Critical Raw Materials Act

Introduction

The Regulation (EU) 2024/1252, known as the Critical Raw Materials (CRM) Act, establishes a comprehensive framework to ensure the EU's access to a secure and sustainable supply of critical and strategic raw materials. It is a cornerstone of the EU Green Deal Industrial Plan, designed to bolster the EU's strategic autonomy and resilience in sectors vital for the green and digital transitions, as well as for the defence and aerospace industries. The Act addresses the EU's heavy reliance on imports from a few third countries, which exposes its economy to supply chain risks.

The regulation introduces measures across the entire value chain, from extraction and processing to recycling and diversification of imports. It aims to improve the functioning of the internal market by preventing supply disruptions and ensuring the free movement of these essential materials.

Main Goal

The primary objective of the CRM Act is to create a secure, resilient, and sustainable supply of critical raw materials for the European Union. To achieve this, it sets out to:

• Strengthen the EU's internal capacities by setting clear benchmarks for domestic extraction, processing, and recycling to be achieved by 2030.
• Diversify the EU's import sources to reduce dependency on single countries.
• Improve the EU's ability to monitor and mitigate supply risks through systematic monitoring, stress testing, and coordination of strategic stocks.
• Enhance circularity and sustainability by promoting recycling, resource efficiency, and establishing sustainability standards for raw materials.
• Streamline and accelerate permitting processes for strategic projects within the EU to attract investment.

Who It Applies To

The CRM Act applies to a range of actors across the value chain:

• EU Member States: Obligated to establish single points of contact for permitting, develop national exploration programs, and implement measures to enhance circularity.
• Project Promoters: Undertakings or consortia developing raw material projects, particularly those seeking the 'Strategic Project' status, which grants access to streamlined permitting and support.
• Large Companies: Companies with over 500 employees and a net worldwide turnover exceeding €150 million that use strategic raw materials in key technologies (e.g., batteries, renewable energy equipment, electronics, traction motors) are required to perform supply chain risk assessments.
• Manufacturers and Importers: Any natural or legal person placing specific products containing permanent magnets on the EU market.
• Economic Operators: Entities placing certain critical raw materials on the market may be required to provide an environmental footprint declaration.

Key Dates

The regulation has a phased implementation timeline:

• 23 May 2024: The Regulation enters into force and becomes directly applicable.
• 24 February 2025: Deadline for Member States to designate 'single points of contact' for permit-granting processes.
• 24 May 2025: Deadline for Member States to draw up national exploration programmes and identify large companies subject to risk assessment obligations.
• 24 November 2025: Deadline for Member States to establish rules on penalties for infringements.
• 24 May 2026: First annual report from Member States to the Commission is due.
• 24 May 2027: The Commission will review and potentially update the lists of strategic and critical raw materials.
• 24 November 2027: Requirements for labelling and data carriers on products with permanent magnets become applicable (two years after the implementing act on the label format is adopted).
• 2030: Target year for the EU to reach its domestic capacity and import diversification benchmarks.
• 31 December 2031: Deadline for the Commission to potentially set minimum recycled content shares for permanent magnets.

Exemptions

• Products primarily designed for defence or space applications are exempt from the requirements on recyclability and recycled content of permanent magnets.
• Certain special purpose vehicles and vehicles produced in small series are also exempt from these requirements.

Key Provisions

• Lists of Materials: The Act establishes two lists: a list of 34 Critical Raw Materials (high supply risk and economic importance) and a subset of 17 Strategic Raw Materials (crucial for strategic technologies, with potential for increased production).
• 2030 Benchmarks: The EU aims to achieve the following capacities by 2030:
  • Extraction: At least 10% of the EU's annual consumption.
  • Processing: At least 40% of the EU's annual consumption.
  • Recycling: At least 25% of the EU's annual consumption.
  • Import Diversification: No more than 65% of the Union's annual consumption of any strategic raw material should come from a single third country.
• Strategic Projects: A new category for projects that significantly contribute to the EU's supply security. These projects benefit from priority status, streamlined and faster permitting processes (e.g., max 27 months for extraction projects, 15 months for processing/recycling), and support in accessing finance.
• Risk Monitoring and Mitigation: The Commission will monitor supply risks, conduct stress tests for strategic raw material supply chains, and coordinate information on Member States' strategic stocks.
• Circularity and Sustainability: The Act introduces measures to boost the circular economy, including:
  • Information requirements on the recyclability and recycled content of permanent magnets in products like MRI devices, wind turbines, vehicles, and various electronics.
  • A framework for recognised certification schemes to ensure raw materials are sourced and processed sustainably.
  • The potential for mandatory environmental footprint declarations for certain critical raw materials.
• Governance: Establishes the European Critical Raw Materials Board, composed of Member State representatives and the Commission, to advise on and oversee the implementation of the Act.

Obligations & Requirements

• Member States: Must create national exploration programs, streamline permitting via single points of contact, promote circularity, and report on progress to the Commission.
• Large Companies (in scope): Must conduct a risk assessment of their strategic raw material supply chains at least every three years, mapping dependencies and assessing vulnerabilities.
• Manufacturers of products with permanent magnets: Must ensure products are labelled, provide information via a data carrier on the magnet's composition and location for easier recycling, and declare the share of recycled content.
• Operators of extractive waste facilities: Must conduct a preliminary economic assessment of the potential to recover critical raw materials from their waste.

Affected Products and Actors

• Actors: Mining companies, raw material processors, recyclers, manufacturers, importers, large industrial consumers of raw materials, EU Member States.
• Products: The regulation specifically targets products containing permanent magnets, including:
  • Magnetic resonance imaging (MRI) devices
  • Wind energy generators
  • Industrial robots
  • Motor vehicles and light means of transport (e.g., e-bikes, e-scooters)
  • Cooling generators, heat pumps, and electric motors
  • Household appliances (washing machines, tumble driers, microwaves, vacuum cleaners, dishwashers)

Penalties

Member States are required to establish rules on penalties for infringements of the Regulation by 24 November 2025. These penalties must be effective, proportionate, and dissuasive.