Raw Materials

Speech pronounced at the occasion of the EIT Raw Materials Summit on the 17th of June, 2021.

I am honoured to be with you here today to kick-start the Session on the EIT Raw Materials Summit.

 

Much has changed since the Covid-19 pandemic hit the European economy.

The need to increase EU resilience and to make the twin digital and green transitions a reality is more relevant than ever in the current geopolitical and economic climate.

With the crisis, it has also become clear that we need to reduce our dependencies and vulnerabilities. Access to resources is a strategic security question for Europe’s ambition to deliver the Green Deal and our digital ambitions.

Last month, we presented an update of the 2020 Industrial Strategy, including an analysis of the EU’s strategic dependencies. Our assessment shows that for the energy intensive industries ecosystem, the EU is highly dependent on third countries for no less than 99 products. Such dependencies may present a risk for Europe’s supply chain security.

It will not be a surprise to you that most of these products relate to raw materials.

Already keenly aware of the need to ensure a sufficient supply of sustainable raw materials and reduce our economic and geopolitical dependencies in the area of critical raw materials, the Commission adopted the EU Action Plan on Critical Raw Materials last September. It contains 10 actions to build resilience of critical raw materials supply chains for EU industrial ecosystems.

In the EU action plan, we call on Member States and regions to identify critical raw material mining, processing and waste valorisation projects that can be operational by 2025. This includes critical raw materials, rare earths, battery anode materials like natural graphite as well as cathode materials such as lithium.

 

As our very first action, we set up the European Raw Materials Alliance, ERMA, to deal with the rare earths magnets and motors value chain as a priority.

Rare earth elements are essential to produce permanent magnets used in key industrial ecosystems such as renewable energy, e-mobility, space and defence.

95% of electric vehicles use permanent magnets, and the sale of electric vehicles is soaring. Wind turbines contain on average 600 kg permanent magnets per megawatt.

The EU relies 98% on one single country for the supply of rare earth elements, refining of rare earths and recycling of magnets: China.

It is not an enviable position to be in, but we are not alone: the US, Japan, the UK, Canada, Australia, India and others are rushing to address this vulnerability as well.

I believe we are in a similar situation with rare earths and permanent magnets as we were a few years ago with batteries and lithium.

• Total dependence on China,

• Very limited EU production,

• No European regulation to encourage ethical sourcing of rare earths, create demand for recycled materials or give a competitive advantage to European manufacturers through carbon footprint requirements,

• And downstream industries which benefit from the current situation in terms of cost / benefit ratio.

To address this situation we need to work together on several fronts:

To begin with, ERMA’s first task is indeed a very urgent and highly important one. The investment pipeline that ERMA has prepared will contribute to solving the problem. If these projects were realised, 20% of Europe’s rare earth needs could be sourced from the EU. Up from close to zero today.

What is needed now is to find the financing (both public and private).

The national recovery plans could provide funding in this respect, and I also consider Important Projects of Common European Interest, IPCEIs, an key tool Member States should look at as it could de-risk investment and mobilise private actors, as has already been done successfully, and twice, in the area of batteries.

Secondly, I will also launch a dialogue with downstream market players. I have already spoken with rare earth and magnet producers, so I know that it is feasible for the EU to diversify throughout the whole supply chain, from rare earths to magnet recycling. Now it is time to speak with the downstream manufacturers in the automotive, wind energy, defence and digital sectors using these magnets about what their concerns are and how they can contribute to resilient EU value chains.

 

Thirdly, as announced in the EU Action Plan, we have also been developing a number of partnerships with resource-rich countries, to secure a diversified supply of sustainably mined critical raw materials away from a single source – which often is China. These partnership focus on the integration of raw material value chains between the EU and third countries, cooperation in the area of research and innovation and social and environmental criteria.

Only two days ago, we endorsed the Raw Materials partnership with Canada at the EU-Canada summit.

We are working to start partnerships with some African countries as well. We count on the EIT community and ERMA to implement these partnerships on the ground. Vice-President Šefčovič will inform you on the state of play with Ukraine and Serbia.

Despite all these efforts, our growing demand for critical raw materials cannot be met without considering domestic sourcing.

 

Domestic sourcing, as well as boosting circularity and recycling and increasing the use of secondary raw materials, are key parts of the puzzle.

Hence the question is not whether we should mine in the EU but under what conditions? 

I believe that the reasons to explore sustainable mining in the EU are not only of economic and geopolitical nature. We also have a moral obligation.

If we do not have an open debate about sustainable mining in Europe, without taboos, we will continue in a situation where we import raw materials from mines far away from our homes and conveniently close our eyes on how they were sourced.

It is high time that we are honest and take more responsibility ourselves. We need to work together and develop a European approach with high environmental and social standards which is backed by stakeholders. .

 

Let me finish by warmly thanking EIT RawMaterials for the great work that they are doing on the rare earth magnets and motors value chain, and on energy storage and conversion.