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EU 2020 CRM list

4 March 2021

This article first appeared in Bulletin #184, the quarterly journal of the T.I.C.

 

The 2020 list

In September 2020 the European Union (EU) published its fourth Critical Raw Materials (CRM) list for the EU1. The list of 30 materials includes both niobium and tantalum, a position which is unchanged from the previous (2017) list.

The T.I.C. has followed this project closely through its membership of the TARANTULA Project (https://h2020-tarantula.eu) and the CRM Alliance (www.criticalrawmaterials.org).  The Association was contacted for information by analysts working on this project on behalf of the European Commission, although the EU’s methodology prevents industry stakeholders from proposing a position regarding the inclusion or exclusion of either element2. The 30 raw materials listed below were chosen from a shortlist of 83 individual materials. Those on the list are  deemed to be critical for the EU because risks of their supply shortage and impacts on the economy are higher than those of most other raw materials. According to the analysis behind the new list, since 2017 the supply risk for tantalum has increased, while niobium has seen an increase in both supply risk and economic importance.

Antimony

Cobalt

Heavy REEs*

Natural rubber

Silicon metal

Baryte

Coking coal

Indium

Niobium

Strontium

Bauxite

Fluorspar

Lithium

PGMs

Tantalum

Beryllium

Gallium

Light REEs*

Phosphate rock

Titanium

Bismuth

Germanium

Magnesium

Phosphorus

Tungsten

Borates

Hafnium

Natural graphite

Scandium

Vanadium

* REEs - rare earth elements

The 2020 list confirms 26 of the 2017 CRMs. Three CRMs in the 2020 list were not considered as critical in the 2017 list: bauxite, lithium and titanium. Conversely, helium, critical in the 2017 CRM list, is no longer in 2020. Strontium is the only material that appears for the first time in the 2020 list of CRMs.

All raw materials, even when not classed as critical, are important for the EU economy. The fact that a given material is classed as non-critical does not imply that availability and importance to the EU economy can be neglected. Moreover, the availability of new data and possible evolutions in EU and international markets may affect the list in the future.

Development of the CRM list

The EU’s initial Raw Materials Initiative was first developed in 2008 to tackle the challenges related to what it saw as access to raw materials during a period commonly described as a Chinese-driven commodities ‘supercycle’, a period of relatively high commodity prices. The first list of 14 critical raw materials was produced by the European Commission in 2011 and included both tantalum and niobium. Tantalum was not a CRM in the second list but was in the third list. Niobium has been on all four lists.

Purpose of the EU’s CRM list

The EU is one of many government bodies around the world that monitor the consumption and supply patterns of raw materials within their territory. For some the purpose is military in nature, but for the EU the primary purpose of the list is economic: to identify the raw materials with a high supply risk and a high economic importance to which reliable and unhindered access is a concern for European industry and value chains.

The list provides a factual tool for trade, innovation and industrial policy measures to strengthen the competitiveness of European industry in line with the renewed industrial strategy for Europe, for instance by:

  •  identifying investment needs which can help alleviate Europe's reliance on imports of raw materials;
  •  guiding support to innovation on raw materials supply under the EU's Horizon 2020 research and innovation program;
  •  drawing attention to the importance of critical raw materials for the transition to a low-carbon, resource efficient and more circular economy.

Although the list is only advisory (and doesn't give exemption to REACH or other EU legislation) the list is expected to encourage the EU member states to incentivise domestic production of critical raw materials through enhancing recycling activities and when necessary to facilitate the launching of new mining activities. It also allows to better understand how the security of supply of raw materials can be achieved by diversifying sources of supply and through increased substitution away from those materials on the CRM list. It is also used as a supporting element when the EU is negotiating trade agreements, challenging trade-distortive measures, developing  research and innovation actions.


Figure 1: The materials assessed for criticality in 2020 clearly show that those with higher Economic Importance and Supply Risk are those that are considered to be critical. Materials on the new CRM list are red dots, while blue dots show non-critical materials. (Image: EU)

Methodology

To support the new CRM list the European Commission publishes a comprehensive guide to its methodology, a prescriptive document containing the guidelines and the ‘ready-to-apply’ methodology for the EU criticality assessment. Economic importance (EI) and supply risk (SR) remain the two main parameters used to determine the criticality of a raw material (see figure 1).

Economic importance aims at providing insight into the condition of a material for the EU economy in terms of end-use applications and the value added of corresponding EU manufacturing, and is corrected by a substitution index related to technical and cost performance of the substitutes for individual applications.

Figure 2:  The criticality of tantalum and niobium in 2017 and 2020. However, the assessment methodology is revised in every list, making direct comparisons between the different lists potentially misleading. (Image: TARANTULA)

Supply risk reflects the risk of a disruption in the EU supply of the material and is based on the concentration of primary supply from raw material producing countries, considering their governance performance and trade aspects.

Depending on the EU import reliance, consideration is given to the global pattern of production and also from which countries the EU sources its raw materials. Supply risk is measured at the ‘bottleneck’ stage of the material (extraction or processing) which presents the highest supply risk for the EU. Substitution and recycling are considered risk-reducing measures.

