The EU market is a huge market and opportunity for Australian companies.
 
There are 27 EU member states, containing a population of around 450 million people and a GDP of around € 16 trillion.
 
Each country has very specific, cultural and bureaucratic norms which can be complex and confusing.
 
Here in Germany, different regional ecosystems tend to specialise in different technical industries. There are 12 industry hubs in cities across Germany. Munich and Stuttgart metropolitan areas are known for high tech and automotive manufacturing. The Rhine-Neckar region is a centre of the chemicals and IT industry, and Frankfurt is the financial centre. High per­formance high-tech centres are developing rapidly in former East Germany, particularly the “lighthouse regions” of Dresden, Jena, Leipzig.
 
GTAI (Germany Trade and Invest) is an ideal contact for Australian companies looking to establish business operations in Germany.

Collaborations and partnerships are highly valued in Europe. The Fraunhofer-Gessellscaft is one of the world's leading applied research organisations and plays a crucial role in working with Industry in areas such as Artifical Intelligence, Quantum technologies, Resource efficiency and climate technologies.

Partnering with a German or EU research organisation such as Fraunhofer is a great way to build relationships, develop EU IP and be eligible for grants and subsidies in Europe.
 
There are 5 models for successfully scaling in Europe for Australian companies:

1. Global commodity strategic advantage such as resources like BHP and Fortescue but also smaller Australian resource companies that can assist Europe with goals of the EU Critical Raw Materials Act (CRMA).

2. Product Innovators - Australian companies with world-leading product or innovation capability such as CSL and ResMed. This also applies to small and mid cap companies such as those in the Hydrogen and clean energy sectors.

3. Business Model Pioneers - Australian companies developing innovative approaches to doing business that produces a competitive advantage. An example is Macquarie Infrastructure Fund.

4. Software Innovators - Australian software or tech companies that can expand rapidly by leveraging a scalable technology in a market segment that is specific and not over serviced by European companies. An example is EventsAir an events management software company.

5. Leveraging IP developed in Australia and collaborating with a German or EU company to develop and commercialise in EU. An example is Neometals (ASX: NMT) which developed Hydrometallurgical battery recycling capability in Australia and partnered with SMS Group in Germany to form a JV (Primobius) to develop and commercialise - resulting in agreements with Mercedes Benz.

We assist Australian and global companies refine, implement, adapt, and analyse their European strategy and make vital introductions with EU stakeholders and investors.

Well done to Western Australian company, Uluu for receiving AU $200,000 from the State Government’s Innovation Booster Grant (IBG) and the new Commercialisation Bridge Grant (CBG) programs.

The company recently raised AU $8.6 million to build a pilot plant, progress with first-to-market agreements, and develop a global brand around the Uluu story. As well as existing investors Main Sequence, Possible Ventures, Alberts and Misletoe Inc, some headline names such as Neil Perry from Rockpool and Karlie Kloss also invested.
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Uluu is committed to reduce global use of plastics which are produced from fossil fuels and release microplastics causes the accumulation of harmful waste after disposal and endangering flora, fauna, and human wellbeing.

Uluu uses farmed seaweed to produce PHAs - materials that are biocompatible, yet still provide the plastic-like properties. PHAs are reusable, recyclable, and compostable. They biodegrade, even if lost at sea! 

Uluu’s products are produced inside fermenters – not unlike brewing beer. The process involves 4 major steps.

1. Cook Seaweed - extract the sugars from seaweed using special enzymes
2. Ferment PHAs - Feed seaweed sugars to the PHA producing microbes
3. Extract PHAs – remove PHAs from inside the microbes
4. Make pellets – melt the PHAs to make pellets ready for product manufacturing.

Farmed seaweed can be regeneratively grown to entirely replace the fossil fuels we use to make four hundred million tonnes of plastic every year.

This is exactly the type of company EU impact investors are looking at!

Uluu co-founders Michael Kingsbury and Julia Reisser

Liquidity and volumes are down on most global exchanges from the highs of many years. In times of relatively high inflation and interest rates, retail investors tend to rush for cash. Larger institutional investors also increase cash and other no equity investments.

We consider in the global age, companies need to engage with as many investors as possible - not just investors on home exchange.

There are multiple avenues for doing this such as OTC listing on NASDAQ.

