EC launches new critical raw materials analysis
The European Commission (EC) has announced that there are now 20 raw materials that are critical to the EU economy, up from 14 in 2010.
Launched as part of the EU Raw Materials Initiative (first set up in 2008), the ‘Report on Critical Raw Materials for the EU’ identifies materials that have a‘high economic importance to the EU combined with a high risk associated with their supply’ (i.e. production is concentrated to just a few countries, and/or the materials have little substitutability and low recycling rates).
It updates a similar report from 2010 and aims to ‘incentivise the European production of critical raw materials and facilitate the launching of new mining and recycling activities’.
Led by environmental consultancy Oakdene Hollins in partnership with Fraunhofer ISI and Roskill Information Services, the analysis shows that 13 of the 14 critical raw materials listed in the 2010 version of the analysis are still classed as ‘critical’ (antimony, beryllium, cobalt, fluorspar, gallium, germanium, indium, magnesium, natural graphite, niobium, platinum group metals, rare earths and tungsten), while tantalum was moved off the list due to a lower supply risk.
Six new materials appear on the list: borates, chromium, coking coal, magnesite, phosphate rock and silicon metal, and rare earth minerals are now split into two separate categories: light and heavy rare earths.
It is hoped the list will be used by the EC to help ‘prioritise needs and actions’, such as challenging trade distortion measures.
To assess the criticality of the 54 chosen raw materials, Oakdene Hollins looked at both the economic importance and supply risk of the material. To do this, the consultancy assessed the proportion of each material associated with industrial megasectors at an EU level and then combined this with the megasectors’ gross value added (GVA) to the EU’s gross domestic product (GDP). This total was then scaled according to the total EU GDP to define an overall economic importance for a material. To measure the supply risk of raw materials, the World Governance Indicator (WGI) was used. This indicator takes a variety of influences into account such as political stability, government effectiveness, regulatory quality, or control of corruption.
The analysis found that of the 54 candidate materials identified, around 90 per cent of global supply originated from extra-EU sources, with China being the major supplier of the materials such as precious metals and rubber. Several other countries were found to have dominant supplies of specific raw materials, such as the USA (for beryllium) and Brazil (for niobium). Supporting reports detailing the profile of each critical raw material and the non-critical materials have been released alongside the new list.
EU primary supply across all candidate materials was estimated at around nine per cent, but in the case of the critical raw materials, supply from the EU sources was even more limited.
However, despite the analysis showing that less than half of the selected materials were found to be ‘critical’, it highlights that all raw materials, even when not critical, are important for the European economy and thus policy actions ‘should not be limited to critical raw materials exclusively’.
It reads: ‘The purpose of the list is to contribute to the implementation of the EU industrial policy and to ensure that European industrial competitiveness is strengthened through actions in other policy areas. This should increase the overall competitiveness of the EU economy, in line with the Commission’s aspiration of raising industry’s contribution to GDP to as much as 20 per cent by 2020. It should also help to incentivise the European production of critical raw materials and facilitate the launching of new mining activities.’
‘Ensuring that European industrial competitiveness is strengthened’
Speaking to Resource, Oakdene Hollins’s Senior Economist, Peter Willis, commented: “We are delighted to have worked together with the European Commission in preparing this report.
“The previous edition of the critical raw materials list became very high-profile and was widely used in policymaking discussions including minerals policy, product recycling, international trade and industrial competitiveness. This latest report will help to inform manufacturing and retail companies of the risks in their own supply chains and waste management companies on the value of specific raw materials in products that are commonly discarded and not currently recovered.”
European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship, added: "The commission, in cooperation with member states and stakeholders, is taking a wide range of measures to implement this strategy. These include a reinforced raw materials diplomacy and trade policy, fostering sustainable supply within the EU and boosting resource efficiency and promoting recycling. The EU list we presented today aims at contributing to the implementation of the EU industrial policy and to ensure that European industrial competitiveness is strengthened."
It is expected that a number of key ‘raw materials commitments’ will be presented at the European Innovation Partnership conference in Italy later this year.
Read the ‘Report on Critical Raw Materials for the EU’.