EU Parliament votes in favor of Critical Raw Materials Act

EU Parliament votes in favor of Critical Raw Materials Act

Subject: IR

Section: International relations

Context:

• The Critical Raw Materials Act was voted on in the European Parliament during the September 11-14, 2023, plenary session in Strasbourg, France. It was approved with a large majority of 515 Members of the European Parliament (MEP) backing it.

Critical Materials Act:

• The regulation aims to “diversify the Union’s imports of strategic raw materials with a view to ensure that, by 2030, the Union’s annual consumption of each strategic raw material at any relevant stage of processing can rely on imports from several third countries, none of which provide more than 65 per cent of the Union’s annual consumption”.
• By 2030, the Union extraction capacity should be such that the ores, minerals, or concentrates needed to produce at least 10 percent of its annual consumption of strategic raw materials can be extracted.
• The EU aims to increase its processing capacity along the value chain and be able to produce at least 40 percent of its annual consumption of strategic raw materials. The aim is to manufacture at least 50 per cent annual consumption of strategic raw materials.
• Collecting, sorting, and processing 45 per cent of each strategic raw material contained in the Union’s waste.

EU’s dependence on China for critical minerals:

• The European Union, the world’s largest trading bloc, aims to reduce its dependence on China and increase its domestic capacity for critical minerals through this legislation.
• The EU was 99 percent dependent on China for rare earth metals.

The raw materials listed as critical include: Aluminum [Am. 5], Bismuth, Boron — metallurgy grade, Cobalt, Copper, Gallium, Germanium, Lithium — battery grade, Magnesium metal, Manganese — battery grade, Natural Graphite — battery grade, Nickel — battery grade, Platinum group metals, Rare earth elements for magnets, Silicon metal, Titanium metal, Tungsten.

IEA assessment of critical mineral market:

• The first annual International Energy Agency (IEA) Critical Minerals Market Review, said rapid deployment of clean energy technologies has led to a huge demand for minerals such as lithium, cobalt, nickel, and copper.
• Over a five-year period between 2017 and 2022, the energy sector contributed to a 70 per cent rise in demand for cobalt and a 40 per cent rise in demand for nickel, the demand for lithium tripled in the same period.
• In 2021, China manufactured more than 80 per cent of different stages of solar panels (such as polysilicon, ingots, wafers, cells, and modules), more than double China’s global Photovoltaic demand.

Critical Minerals for India:

• Expert Committee under the Ministry of Mines has identified a set of 30 critical minerals for India.
• These are Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.
• India has set up KABIL (Khanij Bidesh India Limited), a joint venture of three public sector companies, to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.
• It ensures the mineral security of the nation; it also helps in realizing the overall objective of import substitution.