The list of Critical Raw Materials for the EU, 2017 (linked to the Renewed EU Industrial Policy Strategy)
Description
Given the strategic importance of raw materials for the EU manufacturing industry, the Commission implements many actions under the EU Raw Materials Initiative for their secure, sustainable and affordable supply. The 2017 list of critical raw materials for the EU is a central element of this Initiative. The primary purpose is to identify raw materials with a high supply-risk and a high economic importance to which reliable and unhindered access is a concern for European industry and value chains. The list shows the importance of critical raw materials that enable the transition to a low-carbon, resource-efficient and more circular economy.
The list of critical raw materials results from the criticality assessment based on two indicators - economic importance and supply risk. The latter integrates the concentration of primary supply from raw materials producing countries, considering their governance performance (including environmental aspects under the World Governance Index (WGI)), along with trade and recycling aspects.<br />
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The list of critical raw materials provides a factual tool for trade, innovation and industrial policy measures to strengthen the competitiveness of European industry in line with the renewed industrial strategy for Europe, for instance by: <br />
• identifying investment needs which can help alleviate Europe's reliance on imports of raw materials;<br />
• guiding support to innovation on raw materials supply under the EU's Horizon 2020 research and innovation programme;<br />
• drawing attention to the importance of critical raw materials for the transition to a low-carbon, resource-efficient and more circular economy.<br />
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Critical raw materials are a priority area in the EU Circular Economy Action Plan, and the list helps incentivising the European production of critical raw materials through enhancing recycling activities and when necessary to facilitate the launching of new mining activities (noting that mining is in full competence of the EU Member States).<br />
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Critical raw materials enable decarbonisation as they are essential to produce the hardware equipment. Rare earth metals are used in the construction of windmills, silicon metals for photovoltaics. In the transition to low-carbon mobility higher quantities of critical raw materials will be needed to enable the large-scale roll-out of electric vehicles - e.g. cobalt, graphite, lithium for batteries, niobium for lightweight vehicle body structures.<br />
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The Commission uses the list as a supporting element when implementing the 2030 Agenda on Sustainable Development and its Sustainable Development Goals, in the negotiations of trade agreements, when challenging trade-distortive measures, developing research and innovation actions. It was also used for the Report on Critical Raw Materials and the Circular Economy (2018) which looks at supply side (mining, landfills) and demand side (electrical and electronic equipment, batteries, renewable energy and other sectors) and which analyses how to increase the supply of critical raw materials through increased circularity. <br />
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27 raw materials are included in the 2017 list, which builds on an evaluation of 78 raw materials.
The Commission adopted the first list of 14 CRMs in 2011 and committed to regularly monitor and update the list, at least every three years, to take into account market and technological developments. A revised list of 20 CRMs was adopted in 2014.
The 2017 list of CRMs builds on the results of a study carried out by an independent group of consultants (BRGM, BGS, TNO with Deloitte in lead), based on a refined methodology developed by the Commission (DG GROW and DG JRC). The whole consultation process (internal and external), which covered the revised methodology and the study, started in early 2015 and involved a dedicated Ad hoc Working Group on defining critical raw materials, with wide-ranging participation of stakeholders (industry and scientific experts, geological surveys), representatives from EU Member States and the Commission.
A key aspect of stakeholder consultation were data validation workshops (organised in autumn 2016 in Brussels) in order to allow stakeholders to review and validate the data used for the criticality calculations and information used in the raw materials factsheets.
The European Commission is directing close to 600 million EUR of funds to research and innovation projects on raw materials under the "Societal Challenge 5" of its funding programme Horizon 2020 (2014-2020). So far, out of 66 projects selected in total for funding (of over EUR 365 million), more than half of the projects are linked to some extent to critical raw materials. These projects cover the exploration, extraction, processing, recycling or substitution of CRMs.
Importance of the criticality assessment for EU battery value chain:
The criticality assessment 2017 analysed the economic importance and risk of supply of 78 raw materials, including among others battery raw materials which are key for the transition to clean energy and mobility, including the electric vehicles. The assessment provided a good understanding of challenges related to access to battery raw materials summarised in dedicated critical and non-critical raw materials factsheets. The knowledge gathered throughout the assessment contributed to the development of Battery Action Plan (BAP), which combines targeted measures at EU level including in raw materials (primary and secondary), research and innovation, financing/investment, standardisation / regulatory, trade and skills development, in order to make Europe a global leader in sustainable battery production and use, in the context of the circular economy. Securing the sustainable supply of raw materials, from outside and within the EU and through recycling, is one of the BAP’s strategic action areas. The Report on Raw Materials for Battery Applications, issued along with the BAP, informs in detail of the implementation of this strategic action.
Securing reliable and unhindered access to certain raw materials has been a growing concern for the EU. Exploration, extraction and recycling of these materials have been facing major technological, social and/or economic challenges in a strongly regulated environment. Access to raw materials is often impeded by trade or market distortions.
This is why, in 2008, the Commission launched the Raw Materials Initiative, an integrated strategy to tackle challenges related to raw materials, with a priority action to define 'critical raw materials' (CRMs) for the EU (i.e. those of a high economic importance and a high supply risk). Since then, the Commission regularly monitors and carries out the criticality assessment of raw materials, which resulted so far in adoption of the first list of 14 CRMs in 2011 and the revised lists of 20 CRMs in 2014 and of 27 CRMs in 2017.
The EU is highly dependent on raw materials to sustain businesses and the economy. It is estimated that 30 million jobs in the EU are directly reliant on access to raw materials, while a large number of materials are produced and supplied by third countries. Although the domestic production of certain critical raw materials exists in the EU, notably hafnium, in most cases EU is dependent on imports from third countries as mentioned above (section enabling factors and constraints).
The risks associated with the concentration of production are in many cases compounded by low substitution and low recycling rates. Although secondary supply can reduce the demand for primary materials, for many materials very little recycling occurs and for others it cannot completely replace primary supply even though recycling rates are high. At the same time, substitutes can mitigate the risk of supply disruption, but many materials are not substitutable without losses in performance or are substitutable at a higher cost. Therefore, much of Europe’s industry and economy is reliant on international markets to provide access to crucial raw materials. All these factors have been analysed and monitored by the Commission under the framework of criticality assessments, with a view to boosting mining and recycling activity in the EU and supporting EU industry in prioritising needs and actions concerning supply diversification and product design.
Many countries and regions have embarked on the transition to a low-carbon and more circular economy. As a direct result, we will globally be facing an increasing raw materials' supply risk in the near future. In fact - the pressure on fossil fuels will give way to a pressure on raw materials.<br />
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In the EU, the importance of raw materials, particularly critical raw materials, for the competitiveness of all industrial value chains is acknowledged in our Renewed Industrial Policy Strategy. We have identified 6 priorities: clean, smart, internal market, innovation, investment and the international dimensions. Clean and smart require both a lot of raw materials.<br />
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The EU needs therefore to secure access to raw materials from resource-rich countries outside the EU. It also needs to facilitate access to European sources of raw materials, be they primary raw materials or secondary raw materials developing a more circular economy. <br />
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The list of critical raw materials is a key tool in Europe’s transition to a low-carbon and more circular society.
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Lucian Parvulescu, Policy Officer