EU Critical Raw Minerals Act Highlights Intensifying Competition in Race to Net Zero

Abstract

Global competition to ensure a secure supply of critical raw materials (‘CRMs’) is driven by two principal factors: the burgeoning global demand for CRMs deemed critical to the green and digital transition, as well as the defence sector; and supply chain characteristics accentuated during the COVID-19 pandemic and exacerbated by Russia's invasion of Ukraine. The EU has entered the CRM arms race with the EU Commission's proposed CRM Act, which sets non-binding targets aimed at bolstering domestic production of strategic raw materials by 2030. As the EU is significantly reliant on third country imports of these materials, these targets are particularly ambitious, not least in light of the EU's limited industrial policy remit. Changes to permitting processes, the creation of Strategic Projects based on sustainability criteria and stronger international cooperation are key factors likely to shape the extent to which the CRM Act will enable the EU to compete for these naturally finite but critical materials.