Amendments to the Critical Raw Materials Act
The European Parliament adopted by 470 votes to 83, with 108 abstentions, amendments to the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2024/1252.
The matter was referred back to the committee responsible for interinstitutional negotiations.
The proposed amendments to the regulation aim to strengthen the EU's strategic autonomy by ensuring a sustainable and circular supply of essential raw materials.
The main amendments adopted in plenary are as follows:
Demand for project recognition
Applications for recognition of a project in the critical raw materials sector as a strategic project must be submitted to the Commission by the project promoter. The Commission must assess applications through an open call for proposals with regular deadlines. The first cut-off date is set for no later than 24 August 2024. The Commission should set cut-off dates at least twice a year.
Business risk preparedness
The Commission, in close cooperation with Member States, will identify the large companies operating in the EU that use strategic raw materials to manufacture strategic products (batteries, equipment related to hydrogen production and related to renewable energy generation, aircrafts, traction motors, heat pumps, mobile electronic devices, robotics, drones, radar, satellites or advanced chips). It may also, by delegated acts, expand this list of product categories according to the development of the geopolitical and economic situation.
The Commission will inform the large companies it has identified of such identification and of their obligations and should provide guidance regarding compliance with those obligations, including by providing relevant information to the Member States in which the company operates to facilitate compliance.
If significant vulnerabilities to supply disruptions are detected, large companies should take measures to mitigate those vulnerabilities, including by: (i) reducing the use of strategic raw materials, (ii) improving material and resource efficiency, (iii) diversifying its strategic raw materials supply chains, (iv) prioritising the use of secondary raw materials or replacing strategic raw materials where such replacement is technically and economically viable, or (v) building up or maintaining of stocks including, where appropriate, through the joint purchasing system.
If disclosure of some specific elements to the Commission would jeopardise essential security or defence interests of the Member State, it may withhold those specific elements of that information, by informing the Commission of its decision and stating the reasons.
Joint purchases
Suppliers of strategic raw materials will be excluded from the joint purchasing system if they are established or controlled by third countries holding more than 40% of global manufacturing capacity, unless they come from countries linked to the Union by a free trade agreement, a customs union or a strategic partnership.
In the event of a supply crisis, a sudden rise in prices or the setting of artificially low prices threatening the economic viability of extraction, processing or recycling projects established in the Union, the Commission may adopt temporary support measures, such as price stabilisation mechanisms, financial aid, production incentives or demand aggregation measures.
Recyclability of permanent magnets
Two years after the entry into force of an implementing act, natural or legal persons who place on the market, including by means of online sales or any other means of distance selling, certain categories of products (MRI devices, wind energy generators, electric motors, household appliances, drones, etc.) will have to affix a marking or a digital label indicating the required information on the integrated permanent magnets.
European Critical Raw Materials Centre
Members called for the creation of a European Centre for Critical Raw Materials in the form of a Union body with operational autonomy, dedicated funding, clear governance, expertise, and the resources necessary to carry out the tasks assigned to it by this Regulation. The Centre will assist the Commission in its operational tasks, in particular by providing financial and technical support for strategic projects, facilitating the pooling of demand and direct purchases of production, and ensuring enhanced market monitoring focused on security of supply.
More specifically, the Centre should carry out the following tasks:
- operate joint purchasing and, where relevant, common interest procurement mechanisms;
- establish and manage targeted strategic and contingency stockpiling mechanisms, and supporting private stockpiling where this contributes to Union resilience;
- identify material-specific supply chain vulnerabilities, strategic capability gaps and bottlenecks across critical raw materials supply chains;
- mobilise public and private financing, in particular in cooperation with the European Investment Bank Group, national promotional banks and institutions and other financial institutions of the Union, prioritising the development of Union extraction, processing, and recycling capacities;
- provide strategic intelligence, market monitoring, early warning indicators and risk analysis to the Commission, Member States, the Governing Board, the European Parliament and, where appropriate, to Union undertakings.
A Critical Raw Materials Forum should be established to facilitate dialogue, cooperation and the exchange of expertise among stakeholders concerned by critical raw materials and to support the implementation of this Regulation and the activities of the Centre.
European Fund for Critical Raw Materials (ECRM)
Members proposed establishing a European Fund for Critical Raw Materials (ECRM) as a financial instrument of the Union. The EFCM's objective will be to mobilise and finance strategically important projects and investments for the Union's critical raw materials supply chains. The ECRM will benefit from an initial contribution from the Union of EUR 2 billion, drawn from the amount referred to in Article 4(2) of the regulation establishing the European Competitiveness Fund, as provided for in the EU's long-term budget for the period 2028-2034.