor does it oblige Member States or operators to gather information or report on 
the critical raw materials content of the generated waste.  

Figure  12:  Estimated  amounts  of  various  CRMs  in  the  EU-18  in  ‘Extractive  waste  deposed  in 
situ/tailing’ and ‘Stock in tailing’. Source: JRC estimations based on the 2015 MSA study 353 

The  Horizon  2020-funded “Near-zero-waste  recycling  of  low-grade  sulphidic  mining  waste  for 
critical-metal, mineral and construction raw-material production in a circular economy” (NEMO) 
project  found  that  sulfidic  mining  waste  residues,  from  mining  and  processing  sulfidic  ores  to 
produce  copper  (Cu),  zinc (Zn),  lead  (Pb),  nickel  (Ni)  and  critical  metals,  represent the  largest 
extractive waste in Europe. Approximately 600 Mt are produced per year and there is a historic 
stockpile of 28 000 Mt deposited in either tailings storage facilities, dry stacked or back-filled in 
mines. When poorly managed, this waste can become an environmental hazard, causing problems 
such as acid-mine drainage or the outflow of acidic water from mine waste. At the same time, this 
waste represents a new stock of critical metals and minerals needed to move to a green circular 
society. 

NEMO focused on three cases: 1) Sotkamo Ni-Cu-Zn-REE/Sc (rare earth element scandium) mine 
in Finland, 2) Luikonlahti processing facility in Finland (cobalt), 3) Tara Zn-Pb mine in Ireland,  

In  addition,  four  pilots  using  NEMO  technologies  to  demonstrate  cutting-edge  bioleaching 
processes to recover additional metals from sulfidic ores/residues and to boost the conversion of 
sulfides to sulfates – helping to eliminate the risk of acid-mine drainage. It also aimed at ‘cleaning’ 
the  residual  matrix  allowing  its  use  in  cement  and  construction  applications.  The  results  from 
NEMO will provide the EU with a number of benefits: new resources for the metal and agricultural 
sectors, a reduction in CO2 levels in the metal recovery process, and the replacement of ordinary 
Portland cement, addressing acid-mine drainage and other environmental problems. Further steps 
include replicating the technologies and concepts in other mines within the EU and beyond. 

In the open public consultation, 66% of respondents agree or strongly agree with the statement that 
“EU  waste  legislation  does  not  sufficiently  incentivise  the  recovery  and  recycling  of  raw 
materials”. 53% agree or strongly agree with the statement that “shipments of waste containing 

353 Recovery of critical and other raw materials from mining waste and landfills - Publications Office of the EU 
(europa.eu) 

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critical  raw  materials  between  Member  States  are  difficult,  which  limits  possibilities  for  viable 
recycling project”. 

9.1.19.  Sub-problem 3: EU sourcing of critical raw materials is not sufficiently sustainable 

The extraction, processing and refining, as well as the potential recycling, of CRMs is associated 
with a wide range of environmental impacts. For example, the production of rare earth elements 
(REEs), used e.g. in electric motors and wind turbines, is associated with significant material and 
energy consumption and generates large amounts of air and water emissions and solid waste.354 
Similarly,  the  use  of  platinum  group  metals  in  electrolyte  membrane  fuel  cells  is  the  main 
determinant of the fuel cells’ environmental footprint, considering e.g. the acidification impacts 
associated with the extraction of these metals.355  The production of cobalt and lithium, essential 
for  battery  production,  is  amongst  other  things  associated  with  significant  greenhouse  gas 
emissions.356  

It was estimated that greenhouse gas emissions associated with overall primary metal and mineral 
production accounted for approximately 10% of total global energy-related emissions in 2018.357 
In addition, the overall environmental impacts of extraction and processing of key minerals are 
projected to double by 2060, as a result of both the increased scale of extraction and production 
and of declining ore grades.358 Given the expected massive increase in demand, CRMs (which are 
currently all metals and minerals) will likely contribute an increasing share of these impacts. If left 
unaddressed,  therefore,  the  environmental  footprint  of  CRMs  may  cancel  out,  to  an  extent,  the 
environmental  benefits  of  their  use  in  green  technologies  and  could  mean  that  decarbonisation 
comes at the cost of an increase in other environmental impacts. 