In Europe the most effective way for listed global corporates to engage and connect with German and EU investors is through a dual-listing on Frankfurt Stock Exhange. This is a simple and in-expensive process which provides access to a vast retail investor network. The customers on Trade Republic - the major EU neo-broker total more than 2 million for example.

The great benefit of the Frankfurt Stock Exchange quotation board listing is it is quick, efficient and has once completed there are no ongoing regulatory or compliance obligations.

Australian companies such as Droneshield Ltd (ASX: DRO) see huge engagement and trading on German exchanges with volumes often over 10 million shares alone. The great benefit of this for companies is there is broadening of the investor base with shareholders actively engaged from countries such as Germany, Austria, France and Switzerland.

List local and connect globally today.

On the 23rd May the EU Critical Raw Materials Act (CRMA) entered into force. The main objective of the CRMA is to establish and maintain a secure and sustainable supply of Critical Raw Materials to the EU.
The CRMA lists 34 materials which are considered strategic. Of these 17 are considered critical such as copper, cobalt and battery grade graphite.

The CRMA calls for specific goals in relation to mining, recycling and processing of critical raw materials.

• 10% of all critical raw materials consumed in the EU to be mined and produced in the EU by 2030. Therefore, new exploration projects in the EU, will receive increased attention and potentially more accessible and favourable extraction conditions. 
• A significant increase in recycling efforts, totalling up to 25 % of annual consumption in the EU by 2030. Waste landfills in Europe are expected to comprise large quantities of critical raw materials that could turn into lucrative mines. EU Member States are encouraged to devise measures to increase the circularity of their economies.
• 40% of all critical raw materials consumed in the EU are to be processed in the EU by 2030.

 
The CRMA is designed to strengthen all stages of the European critical raw materials value chain, diversify the EU’s imports to reduce strategic dependencies, improve the EU’s capacity to monitor and mitigate risks of disruptions to the supply of critical raw materials, and improve circularity and sustainability.

The first call for projects to be deemed “strategic projects” opened on 23 May and will close on 23 August 2024.

Those projects that receive 'Strategic Project' designation will benefit from more streamlined and efficient permitting procedures, as well as facilitated access to finance avenues.

Projects from third party countries such as Australia may qualify if they meet the objectives of the CRMA and the wider EU Green Deal.

Strategic Projects should be flagship projects with respect to technological innovation and sustainability. Applications to be lodged on the EU portal must include supporting documentation including detailed technical studies, timetable for development, permitting information, and sustainability practices. Also, a business plan should be attached for assessment of the viability of the project.

For projects in “third countries” such as Australia and Canada (outside the EU but considered strategic partners) the EU has pledged to work with those partner countries to assist with permitting and sustainability practices where possible.

In this respect, the signing of the MOU on a CRM partnership between Australia and the EU which was signed on 28 May 2024 was an important and integral step in the EU CRM Act for Australia.

The partnership seeks to enable the EU to diversify its supplies of materials necessary for the green and digital transitions, whilst contributing to the development of Australia's domestic critical minerals sector.
The partnership covers the entire critical and strategic minerals value chain: exploration, extraction, processing, refining, recycling, and processing of extractive waste.

 In addition to jointly developing projects along the entire value chain in the EU and in Australia, the partnership will also explore cooperation in countries where the EU and Australia have mutual interests, focusing on reducing environmental impacts and benefiting local communities. Additionally, it promotes innovative and digital technologies and services for mining, and other projects along the critical minerals value chain.

The agreement seeks to enhance cooperation between Australia and the EU in 3 main areas:
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• Integration of sustainable raw materials value chains, including networking, joint facilitation of projects (e.g., via joint ventures), creation of new business models and promotion and facilitation of trade and investment linkages, ensuring the well-functioning, sustainability, and resilience of these critical supply chains.
• Cooperation on research and innovation along the raw materials value chains, including on minerals knowledge and the minimisation of environmental and climate footprint.
• Cooperation to promote high environmental, social, and governance standards and practices, as well as improved policy alignment, driven by full respect of worker's conditions and safety, and by the need of a sustainable and secure production of critical minerals.

Following the signature of the MoU, a roadmap with concrete actions will be jointly developed to put the Strategic Partnership into practice, over the next six months.

Equity markets in Europe have picked up from a very dismal 2023.

