Source: Report Critical raw materials for strategic technologies and sectors in the EU - Publications Office of the EU

European Critical Raw Materials Act

The European Critical Raw Materials Act: what does it include and what possible effects could it have on Switzerland?

With the European Critical Raw Materials Act, the EU aims to reduce dependence on imports for certain raw materials in the future. This stronger focus by the EU on its own production from primary and secondary sources entails both risks and opportunities for the Swiss recycling industry.

If we are to fight climate change, it is essential that we switch from our fossil-based energy system to sustainable solutions. Many of the key technologies that are most promising at present, such as electricity generation from wind or solar energy, electric vehicles, energy storage solutions and smart power grids, require significant amounts of special raw materials. Like Switzerland, the European Union depends on imports for most of these critical raw materials (CRMs), either because there are no primary deposits or because these substances cannot be used due to economic, regulatory or socio-political circumstances.

This dependency poses a significant risk to the success of the green transformation in Europe. Geopolitical events such as the war in Ukraine or supply chain bottlenecks highlight just how vulnerable the global system is. For many raw materials, the low level of diversification among the supplying countries creates an additional risk. For example, 97% of the magnesium needed in the EU is imported from China.

The European Commission examined the matter of access to raw materials in the EU as early as 2008 as part of the European Raw Materials Initiative. Following the various supply bottlenecks in 2022, the issue once again took centre stage, leading to EU politicians taking rapid action.

The European Critical Raw Materials (ECRM) Act, published in March 2023, aims to reduce these risks by increasing capacities across the entire production and supply chain. Europe should be able to provide some of the raw materials itself where possible.

ECRM Act

The ECRM Act sets benchmarks for EU-wide capacities along the supply chain of critical and strategic raw materials for 2030 (see Figure 1):

10% of the EU’s annual extraction needs for raw materials should be extracted in Europe.
40% of further processing of these raw materials should take place in the EU.
15% of the EU’s raw material requirements should come from recycling within Europe.

To avoid one-sided dependencies, the EU should not source more than 65% of its annual requirements for a strategic raw material at any relevant processing stage from a single non-EU country. European capacity development is supported: the entire value chain – extraction, refining, processing and recycling – is to be strengthened through exploration of local primary sources in Europe, simpler approval processes and easier access to funding. The EU will also increase its capacity to monitor and control raw material flows to make supply chains more resilient. Stress testing, strategic holdings and sustainable investments are supported.

Secondary sources are also relevant, as raw materials can be recovered from production waste or recycled products. The purpose of the ECRM Act is to promote the circular economy and make promising recovery technologies market-ready. Important sectors include the automotive sector, battery storage and traction batteries, IT and household electronics and renewable energies.

A strengthened recycling sector in the EU and a greater focus on the recovery of materials that have yet to be recovered on an industrial scale will also have an impact on the Swiss recycling industry. An example could be the future recovery of the rare elements neodymium and dysprosium, which are used in strong magnets.

The ECRM Act aims to reduce dependence on imports, which could lead to the EU introducing stricter export controls for critical raw materials. Since it is not a member of the EU, Switzerland could be affected by such export restrictions, as this could make access to certain raw materials more difficult.

In summary, the European Critical Raw Materials Act requires close cooperation between Switzerland and the EU to address the challenges in the raw materials sector and find sustainable solutions.

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