Guide to the EU Critical Raw Materials Act (CRMA)
The European Union (EU) has long been reliant on imports of critical raw materials (CRMs) from third countries, a dependency that poses significant risks as the world transitions toward a digital economy and contends with increasing environmental concerns.
The good news for Australian companies operating in the critcial raw materials sector is the CRMA opens up several pathways for funding, offtake discussion and european assistance.
This reliance on external sources renders supply chains vulnerable, making them susceptible to disruption. As a result, the EU is focused on improving the regulation and management of these supply chains to ensure their stability and sustainability.
To address these issues, the Critical Raw Materials Act (CRMA) was introduced and came into force on May 23, 2024.
The CRMA establishes a comprehensive framework to secure a stable and sustainable supply of critical raw materials essential for the EU’s industries. The regulation not only seeks to mitigate supply chain vulnerabilities but also to promote sustainable practices, aiming to ensure that the EU’s access to key raw materials is both secure and environmentally responsible.
Clear Priorities for Action
The CRMA outlines key priorities to strengthen the EU’s raw materials value chain, starting with the identification of materials that are critical to the EU economy. The CRMA designates 34 raw materials as "critical" (including cobalt, magnesium, and phosphorus), with 17 of these classified as "strategic" (such as aluminium, copper, and lithium). The list of critical and strategic raw materials will be regularly reviewed and updated by the European Commission, with the next update scheduled for May 24, 2027, and every three years thereafter.
One of the primary goals of the CRMA is to set clear benchmarks and ensure that sustainability remains a central focus. It emphasizes the need for the EU to bolster its domestic capacities across all stages of the raw materials value chain, including extraction, processing, and recycling. By reducing reliance on third-country imports and strengthening its own supply chains, the EU aims to build a more resilient and sustainable industrial base.
The CRMA also establishes the European Critical Raw Materials Board, which includes representatives from EU member states and the European Commission. This Board will coordinate the implementation of CRMA measures, monitor progress, and provide guidance on strategic partnerships with third countries to secure access to critical raw materials.
Ambitious Benchmarks
To achieve its objectives, the CRMA sets ambitious benchmarks for the EU to reach by 2030. These targets include:
Strategic Projects
A key component of the CRMA is the identification and support of strategic projects across the raw materials value chain. These projects, which may be located within the EU or in third countries, are designed to build capacity in areas such as extraction, processing, and recycling. Strategic projects are eligible for streamlined, faster authorization processes and improved access to financing. The goal is to expedite the development of secure and sustainable raw material supply chains.
In addition to supporting projects directly related to raw materials, the CRMA also encourages initiatives that focus on replacing strategic raw materials with alternative materials. This approach fosters innovation and helps to reduce dependence on scarce or geopolitically sensitive resources.
Moreover, projects that meet stringent environmental, social, and governance (ESG) standards will be prioritized. This ensures that the push for secure raw material supply chains aligns with broader EU sustainability goals. Companies wishing to have their projects recognized as strategic must apply by August 22, 2024, and must comply with the EU's principles for sustainable raw materials, which include commitments to environmental protection, human rights, and transparent business practices.
Risk Monitoring and Mitigation
To further protect the EU’s raw materials supply chains, the CRMA introduces new monitoring and mitigation measures. Beginning in 2026, EU member states will be required to submit annual reports detailing their stocks of strategic raw materials. These reports will allow the European Commission to monitor potential supply risks, conduct stress tests, and coordinate stockpiling efforts to ensure that member states maintain sufficient reserves of critical materials.
The CRMA also proposes the creation of a joint purchasing system, which would aggregate demand from EU companies that rely on strategic raw materials. By pooling demand, the EU hopes to strengthen its negotiating position with suppliers and prevent material shortages. This initiative is particularly crucial for sectors such as aerospace and defence, where reliable access to critical materials is essential.
Sustainability remains a key concern throughout the CRMA. Member states are required to implement national programs aimed at moderating the consumption of raw materials. Companies are encouraged to adopt technologies that promote the reuse, repair, and recycling of materials, which will help reduce waste and promote a more circular economy.
What Does the CRMA Mean for Companies?
For companies operating in the EU, the CRMA introduces several new requirements. By May 24, 2025, EU member states must identify large companies that rely on strategic raw materials for products such as batteries, hydrogen equipment, renewable energy technologies, and advanced chips. These companies will be required to conduct a risk assessment of their supply chains, mapping out where the raw materials they use are extracted, processed, and recycled.