9.1.19.1. 

Driver 3.1: The market does not take sufficient account of the environmental footprint 

of critical raw materials 

Given the speed of developments in the critical raw materials sector, it is unlikely that the market, 
left to its own devices, will ensure that all costs associated to the critical raw materials value chain 
are properly identified and internalised. Steering the market toward more sustainable critical raw 
materials,  however,  has  the  potential  to  drive  down  impacts  given  the  differences  in  the 
environmental footprint of critical raw materials available to EU buyers. This is evidenced, for 
example, by the difference in carbon and environmental footprints observable between critical raw 
materials produced using different production methods,359 It is also clear that the varying carbon 
intensity of the energy used in the extraction and refining of CRMs leads to varying environmental 
footprints (see for example figure 13 below, showing different grid emissions factors in cobalt and 

354 Navarro, Julio, and Fu Zhao. "Life-cycle assessment of the production of rare-earth elements for energy 
applications: a review." Frontiers in Energy Research 2 (2014): 45. 
355 Stropnik, Rok, et al. "Critical materials in PEMFC systems and a LCA analysis for the potential reduction of 
environmental impacts with EoL strategies." Energy Science & Engineering 7.6 (2019): 2519-2539. 
356 Gregoir, L., and K. Van Acker. "Metals for clean energy: pathways to solving Europe’s raw materials challenge." Eurometaux, KU Leuven (2022). 

357 Azadi et al. (2020). Transparency on greenhouse gas emissions from mining to enable climate change mitigation. 
358 OECD (2019). Global Material Resources Outlook to 2060.  
359On difference between brine and hard rock based lithium, see "Metals for clean energy’’ report (Gregoir and Van 
Acker)‘. On magnesium, see Ehrenberger, Simone. "Carbon Footprint of Magnesium Production and its Use in 
Transport Applications." (2020). For scandium, see Kaya, Şerif, et al. "Scandium recovery from an ammonium fluoride 
strip liquor by anti-solvent crystallization." Metals 8.10 (2018): 767. For titanium, see Pal, Uday B. "A lower carbon 
footprint process for production of metals from their oxide sources." JOM 60.2 (2008): 43-47. 

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REE producing countries360). In addition, it is clear that recycled CRMs will have generally a lower 
environmental footprint than primary materials, given for example the absence of the extraction 
phase. 

Even  though  stakeholders,  including  downstream  users,  state  that  they  are  willing  to  take  into 
consideration  the  relative  sustainability  performance  when  procuring  materials361,  the  market 
response so far has resulted in the creation of different methods and initiatives, with a varied level 
of reliability and coverage.362 The European Commission developed the Product Environmental 
Footprint (PEF) with the aim to provide a common and robust method to underpin claims made 
about the relative footprint of different materials sold on the EU market, which could support to 
distinguish  between  environmental  performances  of  materials.363.  However,  uptake  of  the  PEF 
method for the assessment of CRM is still limited. 

In  addition,  for  critical  raw  materials,  different  public  and  private  certification  systems  with 
different scopes and coverage are currently available to show the sustainability of raw materials 
sold on the EU market (e.g. the Initiative for Responsible Mining Assurance (IRMA), CERA 4in1 
certification,  World  Bank  Climate  Smart  Mining  Initiative).364    Having  different  overlapping 
schemes  to  show  sustainability  of  critical  raw  materials  placed  on  the  EU  market  can  lead  to 
potential confusion and undermine their effectiveness. Stakeholders have underlined the need to 
assess the suitability of different certification schemes.365 This incomplete information hampers fair 
and transparent competition for critical raw materials producers in terms of sustainability claims. 
Likewise, it hampers sustainable choices to underpin the green transition.  

In addition, even where information is available,  there is currently nothing preventing users of 
critical raw materials from procuring the most impactful materials. It can reasonably be assumed 
that, so long as the negative externalities of CRMs are not accounted for, at least some users will 
continue to be mainly driven by cost considerations and will continue to procure the most polluting 
CRMs.  