There is always robust interest in quality ASX /TSX /CSE listed companies with a dual-listing in Frankfurt. Especially where those companies have a sustainable purpose and vision, clear strategic direction with strong competitive advantage, capable board and management and unique value proposition.

Stocks that see the greatest level of support are in the areas of critical raw materials, uranium, green metals and minerals, biotech and medtech, gold, clean energy and technology.

ASX listed companies such as Droneshield (ASX: DRO) and Brainchip (ASX: BRN) see very solid support om German exchanges. We also see Australian companies with quality global projects in the areas of critical raw materials engage very strongly such as Winsome Resources (ASX: WIN) with a very strong lithium project in Canada.

Uranium stocks in particular are trading very well this year in Germany such as Deep Yellow (ASX: DYL).

2024 has seen Novo Nordisk become the largest European company by market capitalisation and this has reignited interest in quality biotech and medtech stocks.

The outlook continues to be bright for quality ASX / global companies to increase EU investor interest and engagement.​

DroneShield (ASX: DRO) is a worldwide leader in counter-UAS security and technology.

DroneShield develops pre-eminent UAS security solutions that protect people, organisations, and critical infrastructure from intrusion from UAS threats. Its leadership brings world-class expertise in engineering and physics, combined with deep experience in defence, intelligence, and aerospace.

DoneShield is very well supported by German and European investors with its dual-listed shares often seeing volume of over 8 million shares a month on German trading exchanges such as Frankfurt, Tradegate, and Hamburg.

We expect interest to continue to increase for ASX listed companies with a German dual-listing that have significant or interesting European operations or contracts.

In October 2023, it was announced that DroneShield had been awarded AU$10 million from the Australian government to supply C-UAS equipment to Ukraine as part of an effort combat Russian attacks.
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Earlier this week the Company announced announce it has received a repeat order of A$5.7 million from a US Government customer for a number of its C-UxS (Counter-UxS) systems. C-UxS refers to counter-drone systems targeting multi-domain aerial, ground and maritime surface drones. 

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Europe works very differently to Australia in many respects. 
Relationships and business etiquette are vital when building relationships, networks and collaboration opportunities in Europe.
This sometimes takes time and patience which can be difficult to understand for executives used to a faster pace from Australia and North America.
It is worth engaging with Europe - European GDP is around $26 billion and represents about one sixth of the global economy.
The lesson for Australian companies wanting to engage in Europe is take time, discuss opportunities, create networks and relationships, explore working with an EU partner, understand the cultures and way of doing business and respect the EU way of doing things.
It is a shame more Australian companies are not active in Europe - we hope this will change and we are here to help.

A call for applications on strategic projects under the Critical Raw Materials Act is open as of 23 May 2024.
The first cut off date is 22 August 2024, 12:00 CEST.

Strategic projects make a meaningful contribution to the security of the Union’s supply of strategic raw materials. They are or will become technically feasible within a reasonable timeframe, showing expected production volumes, and implemented sustainably with a sufficient estimated confidence level. 
The Commission considers strategic projects of public interest due to their importance in ensuring the security of the supply of strategic raw materials and safeguarding the functioning of the internal market.
A list of 34 CRMs, including 17 strategic raw materials (SRMs) has been created and all are materials expected to grow exponentially in terms of demand.
The final list of CRMs (with SRMs* highlighted in bold) presented below will be reviewed regularly.
1. Aluminum/Bauxite/alumina
2. Coking Coal
3. Lithium
4. Phosphorus
5. Antimony
6. Feldspar
7. Light rare earth elements*
8. Scandium
9. Arsenic 1
10. Fluorspar
11. Magnesium
12. Silicon metal
13. Baryte
14. Gallium
15. Manganese
16. Strontium
17. Beryllium
18. Germanium
19. Natural Graphite
20. Tantalum
21. Bismuth
22. Hafnium
23. Niobium
24. Titanium metal
25. Boron
26. Helium
27. Platinum group metals
28. Tungsten
29. Cobalt
30. Heavy rare earth elements*
31. Phosphate Rock
32. Vanadium
33. Copper
34. Nickel 


The Criticial Raw Materials Act an important step forward by the European Union to address the challenges of secure and sustainable access to critical raw materials.

The CRMA’s provisions are significant as a mix of industrial policy instruments together with financial and economic assessment will create a pool of projects able to sustain European requirements for CRM's for energy, decarbonisation and electrification for years to come.