Europe fights for ‘local’ electric cars with a new raw materials law
The new European strategy is focused on reducing the EU’s dependence on external suppliers for the raw materials needed to manufacture electric vehicles.
The European Commission has set a goal for 10% of the EU’s demand for critical raw materials to be met from its own mining operations by 2030, which means the EU will try to produce more of these materials within its own borders.
Additionally, the strategy aims to have 40% of the processing of these raw materials done locally by 2030, which will create more jobs and economic activity within the EU.
Finally, the plan is to have 15% of the recycling of these materials also done within the EU by 2030, which will help reduce waste and environmental impacts. To achieve these goals, the EU has created a new law called the ‘Law on Critical Raw Materials’, which outlines specific steps and regulations to achieve these targets.
The European Union is working on a new law that aims to ensure that it has reliable and affordable access to the raw materials that are necessary to manufacture products in a way that is safe and sustainable. This law is still in the draft phase, but the idea is to secure the supply of “critical raw materials” that are essential to make products like electric vehicles.
This law is especially important because it will help ensure that there is a reliable and diversified supply chain for the components needed to make batteries for the electric vehicle market.
That is crucial because batteries are a vital component of electric vehicles, and their production requires several rare and valuable raw materials. By ensuring a secure supply of these materials, the EU hopes to support the growth of the electric vehicle market and make it easier for manufacturers to produce affordable and sustainable electric vehicles.
The European Union wants to reduce its dependence on China for important materials used to make products like electric cars, smartphones, and renewable energy technology.
These materials are called “critical raw materials,” and they include things like lithium, cobalt, and rare earth elements.
To do this, the EU is asking its member countries to increase their local production of these materials and to recycle them more often. That means they should mine and process more of these materials within the EU rather than importing them from other countries.
The EU is also setting a goal that member countries should not get more than 65% of their critical raw materials from a single country. That is to avoid relying too heavily on any one country, such as China, for these important materials.
The EU’s goal is to reduce its dependence on China and other countries for critical raw materials, which will make its economy more resilient and sustainable in the long run.
Critical raw materials
In today’s world, we rely more on digital devices, renewable energy, and transportation that don’t rely on fossil fuels. To make these things possible, we need certain materials that are becoming increasingly important. These materials are called “critical raw materials” and include things like lithium, cobalt, and neodymium.
We need these materials to make things like batteries for electric cars and renewable energy storage systems and for manufacturing smartphones and other digital devices. Because the demand for these products is growing, the demand for these materials is growing.
These materials are critical because they are not easy to find and extract and are located in just a few countries. That means that if the supply of these materials is disrupted for any reason, it could have a big impact on the global economy and the development of new technologies.
Thierry Breton, who is in charge of the market within the European Union, has compared “critical raw materials” to “oil and gas”. That is because these materials are becoming increasingly important for many different technologies, and products that are essential to our lives.
For example, critical raw materials are used to make solar panels, electric cars, and chips for computers and smartphones. They are also used to make pharmaceuticals and ammunition.
As the demand for these products grows, so does the demand for critical raw materials. That has led to global competition to find and extract these materials, which are often scarce and difficult to obtain.
Breton’s point is that just as oil and gas were the basis of the old economy, critical raw materials are the basis of the new economy. They are essential for the development of new technologies and products that are important for our future, and so countries and companies need to secure a reliable supply of these materials.
Reduction of ‘bureaucratic’ times
To achieve the goals of reducing dependence on other countries for critical raw materials and increasing local production, the EU Commission has proposed a package of measures.
One of the proposals is to consider strategic raw material projects to be in the public interest. That means that the approval process for mining projects is important for producing critical raw materials and will be shortened from the current 10-15 years to 24 months. That will make it easier and faster for companies to get approval to start mining these materials within the EU.
Projects in the processing and recycling sector, which involves turning raw materials into useful products, will be given priority and must receive an approval within 12 months. That is to encourage more companies to start processing and recycling these materials within the EU and help to reduce these materials from other countries.
The EU Commission is proposing measures to streamline the approval process for strategic mining projects and to prioritize projects in the processing and recycling sector. These measures increase local production of critical raw materials and reduce the EU’s dependence on other countries for these important materials.
The EU Commission has presented a general package of measures aimed at increasing local production of critical raw materials and reducing the EU’s dependence on other countries for these materials. However, the Commission has not yet provided specific details on how will be implemented.
One of the proposed measures is the creation of an updated list of critical raw materials. This list will include the most strategic materials that are considered at risk of potential supply disruptions in the future. That will help to identify which materials the EU should focus on producing locally and which materials may need to be imported.