360 Source: "Metals for clean energy’’ report (Gregoir and Van Acker) 
361 For example, 186 (72 %) out of 259 respondents to the PC agreed or strongly agreed that CRMs should be 
accompanied by information on their environmental footprint. Business interest is also driven by changing consumer 
preferences: based on a recent EU survey (Consumer conditions survey, European Commission, 2021.), the majority 
of EU consumers being “occasional” consumers of environmentally-friendly products (56%) and more than a quarter 
paying attention to the environmental impact of all or most goods and services (23%), and 67% EU citizens buy 
products that are better for the environment even if they cost more. 
362 There are currently 457 voluntary environmental labels worldwide and over a 100 in the EU (Ecolabel index 2020, 
http://www.ecolabelindex.com/), underpinned by non-comparable methods. 
363 Commission Recommendation of 16.12.2021 on the use of the Environmental Footprint methods to measure and 
communicate the life cycle environmental performance of products and organisations. 
364 See also the overview of different schemes provided in IEA, I. (2021). The role of critical minerals in clean energy 
transitions. World Energy Outlook Special Report, p. 240. 
365 See for example the Call for Evidence submission of the European Automobile Manufacturers’ Association. 

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Figure 13366 

366 KU Leuven/Eurometaux (2022): Metals for Clean Energy. 

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ANNEX 11: EXTENDED INFORMATION FROM THE IMPACTS SECTION 

9.1.20. 

Policy Option 1 – additional information on impacts 

9.1.20.1. 

Impact on Member States 

Regarding the governance structure (pillar C), Member States’ participation to the board and the 
network’s meetings through their representatives is expected to require 2 FTEs per year. Member 
States which do not have a dedicated supply and intelligence capacity yet would be encouraged to 
develop such structure (whether a task force in the ministry responsible or a dedicated body), whose 
size  would  vary  depending  on  the Member  State’s resources.  Since this is  not  an  obligation, it 
would  not  add  burden  on  Member  States.  In  the  public  consultation,  national  authorities  or 
agencies, notably in Sweden, Estonia or France, express support for the development of this type 
of network. 

On  monitoring (pillar  C.1),  rather than  relying  on  national  efforts,  this option would  lead to a 
division of tasks between Member States and enable where possible the pooling of resources to 
jointly  create  missing  capacities.  It  is  deemed  more  efficient  than  the  baseline  to  improve 
monitoring and risk assessment. 

On the coordination of strategic stocks (pillar C.2), this option would require Member States to 
report to the Commission on the state of their strategic stockpiles for strategic sectors, under strict 
confidentiality requirements, which would require 1/4 FTE for each Member States as it would add 
additional workload in the relevant national authority or agency in charge of stocks. It is also likely 
to bring benefits, as the Commission could assess the overall state of stocks in the EU for strategic 
raw materials and could point out, with the agreement of the concerned Member States, to potential 
areas  of  convergence.  Member  States  have  also  indicated  their  preference  for  this  type  of 
coordination compared to more stringent obligations forcing them to build additional stocks. 

Regarding exploration (pillar D), since most of the actions are voluntary, Member States would 
implement only those that are part of their core and regular activities. The only obligation would 
be  the  regular  classification  of  potential  projects  with  the  UNFC  classification  framework  and 
reporting to the commission. This is a task that requires minimum investment (1/2 FTE) by national 
Geological Surveys or other national competent authorities.  

The requirement to set up strategies to support the value chain (pillar E) to increase access to 
stable and secure supply of CRMs would result in some additional costs for Member States, which 
would amount to 2 FTE per Member State for half a year to develop the strategies on a one-off 
basis and then on average 1 FTE to follow-up and implement the strategies.  

Regarding permitting (pillar E.1), this option is expected to result in additional costs for Member 
State authorities. Structural integration of CRM projects in spatial plans and the application of the 
SEA Directive to those plans would imply an additional cost to responsible planning authorities. 
However,  this  cost  will  depend  on  the  actual  potential  for  CRM  project  in  the  area  under 
consideration for the spatial plan, and the related amount of potential impact to be assessed, as well 
as the extent to which Member States already voluntarily apply the procedure. As also concluded 
in a recent evaluation of the SEA Directive, there are currently not enough comparable quantitative 

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information available on the costs of the SEA procedure.367 However, it is clear that costs would 
be involved stemming from e.g. additional man-hours invested and external consulting services.  

On waste legislation (pillar F), this option would not add additional work to Member States’ policy 
development. 

