7 December, 2023
The European Council has approved the Critical Raw Materials Act (CRMA) with the aim of ensuring a stable supply of essential raw materials for the EU’s strategic technology sectors.
The CRMA contains a set of measures designed to encourage domestic exploration and recycling capacities, as well as advance international partnerships in an effort to build a diversified and resilient supply chain for critical industries, including climate tech, aerospace and defence. Integral to the Act are ESG considerations, strategically addressing environmental, social, and governance risks in mineral extraction while fostering responsible production and sourcing practices.
The final agreement among EU institutions was reached on March 19 2024, leading to the implementation of various aspects of CRMA over the next few years:
Key Components of the CRMA
The CRMA comprises two main components: a Communication, where the EU Commission outlines the objectives, motivation, and content of the proposal (non-legally binding), and a legally binding Regulation throughout the EU without requiring additional national legislation.
In addition to an updated list of Critical Raw Materials exposed to serious supply chain risks and essential to the EU economy, the Act identifies 16 Strategic Raw Materials due to their relevance for the green and digital transition as well as health, defence and space applications including microchips and batteries. The Regulation embeds both the Critical and Strategic Raw Materials lists into EU law, and the list is reviewed and updated at least every 3 years.
The Regulation contains goals and expectations for the EU Member States and lays down a framework to facilitate the accomplishment of these goals. Notably, the Regulation sets the following targets for the EU’s domestic extraction, processing, and recycling capacities for 2030:
The provisions also covers strategic projects, national obligations of resource exploration, company risk preparedness and stress testing, strategic stocks and joint purchasing, strategic partnerships, and recognition of sustainability schemes.
Moreover, it outlines concrete mandatory rules for companies involved in Critical Raw Material supply chains on topics such as Critical Raw Material recovery and recycling, product labelling for permanent magnets, and environmental footprint declaration.
The adoption of CRMA is poised to reshape the current paradigm of Critical Raw Materials production in the EU by providing companies with a more agile process for accessing mining permits and financing. Proactive adaptation to the evolving regulatory landscape will be essential for companies to navigate challenges and leverage opportunities under CRMA.
How can RCS Global Group help?
As the proven leader in responsible sourcing of raw materials, RCS Global Group has been advising industry leaders from the automotive, battery manufacturing, energy and mining industries to align their due diligence management systems and targets to meet or exceed the expectations of the several regulations and standards through various activities and services.
RCS is regularly engaging with key stakeholders to anticipate the impacts of the CRMA on companies and the market, via:
Expert interpretation of the CRMA and the provision of reports assessing the evolving regulatory landscape to assist your company navigate the challenges and leverage opportunities under the Act
Gap analysis of company policy, processes and systems against CRMA requirements
Staff and supplier training on ESG risk management
Responsible sourcing strategy, assessment and risk mitigation strategy
Mapping and auditing of Critical Raw Material supply chains to identify and trace relevant data
Support to meet the CRMA disclosure and reporting requirements
Interested in understanding more about CRMA and its impact on your business? Get access to our comprehensive commentary on CRMA, written by our expert responsible sourcing advisory team.
