Critical raw materials are essential for us to ensure the transformation of our society. Therefore, the EU Commission has proposed the Critical Raw Material Act, and in September 2023 the EU Parliament supported the proposal.

With this, it has been decided that 50 percent of the refining and processing of critical raw materials such as nickel, lithium, copper and rare earths must take place in the EU, and that 15 percent must be recycled.

In addition, the EU itself must extract 10 percent of the critical raw materials in 2030 and the EU must source a maximum of 65 percent of a specific raw material from another country. It must ensure diversification and thereby better security of supply within the EU.

In her State of the Union speech in 2022, EU Commissioner Ursula von der Leyen addressed the challenges the EU faces in terms of being able to secure the supply chain for, among other things, batteries and critical raw materials for use in the green transition. Critical raw materials are absolutely essential in realizing an energy transition with more wind turbines, solar cells and batteries.

In relation to the vast majority of these raw materials, the EU is today deeply dependent in particular on China, which today is responsible for the processing of almost 90 percent of the rare earth metals and around 60 percent of the processing of the world's lithium. If you look at the production of solar panels alone, it shows an analysis from the International Energy Agency, IEA, that China's material share in relation to all the main production stages of solar panels today exceeds 80 percent.  

According to the EU Commission, the demand for critical raw materials will increase by 500 percent in 2030, which is expected to lead to sharp price increases and increased supply risks in the coming years. The Commission has therefore presented a proposal – the so-called Critical Raw Materials Act – which aims to ensure stable supply chains, increase the EU's strategic autonomy and reduce the Union's dependence on imports of critical raw materials. At the same time, the aim is to create a legislative framework for all EU countries which can ensure that in the coming years the countries cooperate in the area, rather than national interests coming into play. 

The goal is also to secure and develop expertise in the field and to make production more sustainable. This also makes us less dependent on e.g. China and get greater assurance that we have the necessary resources for the green transition.

Along the way, it will be important to preserve the EU's environmental rules for water quality, waste sorting, biodiversity and the involvement of local communities, while it should become simpler and faster to get the permits in place for the extraction and processing of the necessary critical metals.

And, according to organizations, there is a lack of funding to develop the area and meet the goals. The national support schemes that exist are not enough to compete with China and the US. Therefore, a number of organizations have proposed that the EU's innovation fund be transformed into a green industrial bank that will invest in the best projects in the value chain for batteries.

The regulation must now be finalized with the EU member states.