Regarding  environmental  footprint  (pillar  H),  this  option  would  entail  additional  burden  for 
Member States, who would have to devote resources for the enforcement of a new obligation of a 
very technical nature. The market surveillance authorities of Member States will have to invest in 
developing the necessary skills to ensure that the footprint declarations, as well as the third-party 
verifications, are performed properly. They would also have to regularly check whether CRM sold 
on their market are not sold with reference to non-recognized certification schemes. This may entail 
training and/or hiring costs. The amount of FTEs needed for this task would depend on the amount 
of CRMs sold on a specific national market as well as the amount of relevant economic operator 
active on that market. 

9.1.20.2. 

Impacts on the Commission 

Regarding  the  governance  structure  (pillar  C),  the  costs  accounted for are  those  pertaining  to 
supporting the organisation of the board and network, notably through a common secretariat. In 
terms of direct costs, this can be estimated at EUR 75.000 per year, given the standard budget for 
a meeting with 27 Member States experts of EUR 15.000 , and given that on average 5 meetings 
would be required per year, either by the board or the operational capacity, on tasks pertaining to 
pillars A and B (once every 2/3 years), pillar C1 (2/3 times per year), pillar C2 (once per year), 
pillar D (once every 2/3 years), pillar E (once every 2/3 years). In terms of human resources, the 
secretariat and coordination provided by the Commission would consist of 2 FTEs. 

Regarding  monitoring,  data  gathering  and  risks  assessment  (pillar  C.1):  additional  capacity 
would be needed in the Commission to implement the tasks developed. The costs would relate to 
17 FTEs for data gathering, monitoring and analysis (similar to HERA.2 Intelligence Gathering, 
Analysis  and  Innovation  Unit),  which  in  detail  would  mean  10  FTEs  for  market  monitoring, 
drawing  on  expertise  from  JRC  including  links  to  the  RMIS  and  existing  agencies,  so  as  to 
concentrate on mineral and metal raw materials, with 1 FTE dedicated to the management of studies 
and contracts, 1 FTE dedicated to access to data and building up the relevant dataset of information 
and 5 FTEs to ensure the coordination of information gathering from Member States and support 
the governance structure. 

The coordination of strategic stocks (pillar C.2) would also require additional resources to analyse 
the  state  of  strategic  stocks  as  provided  by  Member  States,  coordinate  actions  (e.g.  in  the  IEA 
working  group)  and  provide  guidance,  when possible,  which  would  be  assessed at  3  FTEs  and 
could be detached from national authorities in charge of stocks.   

Regarding  exploration  (pillar  D),  the  impact  relates  to  coordination  of  Member  States’ 
submissions, which corresponds to 1 FTE per year.  

On waste legislation (pillar F), this option would consist in business-as-usual policy development 
within the Commission. 

The measures on standards for the critical raw materials value chain (pillar G) would have 
budgetary implications for the Commission. Coordination and planning of efforts to have for EU 

367 See Study concerning the preparation of the report on the application and effectiveness of the SEA Directive 
(Directive 2001/42/EC) - Publications Office of the EU (europa.eu), p. 14. 

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rules and principles to be reflected in international standards would require 1 FTE on a continuous 
basis. 

Regarding environmental footprint (pillar H), this option would entail additional burden for the 
Commission,  which  would  be  responsible  for  assessing  the  suitability  of  different  certification 
schemes and check them against the criteria, as well as monitor their continued compliance. This 
is expected to require 1 FTE per year.  

In addition, the Commission would be responsible for coordinating the development and adopting 
the  relevant  calculation  methods.  This  is  expected  to  require  2  FTEs  per  year  as  well  as  costs 
associated with external studies to develop methods, procuring secondary datasets and consulting 
stakeholders. 

9.1.21. 

Policy Option 2 – additional information on impacts 

9.1.21.1. 

Impact on Member States 

The  mechanism  set  to  determine  targets  for  EU  capacity  and  the  dialogue  and  reporting  that 
Member States would have to commit to can be considered as having no budgetary consequence 
on Member States, since they would only have to comply to it in the event that such targets are not 
met. Member States would however have to report on the state of CRM projects in general on their 
territories, which would amount to a regular cost of 1/4 FTE. 

