The European Commission published the European Critical Raw Materials Act to come into force in early May 2024.1 The CRMA is the first of its kind in Europe. In order to diversify external supply from outside the EU and reduce the EU's dependence on a single country, the CRMA sets benchmarks for domestic production capacity for these materials.
The provision stipulates that, to the extent permitted by EU reserves, the EU's domestic mining capacity should be able to extract at least 10 per cent of the annual consumption of strategic raw materials in terms of ores, minerals or concentrates. It also stipulates that domestic processing capacity, including all intermediate processing steps, should be able to produce at least 40% of the EU's annual consumption of strategic raw materials. In addition, EU recycling capacity, including all intermediate recycling steps, should be able to produce at least 25% of the EU's annual domestic consumption.
Importantly, the CRMA also states that by 2030, no more than 65% of the EU's annual consumption of each strategic raw material at any relevant processing stage may come from a single third country. It is worth pointing out that the above targets are not legally binding, which means that member states cannot be prosecuted for non-compliance.
Raw materials considered strategic include aluminum, cobalt, copper, gallium, lithium, graphite, nickel, silicon metal and rare earth elements used in magnets.
The Commission plans to finalize a list of strategic projects by December 2024 to ensure security of supply in the EU. According to the plan, these projects will speed up the approval process and simplify access to financing.
As some EU politicians have pointed out, mining projects still suffer from financing difficulties. Anna-Michelle Asimakopoulou, a member of the Greek parliament, called the CRMA an important first step, but added that private companies need more incentives to invest.
Jorna, the European Commission's director general for the internal market, added that the CRMA opens the door to joint demand aggregation and joint sourcing of raw materials, which is similar to the current joint gas sourcing system. The regulation also requires companies to scrutinize the security of their raw material supplies.
The NZIA for industries closely linked to the CRMA was adopted at the April 2024 plenary session of the European Parliament. Formal approval by the Council of the European Union is expected in the summer of 2024.
Under the National Energy and Climate Plans , the NZIA aims to achieve a target of 40% of the EU's annual demand to be met by net-zero technology manufacturing capacity by 2030, as well as 15% of the global market value. Like CRMA, NZIA is not binding on member states.
Technologies supported by the NZIA include renewable energy systems such as solar, hydrogen, onshore and offshore wind and energy storage , but also carbon capture and nuclear.
Specifically, in solar energy, NZIA has set a target of achieving at least 30GW of PV manufacturing capacity across the entire PV value chain by 2030, which is in line with the target set by the European Solar Photovoltaic Industry Alliance. According to the European Commission, 97% of solar panels imported into the EU currently come from China. According to NZIA, member states should also develop national programs to support large-scale deployment of rooftop solar.
In terms of financing, several EU funding programs are available to finance investments in net-zero technology manufacturing projects, such as: the Recovery and Resilience Facility, InvestEU, cohesion policy programs, and the Innovation Fund (Recovery and Resilience Facility, InvestEU, cohesion policy programs, and the Innovation Fund).
To date, the Innovation Fund has allocated $400 million ($434.8 million) over two years to support new investments in solar manufacturing projects. For example, in January 2024, Enel Green Power secured $560 million in financing for the expansion of its 3Sun HJT cell and module production. 3Sun, located in Catania, Sicily, has a current annual capacity of about 200MW, which is set to be expanded to 3GW by the end of 2024, making it the largest solar plant in Europe.
Nonetheless, industry insiders believe that this is a drop in the ocean and that NZIA is not as effective as IRAs in the US because the EU cannot use taxes as a reimbursement tool and because the EU relies to some extent on member states to provide subsidies from their own budgets.
So both CRMA and NZIA targets are seen as ambitious but difficult to achieve. For key raw materials, mining in Europe remains difficult because it is unpopular with voters and risks accusations of neo-imperialism or climate colonialism once EU industry moves abroad, and because the private sector does not have the mining and processing skills. However, raw material partnerships with Kazakhstan, Canada, Chile and other countries are a good start.
The International Energy Agency executive director law Fatih Birol said that 25 years ago, Germany, Spain, Italy began the world photovoltaic adventure, when Europe was the leader and manufacturer of photovoltaic industry, but then the government ceded this position to China. The EU needs stronger policies and clear incentives to implement strategic industrial programs.
Source：https://mp.weixin.qq.com/s/hhmOfJw-Y5432gbV2AG3hQ