Debate: Framework for ensuring a secure and sustainable supply of critical raw materials
Date: WEDNESDAY, 13 SEPTEMBER 2023
Speaker: Johannes Hahn
Language: EN

The challenge we face for a secure and sustainable access to critical raw materials is substantial and the variety of instruments we will need to address is complex. Finding an agreement in the committees in this timeline is a great accomplishment. I hope to see the plenary adopt its mandate tomorrow, allowing us to advance to the institutional negotiations. Speed is essential in this area, as 2030 – the year for which our manufacturing capacity benchmarks are set – is just around the corner. If we think about timelines to develop new greenfield industrial projects. At the same time, geopolitical tensions are rising and global competition for resourcing is intensifying, which require action now. Take, for instance, China’s announcement in July – some colleagues have already referred to it – of export restrictions on gallium and germanium. It is yet another sign that it is ready and willing to use its dominance of the raw materials stage to pressure European industrial ambitions. This example shows how exposed we might be, but also that we are on the right track. We have a good overview of the sector and can mobilise suppliers and downstream actors to work together and develop alternative supplies for gallium and germanium. But, at the same time, we need a more structural approach. For this, the Critical Raw Material Act is indispensable. So what are the main elements of it? As you certainly know very well, the core of the Commission’s proposal revolves around setting an ambition for 2030 for extraction, processing, recycling and diversification. To achieve these ambitions, strategic projects will be selected within the Union and in partner countries and will benefit from streamlined permitting and improved access to finance. The Critical Raw Materials Act also proposes a framework for monitoring and mitigating risks. For instance, the critical Raw Material Board will pull together knowledge and data to provide an effective monitoring system. This, together with an obligation for large, downstream users of critical raw materials to analyse risks in their supply chains should encourage the private sector to invest more into security of supply measures. And, we propose to do so minimising the administrative burden and sharing only non-sensitive information on a need-to-know basis. Security of supply goes hand in hand with sustainability, because sustainable extraction is more resilient to societal and environmental disruptions. The Critical Raw Materials Act therefore also supports sustainability. First, by making sure we maximise the potential of circularity through resource efficiency, product design rules and the recovery of critical raw materials from waste. Second, by using environmental footprint declarations for selected critical raw materials, which will help buyers identify and push for more sustainable suppliers. Finally, we all know that most raw materials, at least at the extraction stage, will continue to come from outside the Union. That is why we have to continue pursuing a targeted raw materials diplomacy. We have successfully negotiated several strategic partnerships over the last months, including with Chile or Argentina, and we can use the critical raw material support to better coordinate European and Member States’ efforts. We are also negotiating a critical materials agreement with the United States. The President of the European Commission and the US President expressed the intention to start negotiations on such a targeted agreement in March. On 20 July, the Commission received the Council’s authorisation to officially start negotiations. So, ladies and gentlemen, the large number of amendments tabled and the desire of multiple committees to add their specific perspective on the file – from regional policy to international development – show that Parliament understands well the importance of critical raw materials for many of the Union’s ambitions. The lead committee’s report shows clear positioning on some important aspects of the proposal. Strict permitting timelines are indeed essential and must not be watered down. Engagement with local with local communities is a precondition for successful projects. Reducing demand for primary extraction through circularity should be the first priority. And finally, that partnerships with developing countries should help them move up the value chain and benefit their broader economies. It is encouraging to see strong engagement and at the same time, the broad agreement across political groups that has been reached. In this spirit, we are looking forward to the debate today and in particular – and may I say more importantly – the upcoming trilogue negotiations.