Regarding  the  governance  structure (pillar  C)  and  the  sub-pillars  on  monitoring,  stockpiling 
and company risk preparedness, the costs and benefits would be the same as in option 1. 

On exploration (pillar D), the costs on Member States are more substantial as the option commits 
them  to  undergo  further  exploration  programmes  with  a  view  to  reinforce  the  knowledge  and 
mapping of the EU’s mineral resources. Since all Member States already have a body or team in 
charge  of  geological  mapping,  additional  geological  mapping  should  not  incur  extra  costs. 
However, the development and implementation of wider mineral exploration programmes would 
require additional one-off costs, which would depend on the ambition of each MS.  In total for all 
Member States, such cost could amount to EUR 82 million for aerial geophysical survey and EUR 
80 million for geochemistry mapping survey, in addition to side costs (e.g., interpretation)368.  

Regarding  permitting  (pillar  E.1),  this  option  is  expected  to,  in  addition  to  option  1,  result  in 
limited additional costs for Member State authorities.369  

Better  coordination  or  integration  of  different  types  of  assessments  and  permits  can  result  in 
reduced burden. However, a reorganisation of the administration in some Member States may be 

368 Aerial geophysical survey (Mag. + Spec) for EU, assuming the coverage of half the EU (excluding the sedimentary 
basins) at 250 m spacing (and 10 €/kml) :EUR 82 M  + 10% for designing, tendering, and managing the campaigns and 
sub-contractants + 10% for interpretation. (EUR 98,4 M) 
The geochemistry mapping survey for EU assuming a 10 km2 sampling (covering half of the EU, including the analysis 
of metals and interpretation of the data) would need an investment of EUR 80 M  +5% for tendering and managing 
the campaigns and sub-contractants. (EUR 84M) 
FTE per MS: 1 unit of 10 FTEs for aerial geophysics (already operative in some MS) 1 unit of 10 FTEs for geochemical 
survey (also already operative in some MS) Data reprocessing and predictivity maps: 1 unit of 5 FTEs. Classification 
and reporting to the Commision: 1/2 FTE   
369 The assessment below is based on the assessment of similar measures in the impact assessment accompanying 
the 2012 proposal for revision of the EIA Directive – see footnote 93.  

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required and, in the short term, this may be costly. However, as this measure will avoid duplication 
of efforts at the various stages of the EIA process, it is expected to reduce administrative burden in 
the medium to long term.  

Changes  related  to  time-frames  will  shorten  procedures  but  are  not  expected  to  increase 
administrative burden. The time-frame for public consultation on the environmental report does 
not entail any direct costs for public authorities. The proposed time limits for decision-making are 
based  on  time-frames  that  are  often  already  achieved  and  aim  mainly  to  prevent  outliers  and 
increase predictability of the process. In addition, time limits can in some cases provide incentives 
to public authorities to consolidate internal processes. 

Mandatory  scoping  for  Strategic  Projects  is  expected  to  have  no  net  effect  on  the  burden  for 
authorities.  Although  there  are  extra  costs  involved  for  MSs  where  scoping  is  not  currently 
mandatory, those costs are likely to be offset by the fact that resulting reports would be of better 
quality and more focused. Thus, authorities would spend less time requesting further information 
to developers, reviewing lengthy reports and asking for successive modifications of these reports. 

Efforts to allow documents to be submitted digitally and to make available a manual of procedures 
for developers of Strategic Projects will imply additional costs, especially in the short term, the 
amount of which will depend on the extent to which a Member State already takes these measures 
generally. 

Regarding the selection of strategic projects (pillar E), Member States would participate in board 
meetings  with  the  Commission  to  designate  Strategic  Projects.  These  meetings  could  occur  bi-
monthly and would need ½ FTE. This option however enables Member States to support projects 
in  their  territory  with  a  European  strategic  dimension  and  access  to  the  appropriate  funding 
instrument, thereby creating added value on their territory.  

The management expenses of the fund (pillar E.2) would be paid directly from the capital under 
management  (usually,  1  to  2%  are  standard  practice370).  This  would  slightly  reduce  the 
effectiveness of the fund but would not require additional financial resources from the Member 
States, the Commission or the fund manager. The same holds for the costs of setting up the fund, 
which would directly be paid out from the fund’s capital.  