If vulnerabilities in the supply chain are identified, companies must take steps to address them, either by diversifying their supply sources or finding alternatives to critical materials. While companies must report their risk assessments to their respective member states, this information will not be made public.
Companies covered by the CRMA must also ensure they comply with other relevant EU and national regulations, such as Germany's Supply Chain Due Diligence Act (LkSG), which may have overlapping requirements. By aligning their practices with both the CRMA and other regulations, companies can help the EU achieve its sustainability goals and ensure continued access to critical raw materials.
First call for strategic projects
The first call for strategic projects under the EU’s Critical Raw Materials Act (CRMA) marks a significant step toward securing a sustainable supply of critical raw materials for the EU.
Launched as part of the CRMA’s implementation, this call invites companies and organizations to apply for recognition of projects that aim to strengthen the EU’s raw materials supply chain. Strategic projects can focus on the extraction, processing, or recycling of key raw materials, or on developing alternatives that can replace critical or strategic materials.
The call is designed to accelerate the EU’s domestic capacities by streamlining approval processes and offering easier access to financing. Projects that align with the CRMA’s goals of sustainability and resilience will be prioritized. These projects must comply with high environmental, social, and governance (ESG) standards, ensuring that efforts to build secure raw material supply chains also support the EU’s environmental and social objectives.
Applications concluded on August 22, 2024 - however we expect a second call in 2025. This initiative represents a proactive approach to addressing supply chain vulnerabilities and fostering a circular economy within the EU. Here at Austlinx we assisted an ASX resource company company with a detailed application for the first call and are available to assist for further applications.
Conclusion
The CRMA offers a comprehensive framework to address the EU's reliance on imported raw materials, aiming to build secure, sustainable, and resilient supply chains. Companies will need to adapt to the new regulatory landscape by assessing and mitigating risks in their raw material supply chains, while also contributing to the EU's broader goals of sustainability and circularity. With implementation deadlines approaching, businesses must prepare to meet the CRMA’s requirements and ensure they remain competitive in a rapidly changing global market.
The good news for Australian companies operating in the critcial raw materials sector is the CRMA opens up several pathways for funding, offtake discussion and european assistance.
This reliance on external sources renders supply chains vulnerable, making them susceptible to disruption. As a result, the EU is focused on improving the regulation and management of these supply chains to ensure their stability and sustainability.
To address these issues, the Critical Raw Materials Act (CRMA) was introduced and came into force on May 23, 2024.
The CRMA establishes a comprehensive framework to secure a stable and sustainable supply of critical raw materials essential for the EU’s industries. The regulation not only seeks to mitigate supply chain vulnerabilities but also to promote sustainable practices, aiming to ensure that the EU’s access to key raw materials is both secure and environmentally responsible.
Clear Priorities for Action
The CRMA outlines key priorities to strengthen the EU’s raw materials value chain, starting with the identification of materials that are critical to the EU economy. The CRMA designates 34 raw materials as "critical" (including cobalt, magnesium, and phosphorus), with 17 of these classified as "strategic" (such as aluminium, copper, and lithium). The list of critical and strategic raw materials will be regularly reviewed and updated by the European Commission, with the next update scheduled for May 24, 2027, and every three years thereafter.
One of the primary goals of the CRMA is to set clear benchmarks and ensure that sustainability remains a central focus. It emphasizes the need for the EU to bolster its domestic capacities across all stages of the raw materials value chain, including extraction, processing, and recycling. By reducing reliance on third-country imports and strengthening its own supply chains, the EU aims to build a more resilient and sustainable industrial base.
The CRMA also establishes the European Critical Raw Materials Board, which includes representatives from EU member states and the European Commission. This Board will coordinate the implementation of CRMA measures, monitor progress, and provide guidance on strategic partnerships with third countries to secure access to critical raw materials.
Ambitious Benchmarks
To achieve its objectives, the CRMA sets ambitious benchmarks for the EU to reach by 2030. These targets include:
- Increasing the EU’s extraction capacity to at least 10% of its annual consumption of strategic raw materials.
- Ensuring that at least 40% of the EU’s annual consumption of strategic raw materials is processed within the EU.
- Enhancing recycling capacity so that 25% of the EU’s annual consumption of strategic raw materials comes from recycled sources.
- Reducing reliance on a single third country to no more than 65% for any strategic raw material at any stage of the value chain. This opens up opportunities for Australian and Canadian companies with CRM projects that are in sectors where the supply to EU is more than 65% from one country.
