Sustainable Sourcing for Strategic Industries: EU proposes Critical Raw Materials Act

The European Commission has recently proposed a set of actions to ensure the EU has access to a “secure, diversified, affordable and sustainable supply of critical raw materials” and, thus, meet the demands of its strategic sectors, including aerospace, defence, and the net-zero industry. The Critical Raw Materials Act will create secure and resilient supply chains for raw materials and reduce the administrative burden for critical raw material projects within the EU.

Key points of the proposed Critical Raw Materials Act include

• Setting benchmarks for domestic capacity and diversification of supply
• Developing national programmes for exploring geological resources
• Requiring certain large companies to audit their supply chains through company-level stress tests
• Investing in research, innovation and skills to promote breakthrough technologies in critical raw materials
• Establishing a Raw Materials Academy to promote skills relevant to critical raw material supply chains
• Mitigating environmental impacts, labour rights, human rights and regional stability issues
• Promoting economic development in third countries
• Seeking mutually beneficial partnerships with reliable trading partners to strengthen global supply chains

The regulations align with the EU’s green deal industrial plan and include provisions to establish circularity requirements for permanent magnets. As has been noted, less than 1% of rare earths consumed in the EU are currently recycled. At the same time, permanent magnets are found in a wide variety of products which are strategic for the energy and digital transition, such as wind turbines and electric vehicles. The Act aims to ensure the recyclability of permanent magnets by setting information requirements on theit type and composition.

As a next step, the proposed Regulation will be discussed and agreed upon by the European Parliament and the Council of the European Union before its adoption and entry into force.

Circular economy requirements for Permanent Magnets and PASSENGER’s role in advancing sustainable solutions

In conclusion, the Critical Raw Materials Act is an important step towards securing the supply of critical raw materials in Europe and promoting sustainable and responsible sourcing practices. Implementing this Act can greatly benefit initiatives such as the PASSENGER project, which aims to produce permanent magnets for electromobility without using rare-earth materials – a crucial step towards a sustainable and resource-efficient European economy. By substituting rare-earth permanent magnets with PASSENGER’s magnets in e-scooters, e-bikes, and e-motorbikes, the project is piloting a new approach to electromobility that can increase the availability of sustainable transportation devices while promoting sustainable sourcing of raw materials and responsible manufacturing practices in the EU.

Read more: European Critical Raw Marerials Act (EU press corner)

Critical Raw Materials Act – video animation – © European Union, 2023