12 December 2022

EU Critical Raw Materials Act should ensure a resilient Cobalt Supply Chain

By Sarah Schneider, Policy and Communications Officer, Cobalt Institute The EU is working on the Critical Raw Materials Act - Europe’s attempt to address perceived risks around supply chains for critical raw materials in light of expected demand growth. The Act should provide a vision on how the EU will secure sufficient supply of critical raw materials for the green and digital transition and increasing its strategic autonomy. It will aim to strengthen the EU’s raw material supply chains through a package of legislative and non-legislative measures, including a communication on the geopolitical angle, expected to be published at the beginning of 2023. The European Commission – the EU’s executive branch – indicated in its impact assessment that the Act will be based on four pillars:

  1. Identification of a set of “strategic critical raw materials”;
  2. An early warning system;
  3. Better access to funding in a global context; and
  4. An improved waste and circularity framework to promote recycling.

Cobalt is one of the critical raw materials for the EU: it plays a central role in transition to a low-carbon economy and is crucial for batteries powering electric vehicles. In this vein, four considerations will be important in the Critical Raw Materials Act.

  • According to the Eurometaux and KU Leuven study, Europe’s 2030 energy transition goal is projected to require between 10-20 kt of cobalt in 2030, rising to 50-60 kt in 2050 ((equivalent to up to 350% of today’s European cobalt demand). To anticipate this demand increase, the European Critical Raw Materials Act needs to ensure a resilient cobalt supply chain. As such, it will be crucial for the EU to embed critical minerals in the development of strategic partnerships or trade agreements with cobalt-rich countries such as the Democratic Republic of the Congo and Australia.
  • The Critical Raw Materials Act should also consider cobalt recycling, processing and refining, which are all important if Europe wants to achieve its ambition for open strategic autonomy. Without access to appropriate processing and refining facilities for cobalt, this cannot be achieved.
  • In this context, it is essential to align chemicals management laws like OSH and REACH with the Critical Raw Materials Act. There should be some form of policy mechanism to ensure that strategic critical minerals policy is aligned with chemicals policy, or the two will likely fall into conflict with one another.
  • Finally, and in light of suggestions that the Act might extend recycling efficiency and recycled content requirements beyond batteries, the Act should guarantee technology neutrality by establishing a mechanism to ensure products with recycling efficiency and recycled content targets for critical minerals are done so on the basis of a level playing field to avoid market distortions that could run counter to the concept of “open strategic autonomy”.

The cobalt industry is important for the EU: not only is it needed for the green transition, it also creates employment opportunities as Europe is the third largest region for total global cobalt value chain employment. A holistic approach that includes collaboration with countries and stakeholders around the world and increase the capacities of recycling, processing, and refining in Europe, will make the Critical Raw Materials Act a success.

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