A critically raw situation - Part 2

EU tries for economic suicide by energy transition

• Local supply of transition materials is high-cost and high-risk

• The pool of external suppliers is minuscule to date

• The many challenges of securing materials strengthen EC’s centralisation ambitions

“The EU will never be self-sufficient in supplying such raw materials and will continue to rely on imports for a majority of its consumption.”

The above may sound like a statement made by an EU sceptic pointing out the obvious but in fact it comes from the official press release for the Critical Raw Materials Act — the little sibling of the Net Zero Industry Act that was officially presented last week.

Like the NZIA, the CRMA appears to be, if you’ll excuse the reference, the engine of the energy transition in Europe and, also like the NZIA, that second piece of legislation spells out an ambition for the EU to become more self-sufficient in raw materials it needs.

Acknowledging that complete self-sufficiency or even reasonably high partial self-sufficiency is in the field of dreams and will remain there forever might seem like a good start; like cause for optimism. Alas, it is little more than an acknowledgment of hard realities that even the EU cannot deny, which are then drowned in more of what we saw in the NZIA.

The CRMA, for instance, sets out “clear benchmarks for domestic capacities" along the transition supply chain with a view to those 2030 targets set out in the NZIA. These benchmarks include, as follows:

• At least 10% of the EU's annual consumption for extraction,

• At least 40% of the EU's annual consumption for processing,

• At least 15% of the EU's annual consumption for recycling, 

• Not more than 65% of the Union's annual consumption of each strategic raw material at any relevant stage of processing from a single third country.

To make this possible, the EU promises to shorten the approval period for new mines and processing facilities considerably and simplify it, too. New mines, for instance, will be approved in 24 months while new processing and recycling capacity will get an approval within a year.

This is, of course, based on the companies applying for these approvals having lined up the money they would need to put their new permits to good use. But more on that later. Let’s first look at the Commission’s co-ordination push because co-ordination appears to be the new word for centralisation in Brussels.