In February 2011, the European Commission adopted a new strategy document which sets out targeted measures to secure and improve access to raw materials for the EU in the coming years (see previous EU Reg Bulletin). This month, the European Parliament adopted a non-biding resolution supporting many of the measures proposed by the Commission, as well suggesting additions.
Raw materials are seen as vital inputs for the EU's economy and are particularly crucial for the development of modern environmentally friendly technologies such as electric cars and photovoltaics.
The Parliament welcomes the Commission's proposal to build on and further develop the results of the Raw Materials Initiative (RMI) which was launched by the Commission in 2008 to ensure that EU businesses and industry do not suffer a competitive disadvantage over resource-rich countries.
Following this Initiative, the Commission identified 14 critical raw materials: antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium, platinum group metals, rare earths, tantalum and tungsten.These critical raw materials are those which display a particularly high risk of supply shortage in the next 10 years and which are particularly important for the value chain. Regarding critical raw materials, the Commission intends to explore the potential for targeted actions (notably for recycling) as well as a possible stockpiling programme of raw materials. It will also monitor the issues of critical raw materials to identify priority actions and regularly update the list of critical raw materials.
The RMI also laid down measures in three areas which have been pursued and reinforced by the new strategy to improve access to raw materials for the EU.
The Commission's approach is based on 3 pillars:
•1st Pillar: Fair and sustainable supply of raw materials from global markets: the EU will pursue a raw materials diplomacy with a view to securing access to raw materials, in particular the critical ones, through strategic partnerships and policy dialogues. The Commission will focus on development policy and sustainable supply of raw materials and will reinforce the raw materials trade strategy.
•2nd Pillar: Fostering sustainable supply within the EU: promote technologies that increase investment in the EU's natural assets, promote investment in extractive industries and enhance the knowledge base necessary for an efficient raw materials strategy.
•3rd Pillar: Boosting resource efficiency and promoting recycling: the Commission suggests setting higher recycling rates. It will present a roadmap for a resource efficient Europe and will focus on better implementation and enforcement of existing EU waste legislation as well as enforcement of the Waste Shipment Regulation.
This new strategy also put forward a programme to increase the integrity and transparency of commodity derivatives markets.
The Parliament, in its report, not only supported the Commission in the pursuit of these three main aims but also strongly urged swift implementation of resource policy and resource diplomacy. The Parliament also agreed there was a need for more transparent trading.
In its report, it stated that the EU should in fact follow the US lead on the Dodd-Frank Bill and require companies to disclose whether they source their resources from conflict regions and require extractive industries to disclose their payments to foreign governments in order to enhance transparency and good governance. Parliament also asked for adequate focus to be given to commodity markets and the RMI but asked for these to be treated separately since it felt the two fields differ in nature and thus require specific measures to address their divergent problems. The Parliament also called for an EU high level interdepartmental raw materials task force along the lines of the US example. The task force would bring together the relevant Commission departments, the Joint Research Centre (JRC), the European Environmental Agency and the European External Actions Service (EEAS) to draw up, monitor and review policies. The task force would also promote the establishment of an early warning system - a risk radar - for market distortion and resource fuelled conflicts.
Lastly, the Parliament emphasised that despite efforts to increase resource efficiency, recycling targets and urban mining, the EU will nevertheless continue to rely on external suppliers for its raw materials and therefore raw materials diplomacy is of critical importance. As a result, it called on Commission to establish more mutually beneficial partnerships between the EU and resource-rich countries offering infrastructure or alternatively technology and know-how in return for resources.
Whereas the EU is already cooperating on raw materials with the US, Japan, Chile and the African Union, the EU is now seeking similar agreements with Argentina and Brazil by the end of the year. Discussions are also planned with Greenland. A high level EU-Africa conference on raw materials is set to take place on 1 December. It is expected many more such conferences are to come.