Strategic Projects
A key component of the CRMA is the identification and support of strategic projects across the raw materials value chain. These projects, which may be located within the EU or in third countries, are designed to build capacity in areas such as extraction, processing, and recycling. Strategic projects are eligible for streamlined, faster authorization processes and improved access to financing. The goal is to expedite the development of secure and sustainable raw material supply chains.
In addition to supporting projects directly related to raw materials, the CRMA also encourages initiatives that focus on replacing strategic raw materials with alternative materials. This approach fosters innovation and helps to reduce dependence on scarce or geopolitically sensitive resources.
Moreover, projects that meet stringent environmental, social, and governance (ESG) standards will be prioritized. This ensures that the push for secure raw material supply chains aligns with broader EU sustainability goals. Companies wishing to have their projects recognized as strategic must apply by August 22, 2024, and must comply with the EU's principles for sustainable raw materials, which include commitments to environmental protection, human rights, and transparent business practices.
Risk Monitoring and Mitigation
To further protect the EU’s raw materials supply chains, the CRMA introduces new monitoring and mitigation measures. Beginning in 2026, EU member states will be required to submit annual reports detailing their stocks of strategic raw materials. These reports will allow the European Commission to monitor potential supply risks, conduct stress tests, and coordinate stockpiling efforts to ensure that member states maintain sufficient reserves of critical materials.
The CRMA also proposes the creation of a joint purchasing system, which would aggregate demand from EU companies that rely on strategic raw materials. By pooling demand, the EU hopes to strengthen its negotiating position with suppliers and prevent material shortages. This initiative is particularly crucial for sectors such as aerospace and defence, where reliable access to critical materials is essential.
Sustainability remains a key concern throughout the CRMA. Member states are required to implement national programs aimed at moderating the consumption of raw materials. Companies are encouraged to adopt technologies that promote the reuse, repair, and recycling of materials, which will help reduce waste and promote a more circular economy.
What Does the CRMA Mean for Companies?
For companies operating in the EU, the CRMA introduces several new requirements. By May 24, 2025, EU member states must identify large companies that rely on strategic raw materials for products such as batteries, hydrogen equipment, renewable energy technologies, and advanced chips. These companies will be required to conduct a risk assessment of their supply chains, mapping out where the raw materials they use are extracted, processed, and recycled.
If vulnerabilities in the supply chain are identified, companies must take steps to address them, either by diversifying their supply sources or finding alternatives to critical materials. While companies must report their risk assessments to their respective member states, this information will not be made public.
Companies covered by the CRMA must also ensure they comply with other relevant EU and national regulations, such as Germany's Supply Chain Due Diligence Act (LkSG), which may have overlapping requirements. By aligning their practices with both the CRMA and other regulations, companies can help the EU achieve its sustainability goals and ensure continued access to critical raw materials.
First call for strategic projects
The first call for strategic projects under the EU’s Critical Raw Materials Act (CRMA) marks a significant step toward securing a sustainable supply of critical raw materials for the EU.
Launched as part of the CRMA’s implementation, this call invites companies and organizations to apply for recognition of projects that aim to strengthen the EU’s raw materials supply chain. Strategic projects can focus on the extraction, processing, or recycling of key raw materials, or on developing alternatives that can replace critical or strategic materials.
The call is designed to accelerate the EU’s domestic capacities by streamlining approval processes and offering easier access to financing. Projects that align with the CRMA’s goals of sustainability and resilience will be prioritized. These projects must comply with high environmental, social, and governance (ESG) standards, ensuring that efforts to build secure raw material supply chains also support the EU’s environmental and social objectives.
Applications concluded on August 22, 2024 - however we expect a second call in 2025. This initiative represents a proactive approach to addressing supply chain vulnerabilities and fostering a circular economy within the EU. Here at Austlinx we assisted an ASX resource company company with a detailed application for the first call and are available to assist for further applications.
Conclusion
The CRMA offers a comprehensive framework to address the EU's reliance on imported raw materials, aiming to build secure, sustainable, and resilient supply chains. Companies will need to adapt to the new regulatory landscape by assessing and mitigating risks in their raw material supply chains, while also contributing to the EU's broader goals of sustainability and circularity. With implementation deadlines approaching, businesses must prepare to meet the CRMA’s requirements and ensure they remain competitive in a rapidly changing global market.