On  waste  legislation  (pillar  F),  in  addition  to  the  effects  described  under  option  1,  this  option 
would require Member States to transpose the amendments to the Extractive Waste Directive into 
national law, creating minor administrative costs that could be included in other ongoing revision 
processes.  It  would  also  require  them  to  develop  a  national  circularity  strategy,  which  likely 
Requires 1 FTE per Member State to develop and implement. 

The  greatest  additional  burden  for  Member  States  consists  in  the  obligations  created  under  the 
Extractive  Waste  Directive.  They  would  be  required  to  create  a  database  of  all  closed  and 
abandoned  waste  sites,  screen  their  available  data  on  such  sites  and  perform  a  geochemical 
campaign to complement this information. It is estimated that 3-4 FTE experts per Member State 
would be required to fulfil this obligation.  

In the open public consultation, 68% of respondents agree or strongly agree that the Critical Raw 
Materials Act should require Member State to design waste management plans including specific 
measures  to  promote  the  recovery  of  critical  raw  materials,  from  historical  mining  waste.  78% 

370https://www.investopedia.com/articles/investing/072115/private-equity-management-fees-
regulation.asp#:~:text=Private%20equity%20funds%20have%20a,committed%20capital%20of%20the%20fund 

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agree  or  strongly  agree  that  it  should  strengthen  exploration  and  documentation  of  critical  raw 
materials in secondary deposits and waste streams. 

Regarding environmental footprint (pillar H), this option would entail roughly similar impacts as 
in option 1, with the only additional task being the need to check whether the declared footprints 
meet the thresholds where they are set. 

9.1.21.2. 

Impacts on the Commission 

Regarding the governance structure (pillar C), and the following sub-pillars on stockpiling and 
company risk preparedness, the costs are the same as in option 1. The monitoring and intelligence 
gathering  and  forecasting  to  support  the  assessment  of  critical  and  strategic  raw  materials  will 
require additional 20 FTEs. 

However, it is assessed that the new missions enabled by the exploration (pillar D) would require 
1  additional  FTE  (comprised  in  the  governance)  to  ensure  the  coordination  of  the  new  data 
compiled under this option.  

 Regarding the selection of Strategic Projects (pillar E), the Commission would need to send a 
representative to the board to determine the selection of Strategic Projects. Preserving the European 
angle  would  require  more  resources  than  the  Member  States,  this  would  amount  to  1  FTE 
(comprised in the governance). The assessment for  projects would also fall on the Commission. 
However, it should be noted that the Commission is currently already assessing the usefulness of 
projects abroad, for example in its work on the Mineral Security Partnership. Hence, this obligation 
should not result in additional resource requirements 

On waste legislation (pillar F), this option would require increased enforcement of the obligations 
under  the  Extractive  Waste  Directive  (notably  the  database  of  closed  extractive  waste  sites), 
performed by1 AD FTE continuously.  

Regarding standards for the critical raw materials value chain (pillar G), this option would, in 
addition to option 1, have budgetary implications for the Commission. Promoting the development 
of technical standards regarding relevant industrial processes would require substantial additional 
resources, the estimation would be 1 FTE to prepare approximately 3 standardisation requests per 
year. 

Regarding environmental footprint (pillar H), this option would, in addition to option 1, entail 
additional burden for the Commission to prepare performance classes and minimum thresholds.  

9.1.22. 

Policy Option 3 – additional information on impacts 

9.1.22.1. 

Impact on Member States 

On targets (pillar B.) and on exploration (pillar D), the costs are the same as for option 2. 

Regarding the governance aspects (pillar C) and the corresponding actions under sub-pillars C.1, 
C.2 and C.3, the indirect costs for Member States relate to their contribution to the EU budget to 
enable the creation of this operational structure. 

Regarding permitting (pillar E.1), this option has the same impact as under option 2. 

On waste legislation (pillar F), this option has the same impact as under option 2.  

On environmental footprint (pillar H), this option would have the same impact as option 2. 

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9.1.22.2. 

