Unearthing opportunities with the EU’s Critical Raw Materials Act

The European Critical Raw Materials Act (CRM Act), in force since May 2024, forms part of the EU’s Green Deal Industrial Plan. The Act establishes a framework to create a secure and sustainable supply of critical raw materials (CRMs) to the EU, to meet its 2030 climate and digital transformation objectives.

CRMs are of strategic economic importance for Europe as essential components of transformative technologies in renewable energy, aerospace, defence and other industries. As these industries grow, so does the need for CRMs. Demand for rare earth metals is expected to increase seven-fold by 2050, while demand for lithium is expected to increase 21-fold by 2050.

But these materials are highly vulnerable to supply disruptions. Currently the EU relies heavily on imports, often from a singular country outside the union. Recent geopolitical crises have exposed these strategic dependencies.

Overview of the European Critical Raw Materials Act

The European Critical Raw Materials Act is a comprehensive response to these challenges. Building on the strength of the single market, the Act aims to:

• strengthen all stages of the European critical raw materials value chain
• diversify the EU’s imports to reduce strategic dependencies
• improve EU capacity to monitor and mitigate risks of supply chain disruptions
• improve circularity and sustainability.

The EU’s Green Deal Industrial Plan also includes a Net Zero Industry Act aimed at scaling up the manufacturing of key carbon-neutral technologies for clean energy supply chains.

Under the Act, the European Commission has recently approved its first 47 strategic projects in the EU. These projects include extraction, processing, recycling and substitution. The list of approved projects can be found below. Additional information on upcoming application processes can be found here.

EU and Australia’s partnership on sustainable critical and strategic minerals

In May 2024, the EU signed a Memorandum of Understanding (MoU) with Australia to cooperate on sustainable critical and strategic minerals.

The partnership enables the EU to diversify its supplies of materials necessary for the green and digital transformation, while contributing to the development of Australia's domestic critical minerals sector.

The MoU provides a framework to build secure and sustainable critical and strategic minerals value chains between the EU and Australia, from research and networking to joint ventures and the facilitation of trade and investment. These value chains will support the clean energy and digital transformation and are relevant for other key industrial sectors such as defence and aerospace.

The partnership will also explore cooperation in countries where the EU and Australia have mutual interests, focusing on reducing environmental impact and benefiting local communities. Additionally, it promotes innovative and digital technologies and services for mining, and other projects along the critical minerals value chain.

As part of the agreement, Australia and the EU will work together to promote high environmental, social and governance (ESG) standards. The high ESG standards of Australian products make them ideal to supply the EU market. The new partnership will also encourage collaboration on ESG matters to help recognise these market opportunities and promote sustainable and secure production of critical minerals.

Australian METS companies will find opportunities in the EU.

Opportunities for Australian METS companies

The EU Critical Raw Materials Act and the MoU create opportunities for Australian METS companies.

The EU is committed to strengthening all stages of the European critical raw materials value chain, as well as improving circularity and sustainability.  This provides opportunities across the entire mine lifecycle, including areas such as digitising and automating mining operations, increasing processing efficiency, and mine rehabilitation.

The EU has a list of 34 CRMs. In May 2024, the European Commission opened applications for strategic projects under the Critical Raw Materials Act. The Commission has approved the first 47 strategic projects in the EU and first 13 projects outside of the EU. These projects include extraction, processing, recycling and substitution. Additional information on upcoming application processes can be found here.

Under the Act, critical raw materials project owners (including strategic projects) can engage with a single point of contact in each EU country who is responsible for coordinating the permitting process. In addition, selected strategic projects will benefit from access to finance and shorter permitting timeframes (27 months for extraction permits and 15 months for processing and recycling permits). EU countries will also develop national programs for the exploration of geological resources.

How Austrade can help

Austrade offices in Europe are actively supporting Australian METS companies interested in participating in Europe's mining sector, including upcoming CRM opportunities. For more information, contact Austrade’s METS team.