By creating this list, the EU can prioritize the production of these materials and make strategic decisions about investments in mining, processing, and recycling infrastructure. That will help to ensure that the EU has a reliable and sustainable supply of critical raw materials for its transition to a more sustainable and digital economy.
The EU Commission has presented a general package of measures to increase local production of critical raw materials, it will need to provide more details on the implementation of these measures in the future.
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A commitment to research
The EU Commission has announced investments in research and innovation projects related to critical raw materials. These investments will focus on improving the safety and affordability of supplies of these materials, while also prioritizing environmental protection.
The Commission emphasizes the need to mitigate any adverse impacts related to the production and use of critical raw materials both within the EU and in other countries. That includes ensuring labor rights, human rights, and environmental protection are upheld throughout the entire supply chain of these materials.
The EU is committed to ensuring that the production and use of critical raw materials are sustainable and responsible, while also promoting innovation and technological advancements. By investing in research and innovation, the EU can develop new and more sustainable ways to produce and use critical raw materials, and minimize any negative impacts on the environment and society.
The EU Commission’s statement highlights the importance of balancing the need for critical raw materials with environmental and social responsibility. The investments in research and innovation will help to achieve this balance while also promoting the development of a more sustainable and resilient economy.
Member states should do the same by taking national measures to improve the collection of waste rich in critical raw materials and ensure its recycling into secondary raw materials.
Self-sufficiency but not entirely
The EU Commission’s proposed law on critical raw materials does not aim to completely exclude trade with third countries. Instead, the Commission acknowledges that the EU will continue to rely on imports for the majority of its consumption of critical raw materials, as it is unlikely to be fully self-sufficient in its production.
However, the proposed law does set some conditions for international trade in these materials. The Commission emphasizes the importance of supporting global production and ensuring supply diversification, the EU will need to work with other countries to ensure a reliable and sustainable supply of critical raw materials.
By setting conditions for international trade in these materials, such as ensuring that labor rights, human rights, and environmental protection are respected, the EU can help to promote responsible and sustainable production practices in other countries.
While the EU Commission recognizes the need for international trade in critical raw materials, it also emphasizes the importance of responsible and sustainable production practices, both within the EU and in other countries. By working with other countries to ensure a reliable and sustainable supply of these materials, the EU can support its transition to a more sustainable and digital economy.
To ensure a reliable and sustainable supply of critical raw materials, the EU Commission proposes strengthening its global partnerships with like-minded countries. The Commission acknowledges that the EU will need to continue to rely on imports of these materials, but it wants to work with countries that are committed to promoting sustainable production practices and developing value chains within their own countries.
To facilitate these partnerships, the Commission proposes the creation of a “critical raw materials club for all like-minded countries.” This club would bring together countries that are committed to sustainable production and trade practices for critical raw materials.
The Commission believes that working together with these countries can help to diversify investment, promote stability in international trade, and strengthen legal certainty for investors. The Commission’s Global Gateway strategy aims to help developing economies and emerging markets create value chains that support sustainable economic development.
The Commission recognizes the importance of global partnerships to ensure a reliable and sustainable supply of critical raw materials. By working with like-minded countries through initiatives such as the critical raw materials club, the EU can help to promote sustainable production practices and support the transition to a more sustainable and digital economy.
The proposed legislation on critical raw materials will now be debated by the European Parliament and the Council of the European Union. If passed, it will significantly improve the refining, processing, and recycling of critical raw materials within Europe, which are essential for the manufacture of key technologies for the transition to a more sustainable and digital economy, such as wind power generation, hydrogen storage, or batteries.
According to Commission President Ursula von der Leyen, the new law will help the EU reach its climate goals and strengthen worldwide cooperation with reliable trading partners to reduce the EU’s dependence on a few countries. She emphasizes that it is in the mutual interest of all countries to increase sustainable production and ensure the highest level of supply chain diversification for European companies.
The proposed legislation aims to promote the sustainable and responsible sourcing, refining, processing, and recycling of critical raw materials within the EU, and strengthen global partnerships to ensure a reliable and sustainable supply of these materials.
The Commission acknowledges that there are risks in the supply chain for critical raw materials, which can affect the EU’s economic resilience. The Covid-19 pandemic and the energy crisis that followed the invasion of Ukraine by Russia are examples of such risks.
Therefore, the Commission proposes measures to mitigate these risks and improve the EU’s economic resilience. It argues that failure to do so would threaten the EU’s climate objectives, as critical raw materials are essential for the production of technologies that contribute to the transition to a more sustainable economy.