Impacts on the Commission 

The detailed costs of an operational capacity are already explained in chapter 6, with around 100 
FTEs. In comparison, Japan’s CRM agency JOGMEC has around 600 staff (2 groups on metals 
and minerals, 3 groups on oil, gas and geothermal energy and a horizontal stockpiling unit. The 
German Mineral Resources Agency (DERA) has 30 staff conducting market surveillance for raw 
materials. The International Energy Agency has around 6 FTEs working for its new Working Party 
on Critical Minerals (CMWP) and is in the process of expanding its staff numbers. 

On waste legislation (pillar F), this option has the same impact as under option 2.  

For standards for the critical raw materials value chain (pillar G), this option would have the 
same impact as option 1 and 2 combined. 

For environmental footprint (pillar H), this option would have the same impact as option 2. 

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ANNEX 12: ESTIMATION OF INVESTMENT NEEDS 

The estimation of investment needs in the context of the problem section is based largely on the 
Total Investment requirement for battery grade raw materials for batteries sold in the EU over the 
period 2022-2040 calculated by JRC. The JRC’s calculation approach is set out here: 

Methodology: 

  The  demand  of  refined  battery-grade  raw  materials  (i.e.  products  for  use  by 
cathode/anode makers) is computed on the end-use demand for batteries (sold batteries in 
the  EU,  placed-on-the-market)  after  considering  production  yields  in  the  midstream 
stages of cell manufacturing and cathode/anode production. The supply deficit is derived 
after subtracting supply from the existing/operating installations in 2021.  

  From the supply deficits calculated above, an investment requirement is calculated for 
new capacity of battery-grade raw materials. The cumulative investment requirement in a 
given year is defined as the sum between the previous years’ requirement and the additional 
capacity units needed to be constructed in the current year. 2022 is set as the first year. 
  Considering  that  the  investment  requirement  for  battery-grade  raw  materials  can  be 
mitigated by EOL battery recycling, the results also present the investment requirements 
after taking into account the expected supply of secondary raw materials.  

  The  ‘investment  requirement’  could  be  interpreted  as  the  total  investment  needed  for 
additional new supply to achieve self-sufficiency of battery-grade raw materials for 
end-use  demand  in  the  EU.  If  investment  requirement  is  plotted  versus  investments 
already  in  the  pipeline,  the  difference  will  highlight  the  annual  cost  of  new  capacity 
required  to  be  brought  online  to  bring  the  market  back  into  balance.  Should  the 
development of additional capacity be lagging, the reliance on primary supply of battery-
grade  raw  materials  will  remain.  The  overall  downstream  self-sufficiency  requires  that 
cathode/anode capacity will be developed on time to treat refinery output, and that cell 
manufacturing capacity will be able to satisfy end-use market demand (so that all demand 
for battery sales could be satisfied by the EU cell producers). 

  Only the refining step is considered in the analysis. Refineries are considered to have a 
greater  potential  for  investing  in  additional  capacity  compared  to  the  upstream  supply 
segment  of  mining.  Mining  is  excluded  from  the  analysis;  if  it  is  included,  it  could  be 
reflected by the CAPEX of the projects in the pipeline, as developing new projects and/or 
expanding  existing  mining  capacity  within  the  next  years  in  the  EU  is  constrained.  As 
primary  metal  production  capacity  exceeds  mining  capacity,  imports  of  mineral 
concentrates and intermediates would be needed to feed this additional refining capacity. 
Finally,  investment  requirements  for  battery  cell  manufacturing  and  anode/cathode 
production are excluded from the results.  

Data on investments are coming from various sources:  

o  Company announcements and feasibility studies  
o  S&P database 
o  Other sources, e.g. Roskill study for JRC (Ni) 

Data on supply and demand are based on JRC internal forecast analysis, mostly from the battery 
model developed in 2021 for DG GROW. Table 5 displays data for demand 

 Table 5: Forecast of demand for battery-grade raw materials, latest update September 2021 

2020 

2021(f) 

2025(f) 

2030(f) 

2035(f) 

2040(f) 

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Cobalt 

32,000  

   37,000  

   69,500  

   92,500  

  116,000  

  124,500  

Nickel 

44,500  

   60,000  

  183,500  

  378,000  

  541,000  

  645,000  

Graphite 

63,500  

   85,500  

  233,000  

  489,000  

  743,000  

  930,500  

Manganese 

18,000  

   23,000  

   51,000  

   70,000  

   95,000  

  111,000  

Lithium 
(LCE) 

