By Bernard Dahdah, Senior commodities analyst and Sylvain Eckert, Head of metals and mining.
The European Critical Raw Materials Act (CRMA) is a large step forward towards securing critical raw materials (CRM). CRMs are paramount for the green and digital transition along with defence and aerospace needs. To achieve the objectives of securing a sustainable of supply of minerals, the regulation has established three main targets to be reached by 2030. Are these goals realistic?
Listen to Natixis CIB’s experts’ insights in a webinar and a full report. By Bernard Dahdah, Senior commodities analyst and Sylvain Eckert, Head of metals and mining, Energy Transition & Natural Resources.
The European Critical Raw Materials Act comes after the US’s Inflation Reduction Act (IRA) which Europe viewed with concern. Most importantly, the CRMA comes within the context of the Russian war on Ukraine and the end of Russian gas flows to Europe. The Act also comes in the aftermath of the Covid-19 lockdowns which caused major disruption in the global supply chain and laid bare Europe (and the world’s) dependency on Chinese manufacturing and goods.
3 main targets by 2030
First, the regulation aims to achieve 10% of its Strategic Raw Materials (SRM) consumption through domestic mining by 2030. While it is realistic that this could be reached for manganese and natural graphite, the chances are weak for boron and it is unlikely that the target will be achieved for rare earth elements and titanium. Although there are some European rare earth deposits that could be developed, the time frame (7 years) is just too short and the skillset will take time to develop.
Regarding the 15% target of SRMs consumption through recycling by 2030, although there is some low hanging fruit that is easy to recycle, such as titanium and platinium group metals, it is unlikely that the target will be reached by 2030 for most other SRMs.
Finally, when it comes to the target of 40% of SRMs consumption being processed in Europe, it is unlikely that the target for rare earth elements will be reached.
Although the target is unlikely to be met in all the sectors, strategic partnerships with reliable and historic allies will help fill the gap.
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