Critical raw materials – new European Union regulation

New law on critical raw materials in the EU

On April 11, 2024, the European Union adopted an important legal act aimed at ensuring access to strategic raw materials. The regulation on critical raw materials (the so-called Critical Raw Materials Act - CRMA) entered into force on May 23, 2024.

Three pillars of European industrial policy

The Critical Raw Materials Regulation, combined with the Net-Zero Industry Act and the Chips Act, creates a comprehensive regulatory system for European industrial policy. It sets ambitious goals for 2030:

• Increasing mining in the EU: At least 10% of the EU's annual demand for critical raw materials is to come from mining within the EU;
• Strengthening EU processing: At least 40% of the EU's annual demand for critical raw materials is to be processed within the EU;
• Promoting recycling in the EU: At least 25% of the EU's annual demand for critical raw materials is to come from internal recycling;
• Diversification of supply chains: No more than 65% of the EU's annual demand for any strategic raw material at the appropriate stage of processing may come from a single third country.

The Critical Raw Materials Regulation is an important step towards building a more resilient and sustainable EU economy.

CRMA will primarily affect industries operating in the following areas:

• electric motors,
• industrial robots,
• light means of transport, including passenger cars,
• refrigeration units,
• heat pumps,
• automatic washing machines and dryers,
• microwave ovens,
• -vacuum cleaners,
• dishwashers.
• similar electronics and household appliances that use electric motors.

The new regulations will significantly affect companies operating in strategic sectors by introducing new mechanisms such as 'joint purchasing' or by supporting selected strategic projects.

Find out more on the European Commission website: European Critical Raw Materials Act

Strategic projects

The new regulation may be an opportunity to increase competitiveness and security of supplies of critical raw materials for Polish companies. The key mechanism of the new act on critical raw materials is to support strategic projects in the value chain of strategic raw materials.

Critical raw materials of key importance to the economy

Critical raw materials are the foundation of modern life. They are present in almost every aspect of our everyday life. From electronic devices to medical equipment to critical infrastructure, critical raw materials ensure the functioning of Member States' economies.

As the European Union moves to transition away from fossil fuels and towards clean energy systems, demand for base metals, battery components, rare earth metals and other raw materials will increase dramatically. The answer is a new regulation that aims to strengthen all stages of the European value chain of critical raw materials, including: by designating key strategic projects.

Strategic projects with the support of the European Council for Critical Raw Materials

Any project involving the extraction, processing, recycling or substitution of strategic raw materials listed in Annex I to the Act may be considered a strategic project provided it meets the criteria set out in Article 6 and Annex III of the Critical Raw Materials Regulation (CRMA).

European Council for Critical Raw Materials, a new body within the European Commission composed of high-level representatives from individual EU Member States, is intended to support the European Commission in the selection and implementation of strategic projects.

The call for applications to recognize the project as strategic began on May 23, 2024. The first deadline for submitting applications is August 22, 2024 at 12:00 (Central European time). Applications must be completed in accordance with the instructions available in the electronic form.

By February 24, 2025, Member States should designate a single contact point through which applicants can obtain full information on the possibility of obtaining a strategic project permit. The contact point should enable applicants to fulfil all responsibilities related to the strategic project.

More information about strategic projects, an application form and a guide for applicants can be found on the strategic projects website.

Critical Raw Materials Act (CRMA) - 'joint purchasing' mechanism

The "joint purchasing" mechanism, i.e. joint/Community purchases of critical raw materials, is one of the key elements of the Critical Raw Materials Act (CRMA). This new mechanism is intended to cover various products in the strategic raw materials value chain, including the extraction, processing and recycling of these materials. A similar system has already been successfully implemented under the EU Energy Platform for the joint purchase of gas.

The aim of 'joint purchasing' is to search for offers from suppliers corresponding to the cumulative demand of enterprises based in the European Union interested in the consumption of strategic raw materials.

New obligations for Polish entrepreneurs

1. Risk assessment

With the entry into force of CRMA, entrepreneurs will be obliged to periodically assess the risk of their supply chains and their susceptibility to threats from outside the EU. The obligation will apply to enterprises that in the year preceding the financial year employed more than 500 employees and whose revenues exceeded € 150 million.

By May 24, 2025, Member States will indicate to the European Commission companies that use strategic raw materials. From now on, at least every three years, entrepreneurs will be obliged to assess the risk of their supply chain of strategic raw materials. The risk assessment should cover:

a) preparing maps of the sites of extraction, processing or recycling of the strategic raw materials they use;

b) analysis of factors that may affect their supplies of strategic raw materials;

c) an assessment of their vulnerability to supply disruptions.

2. Increased recycling rates

Within two years from the entry into force of the CRMA implementing regulation (the EC is to adopt it by May 24, 2025), member states must adopt programs that will increase the level of waste collection, sorting and processing and the recovery potential of critical raw materials.

This means that entrepreneurs who trade in products containing critical raw materials will be obliged to ensure higher levels of recycling. It can be expected that Poland will, in particular, amend the Act on batteries and accumulators (consolidated text: Journal of Laws of 2022, item 1113, as amended). This, in turn, may translate into higher product fees.

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3. Permanent magnet marking

Within two years from the entry into force of the CRMA implementing regulation (the EC is to adopt it by November 24, 2026), every person who places products with permanent magnets on the market will be obliged to label these products. The permanent magnet product marking should indicate that the product contains a permanent magnet.

4. Content of recycled elements

From May 24, 2027, every person who places products with permanent magnets on the market will be obliged to present information on the content of elements in permanent magnets embedded in the products on a publicly accessible website. We are talking about the content of elements such as neodymium, dysprosium, praseodymium, which were recovered from post-consumer waste.

By December 31, 2031, the European Commission will indicate the minimum share of elements in magnets that manufacturers must declare.

5. Carbon footprint

Entrepreneurs placing critical raw materials on the market, including processed and recycled raw materials, for which the European Commission will establish rules for calculating and verifying the environmental footprint, will be obliged to provide environmental footprint declarations. This document will include, among others:

• information about the country and region where the critical raw material was extracted, processed, refined and recycled;
• environmental efficiency class.

Timeline – key responsibilities of entrepreneurs dealing in critical raw materials

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