The Critical Raw Materials Act: EU’s attempt to have quality and speed

Julia Poliscanova — July 24, 2023

Stuck project applications are a problem across Europe. The EU wants to solve this by getting governments to address capacity issues and by setting hard deadlines for permits.

Critical metals are top of the global agenda. Both the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) have recently published powerful reports. Metals including copper, nickel and lithium are at the heart of geopolitics, as investments into new mines, as well as concentration concerns, escalate.

Europe attempts to catch up with its European Critical Raw Materials Act (CRMA). While it lacks direct funding support, the law aims to ramp up projects across the supply chain using the “Strategic Project” label. The idea is to speed up permitting and get local administrations to act fast. 

Crucially, the IEA notes a lack of progress in cleaning up mining operations. So, as Europe scrambles to onshore metals supply, the question is can it do so without weakening its environmental and social safeguards?

It’s feasible 

In theory doing things right and fast when it comes to minerals is feasible. Practices and technologies to reduce the environmental impact and bring local communities on board are all available. But the consistent application of these globally is needed. 

Take the technology. Much innovation has happened on this front. Minerals can now be extracted fully underground to reduce on-land pollution (as Infinity Lithium is doing in Spain), their toxic tailings can be dried and stacked safely to avoid dangerous run-offs (though not yet a legal requirement in Europe), while new clean ways to extract lithium from geothermal brines should be operational in Europe after 2025. 

Similarly, practices to engage with communities effectively are readily available and just need to be applied. These include consulting people impacted by the operations early and throughout the project development, adjusting the plans based on their feedback, and simply knocking on people’s doors to talk to them (rather than sending PDFs).

What does the CRM Act require? 

Rightfully, the CRMA stipulates that EU environmental requirements around water, waste treatment and biodiversity protection cannot be foregone. Similarly, it requires strategic projects to ensure “meaningful engagement with local communities” and sets a minimum deadline of 90 days for public consultation (though some in the European Parliament want to cut it to 80). 

But what the law does is it gets the permitting process around those safeguards to move faster. 

Stuck project applications are a problem across European countries, curtailing everything from erecting wind turbines, installing an electric car charger to building battery and recycling factories. Often it’s due to a lack of expertise and personnel in local authorities.

The Commission wants to solve this by getting governments to address the capacity issues (including financial assistance) and by setting hard deadlines for permits. For extraction projects, once all documents are submitted, permits shall be granted within two years. For processing and recycling projects the deadline is a year. 

Strategic projects are also given an overriding public interest status. This means that if in court – provided all the social, environmental and community practices are adhered to – the project may go ahead despite the opposition. This makes sense as the goal is high standards, not a nod to nimbyism. 

What about global projects? 

Securing critical raw materials locally is only part of the story. While Europe has a lot of potential to recycle metals and should onshore mid-stream processing, much will continue to be sourced from resource-rich countries, such as Chile, Congo and Indonesia. 

European social and environmental rules, or permitting provisions, are not applicable in those countries. Instead, effective global standards coupled with strong due diligence and traceability rules are key here. 

This is where the Critical Raw Materials Act is less strong. 

First, the law does not actually set any global requirements. Instead, these are regulated separately under the EU Corporate Sustainability Due Diligence Directive (or CS3D for short) currently being finalised. CS3D should secure strong rules on environmental and social due diligence for the extractive sector, similar to what the just agreed EU Battery Regulation requires for cobalt, graphite, lithium and nickel in batteries. 

Second, the critical raw materials act allows companies to comply via their membership of “industry schemes”, or organisations such as the International Council on Mining and Metals and the Cobalt Initiative. The problem is that these are not created, or managed, equal. Some risk being mere rubber-stamping exercises lacking independence, while others – for example, the Initiative for Responsible Mining Assurance (IRMA) – do help raise the bar in global mining projects. 

IRMA’s strength is in its equal multi-stakeholder governance, as well as strong audits of mining sites themselves – not company policies – that are made public. Many western automakers have already joined the initiative, alongside heavyweights like Microsoft and Tiffany. 

So the CRMA should only accept global standards with multi-stakeholder governance, site-specific controls, and transparent and independent audits.

With critical metals top of the agenda, the Critical Raw Materials Act is Europe’s opportunity to not only onshore the supply, but do so responsibly and to high standards. As progress in cleaning up mining operations is slow, the European Parliament and governments agreeing the law in the coming months can change that.

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