The European Commission has adopted, for the first time, a list of 47 Strategic Projects to boost domestic strategic raw material capacities, which will in turn strengthen the European raw materials value chain and diversify sources of supply
The new Strategic Projects mark an important milestone in the implementation of the Critical Raw Material Act (CRMA), which aims to ensure European extraction, processing and recycling of strategic raw materials meet 10%, 40% and 25% of EU’s demand by 2030, respectively. By helping Europe meet these targets, the new Strategic Projects contribute significantly to Europe’s green and digital transitions, while supporting Europe’s defence industry and aerospace industries.
What are strategic raw materials and why the EU needs them?
The Critical Raw Materials Act, entered into force in May 2024, identified the first list of strategic raw materials. Those raw materials are considered strategic since their projected demand growth compared to current levels of supply, combined with the difficulties of scaling up production, are likely to create supply risks in the near future. These raw materials are used in strategic sectors such as renewable energy, digital, aerospace and defence technologies. Lithium, cobalt, nickel, manganese and graphite are for instance used to manufacture batteries for e-mobility or energy storage, while rare earth elements are present in the motors of electric vehicles or wind turbines. The Critical Raw Materials Act includes also a list of critical raw materials, which are materials considered important for the whole European economy and that face a high risk of supply disruption.
Currently, critical and strategic raw materials are mainly extracted, processed and recycled in third countries, creating dependencies that can be exploited against European interests. To secure access to those raw materials in the EU, the Critical Raw Material Act sets a framework to support Strategic Projects linked to extraction, processing, recycling of strategic raw materials. The Strategic Projects will develop EU capacity along the value chain and contribute to deliver on the 2030 benchmarks identified in the Act:
• At least 10% of the EU’s annual consumption for extraction
• At least 40% of the EU’s annual consumption for processing
• At least 25% of the EU’s annual consumption for recycling
• No more than 65% of the Union’s annual consumption of each strategic raw material relies on a single third country supplier for any relevant stage of the value chain.
What are the criteria to be selected as a Strategic Project?
To be selected as Strategic Projects under the Critical Raw Materials Act, projects must make a meaningful contribution to the security of the Union’s supply of strategic raw materials. They must be or have the potential to become technically feasible within a reasonable timeframe, show expected production volumes, and be implemented sustainably with a sufficient estimated level of confidence. The Strategic Projects must also demonstrate that they have cross-border benefits beyond the EU Member State concerned.
How were the Strategic Projects selected?
The Commission opened the first call for applications for Strategic Projects from 23 May 2024 to 22 August 2024.
Independent experts assessed the projects’ technical, financial, and sustainability-related aspects, verified their classification under the United Nations Framework Classification for Resources and verified whether they meet the Critical Raw Materials Act criteria.
Based on these expert assessments, the Commission prepared a preliminary list of selected projects, and consulted the Critical Raw Materials Board, composed of Member States with the European Parliament as an observer. The Board then issued an opinion accepting the list of Strategic Projects.
The application form, a guide for applicants and frequently asked questions are available here: Strategic projects under the CRMA – European Commission. The Commission will soon announce a new call for Strategic Project applications, currently planned for end of summer.
What are the strategic raw materials concerned by the selected projects?
The Strategic Projects will provide access to 14 out of the 17 strategic raw materials listed in Annex 1 of the Critical Raw Materials, namely: bauxite/alumina/aluminium; boron — metallurgy grade; cobalt; copper; gallium; germanium; lithium — battery grade; magnesium metal; manganese — battery grade; graphite — battery grade; nickel — battery grade; platinum group metals; rare earth elements for permanent magnets; tungsten.
Bismuth, Silicon metal and Titanium metal are not covered by Strategic Projects in this first list.
What is the benefit for projects that are selected as Strategic Projects?
The selected projects are considered strategic as they will strengthen Europe’s supply of strategic raw materials. Being selected as a Strategic Project means to benefit from streamlined permitting and from enabling conditions for access to finance.
Streamlined procedures do not imply lower standards on environmental assessment or reduced involvement of the public. Those aspects are decided by Member States and are not the object of the streamlined permitting procedure.
What are the benefits for Strategic Projects regarding permitting in the EU?
Strategic Projects will benefit from streamlined permitting, while still having to comply with all applicable environmental and social requirements under existing legislation. As Strategic Projects, they will be considered as projects of public interest and their permit-granting process should be limited to 27 months for extraction projects and 15 months for processing or recycling projects. This will increase predictability for projects promoters, enabling them to contribute to EU supply security.
Strategic Projects, as well as other critical raw materials projects, will be able to benefit from “Single Points of Contact” in their Member States, which will be their only interlocutors for the duration of the permit-granting process.
What are the benefits for Strategic Projects regarding financing?
The Strategic Projects will be presented and discussed within the financing sub-group of the Critical Raw Materials Board. The sub-group advises on how the financing of the project can be completed, considering private and public sources of funding. This sub-group brings together relevant national promotional banks, the European Investment Bank, the European Bank for Reconstruction and Development, and private financial institutions, among others. The sub-group will soon meet to discuss how each Strategic Project can be financially supported.
A Strategic Project can also benefit from the possibility of regional and national authorities making use of funding from the European Development Fund and Cohesion Fund to support the project, in line with the new STEP Regulation. These funds are administered by regional and national authorities and the Commission ensures that supported projects are successfully concluded.
What are the obligations of Strategic Projects?
Besides meeting the relevant criteria, Strategic Projects promoters must report to the Commission on the progress made in the implementation of the project and any potential delay. The promoters must also notify changes to the project that impact the fulfilment of the criteria, as well as any relevant changes in the control of companies involved in the project. To ensure transparency, the Strategic Projects must also make available a regularly updated website with information relevant to the local population, notably on the projects’ impacts and benefits. Strategic Projects remain subject to environmental assessments and public consultations requirements. They must also meet public acceptance obligations and demonstrate their engagement with the local population.
Are Strategic Projects necessarily located in EU Member States?
Granting a Strategic Project status is also possible for projects located outside the EU territory, if they comply with the criteria set in article 6 of the CRMA (see Q2). The Commission received 46 applications for projects located in third countries. The Decision on the potential selection of such projects will be adopted at a later stage.
Above, Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy / image credited to the EC
