Debate: Access to strategic critical raw materials
Date: WEDNESDAY, 15 FEBRUARY 2023
Speaker: Mairead McGuinness
Language: EN

Critical raw materials are of paramount importance for the deployment of the technologies that enable the green and digital transitions and strengthen our resilience. But it is true to say that the EU remains heavily dependent on concentrated supply sources from a few third countries. China provides over 90% of the EU’s magnesium supply and 98% of rare earth supply. Turkey provides 98% of borate and South Africa 71% of platinum group metals.  We need, therefore, to combine an increase of domestic production where we can, including through recycling, with the diversification of sources of supply through reinforced international engagement, in full respect of highest environmental, social and governance standards.  To meet these challenges, we’re preparing a European Critical Raw Materials Act, which will rest on four pillars.  First, the act intends to define the critical raw materials that can be considered as particularly strategic to rally a collective effort and give a much-needed signal to private investors on priority needs.  Second, the act intends to strengthen the EU’s critical raw materials value chain, from mining to refining to processing, recycling and ensuring, as asked by this Chamber, the high social and environmental standards. To this end, we intend to support the emergence of strategic projects which would contribute to increasing the EU’s capacity and would in turn benefit from more transparent approval procedures, streamline permitting, and better access to investment opportunities. We want to promote such strategic projects here in Europe, but also in third countries to reinforce partnerships and collaborations. Third, we intend to promote circularity in the critical raw material value chain, including by removing critical raw materials from extractive waste. This is really important for permanent magnets. And fourth, it’s essential to set up a governance system that facilitates collaboration among raw materials agencies and increase risk preparedness.  Such an ambitious plan requires ambitious resources. We need a massive, unprecedented investment push. Besides the support of strategic projects, we’re working closely with the business sector through the European Raw Materials Alliance to help project promoters get access to private finance. And we are advancing on State aid rules to help to accelerate the green and digital transitions, in particular when it comes to the temporary crisis and transition framework while maintaining a level playing field.  But the European Union cannot extract, process, recycle and refine all of the critical raw materials it needs. Today and for the foreseeable future, we will continue to rely on imports, but we need to diversify our supply sources. We need to enhance our partnerships with third countries to secure and boost trade flows, using the EU’s vast framework of trade and investment agreements and extending our bilateral strategic partnerships, focusing on raw material value chains.  In doing so, we need to help third countries to move up and develop local value chains in a sustainable way so as to ensure that partnerships become win-win and help to strengthen economic and political bonds.  These challenges being global, we need a global response. As announced by President von der Leyen, the EU will establish a critical raw materials club to work together with like-minded raw materials consumers and resource-rich countries, using the Global Gateway framework to its full effect.  The EU needs to continue developing more strategic partnerships with reliable partners to diversify our supply sources, but also to consider how to make more sustainable and resilient our relationships with all our major trading partners in this sector. And, to this end, the act will be accompanied by a communication further detailing the EU integrated approach to ensure a secure and sustainable sourcing of critical raw materials with a specific focus on the external dimension.  On sustainability in particular, we need to ensure that the sourcing and investment in critical raw materials promote labour rights and environmental protection.  Honourable Members, when we talk about the green and digital transition, about technological sovereignty, we first need to talk about the supply of critical raw materials – its security, affordability and sustainability. And that’s why I believe that the upcoming package is of huge importance to the European Union. I very much look forward to this debate and indeed there has been a link between all of the debates that I have participated in this evening, so it shows that things are circular and in the issue of critical raw materials, we are at a critical juncture.