EU Establishes Critical Raw Materials Committee... Responding to US IRA and Reducing Dependence on China

Draft of Core Raw Materials Act (CRMA) to Be Released on the 14th

The European Union (EU) is establishing a new agency called the 'European Critical Raw Materials Board' (tentative name) to secure raw materials such as critical minerals. This move aims to respond to the U.S. Inflation Reduction Act (IRA) promoting green industries and to reduce dependence on China for minerals.

[Image source=Reuters Yonhap News]

According to major foreign media on the 7th (local time), the EU Commission plans to unveil a draft of the Critical Raw Materials Act (CRMA) containing these details on the 14th.

The European Critical Raw Materials Board aims to produce at least 10% of raw materials within the region and process at least 40% of the necessary strategic materials domestically. The EU Commission explained, "A system must be established to aggregate the demand of EU buyers and negotiate with global suppliers on their behalf."

With the rapid increase in demand for key minerals due to the expansion of markets such as electric vehicles, the plan is to establish an EU-level response agency to enhance price negotiation power and minimize conflicts among member states.

Additionally, the draft includes measures to simplify permits for new projects such as critical raw material processing plants and to ease complex approval procedures, including subsidy regulations for new projects. It also envisions requiring critical raw material sellers to disclose their carbon footprint, representing total greenhouse gas emissions.

Earlier, Ursula von der Leyen, President of the EU Commission, officially announced the CRMA initiative in her annual policy speech last September, forecasting that demand for key mineral raw materials will increase by up to 500% by 2030. The goal is to secure supply chains for essential raw materials such as lithium and rare earths, which are vital for clean technology industries, and to reduce mineral dependence on China.

It is also interpreted that the EU considered the acceleration of competition for raw material procurement as the U.S. implements the IRA and actively promotes green industries.