73,000  

   92,500  

  222,500  

  449,000  

  679,500  

  865,000  

LCE = Lithium Carbonate Equivalent, NB: rounded values, Source: JRC 

The initial CAPEX used in the calculations is defined as the median of the data sample collected 
(except  for  Ni,  for  which  Roskill  data  are  used).  Table  6  shows  the  figures  applied  in  the 
calculations:  

Table 6: Initial CAPEX used for calculating investment needs 

Material 

Product 

Capital 
intensity 
(initial  capital 
cost) 

Unit 

Plant type  Source 

Nickel 

Ni Sulphate 

28,500 

EUR/t Ni 

Greenfield 

Roskill 
Ni 
study for JRC 
(2021) 

Cobalt 

Refined Co 

13,000 

EUR/t Co 

Brownfiel
d 
and 
Greenfield 

JRC 
compilation 

data 

Graphite 

Purified spherical 
graphite 
(PSG)371[1] 

12,500 

EUR/t 
PSG 

Greenfield 

JRC 
compilation 

data 

Manganese  HP MSP372[2]  

15,000 

EUR/t Mn  Greenfield 

Lithium 

Li  carbonate  and 
Li hydroxide 

15,500-
17,000373[3] 

EUR/t 
LCE374[4] 

Greenfield 

JRC 
compilation 

data 

JRC 
compilation 

data 

Source: JRC 

371 Purified spherical graphite refined from natural graphite; data for spherical graphite not available 
372  HP EMM:  High-Purity  Electrolytic  Manganese  Metal;  HP  MSP:  High-Purity  Manganese  Sulphate  Monohydrate. 
Data for EMM (High Purity Electrolytic Manganese Metal) not available 
373 Production demand for Carbonate and Hydroxide is estimated in each year according to the battery chemistry forecast 
until 2040. The initial CAPEX is calculated accordingly, taking also into account the different feedstock material i.e. Li 
carbonate plants (processing Li concentrates): EUR 13,000/t LCE; Li hydroxide plants (processing Li concentrates): 
374 LCE = Lithium Carbonate Equivalent 

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Results visible in the following figures: 

Figure  14:  Cumulative  investment  requirement  for  battery-grade  raw  materials  from  primary 
sources (supply from secondary raw materials excluded) for batteries sold in the EU 

Source: JRC 

Figure  15:  Cumulative  investment  requirement  for  battery-grade  raw  materials  from  primary 
sources (supply from secondary raw materials considered) for batteries sold in the EU 

Source: JRC 

Notes 

 

 

the demand for production is derived from the consumption of batteries. Last data update 
in September 2021; 
the demand for production includes all other uses (not only batteries), while recycling is 
considered only for the battery sector; 

  only  the  refining  stage  is  represented  in  the  graph,  not  the  upstream  investment  for 

mining/exploration, nor investment for recycling capacity; 

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 

 

 

 

for  manganese:  only  Li-ion  batteries  are  considered;  LMO  and  primary  batteries  are 
excluded; 
for  graphite:  the  demand  considers  the  overall  demand  of  graphite  (i.e.  natural  and 
synthetic). The capital investment refers only to refined battery-grade graphite produced 
from natural graphite feedstock; 
for  lithium:  the  initial  capex  considers  a  split  between  the  future  needs  for  lithium 
carbonate  and  lithium  hydroxide  (based  on  anticipated  battery  chemistries  of  batteries 
placed on the EU market); 
for nickel: existing supply in 2021 includes Class I Ni and Ni sulphate. It is noted that 
Class  I  supply  is  considered  to  be  directed  for  conversion  to  sulphate.  Availability  is 
dependent on demand from other Class I consuming industries. 

Final remarks 

1.  The investment requirements for lithium, nickel and graphite are much higher compared 

to cobalt and manganese until 2040. 

2.  Investment needs amount to almost EUR 10 billion already in 2025 (Figure 15), mainly on 
lithium, nickel and graphite. The most intense investment requirement for refined capacity 
of battery-grade RM from primary sources is in 2025-2030 (primarily for nickel, followed 
by lithium and graphite). 

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