CRMs and the Joint Research Centre (JRC)

The JRC is the European Commission's science and knowledge service which employs scientists to carry out research in order to provide independent scientific advice and support to EU policy. They regularly publish studies on strategic technologies and sectors in the EU, including one that focused on CRMs. CRMs are essential for the EU to deliver on the climate ambition of the European Green Deal, one of its major policies. The objective of no net emissions of greenhouse gases by 2050 will require electrification efforts and the diversification of our sources of energy supply which in turn requires a huge increase in raw materials.

The JRC published “Critical Raw Materials for Strategic Technologies and Sectors in the EU - A Foresight Study“ a foresight study, which accompanies the fourth list of CRMs for the EU and translates the climate-neutrality scenarios for 2030 and 2050 into the estimated demand for raw materials. Such a report provides a systematic analysis of supply chain dependencies for nine selected technologies used in three strategic sectors: renewable energy, e-mobility, defence and aerospace. This report carried considerable weight when the 2020 CRM list was being considered. 

The JRC study indicates that for batteries for electric vehicles and energy storage, we would need up to 18 times more lithium and 5 times more cobalt in 2030, and almost 60 times more lithium and 15 times more cobalt in 2050, compared to the current supply to the whole EU economy. Demand for rare earths used in permanent magnets, e.g. for electric vehicles, robots or wind generators, could increase tenfold. For the EU’s Hydrogen Strategy to succeed, it would need a reliable supply of platinum group metals for fuel cells and electrolysers.

CRMs are also essential for shaping Europe’s digital future. According to the foresight study, 120 times the current EU demand of the rare earth neodymium could be required to provide data storage for the global data sphere in 2025.

Figure 3: Showing the raw materials used in key technologies for the digital and green transitions, and their relative supply risk for the materials listed in the 2020 CRM list (image: JRC)

The JRC study indicates that for batteries for electric vehicles and energy storage, we would need up to 18 times more lithium and 5 times more cobalt in 2030, and almost 60 times more lithium and 15 times more cobalt in 2050, compared to the current supply to the whole EU economy. Demand for rare earths used in permanent magnets, e.g. for electric vehicles, robots or wind generators, could increase tenfold. For the EU’s Hydrogen Strategy to succeed, it would need a reliable supply of platinum group metals for fuel cells and electrolysers.

CRMs are also essential for shaping Europe’s digital future. According to the foresight study, 120 times the current EU demand of the rare earth neodymium could be required to provide data storage for the global data sphere in 2025.

The EU believes that a secure supply of raw materials, both from primary and secondary sources, together with continued research and innovation policies for substitution and more sustainable product design, is a sine qua non for competitive and resilient EU industries, their recovery from the COVID-19 crisis and transition towards green and digital industries.

Tantalum and niobium

Tantalum is considered to have low supply risk in the JRC study, although this risk has increased since the third CRM list was published. The critical stage for tantalum is extraction, since a considerable amount is sourced from the Democratic Republic of Congo and Rwanda, two countries with a very high ranking in the World Governance Index (7.6 and 5.2, respectively). On the other hand, the end-of-life recycling input rate for tantalum is said to be minimal and its economic importance is increasing in capacitors, electro-optical systems and gas turbine engines.

Niobium has seen significant increases in both supply risk and economic importance since the 2017 report was published. Niobium is mentioned as potentially becoming essential to electric batteries, which could make it a crucial technology with relevance in all strategic sectors considered by the EU, including Renewables, E-Mobility, Defence and Space (see Figure 3).

Figure 4: The JRC study looks at the use of CRMs in various sectors, for example a combat aircraft (image: JRC)

Conclusions

Raw materials, even if not classed as critical, are important for any economy, whether mined domestically or imported from aboard, since they are at the beginning of manufacturing value chains. Their availability may quickly change in line with trade flows or trade policy developments, geopolitical changes or force majeure events. The EU believes that these risks underline a general need of diversification of supply and the increase of recycling rates of all raw materials.

Defining “critical” raw materials is highly subjective4and depends on the interrelationships between raw materials, intermediate products and finished goods within the territory in question. What some consider critical may not be a concern for others in possession of different natural resources and consumption habits. However, while comparisons between CRM lists can be challenging, there can be no doubt that dispassionate, reasoned assessment of a market by fresh eyes can sometimes offer a new perspective or demystify an opaque corner of the market, offering food for thought to those of us who are involved in the global commodities markets.

 

Notes:

1. European Commission, Study on the EU’s list of Critical Raw Materials (2020), Publications Office of the European Union, Luxembourg, 2020. https://doi.org/10.2873/398823, https://rmis.jrc.ec.europa.eu/uploads/CRM_2020_Report_Final.pdf.

2.The methodology uses the following data priority for the calculations: official EU data; Member State authorities’ public data; public data from international organisations and non-EU authorities (e.g. USGS); and only “exceptionally, as a last option, and if duly justified” will they consider trade/industry associations’ public data and expert judgement.

3.“Critical Raw Materials for Strategic Technologies and Sectors in the EU - A Foresight Study (2020)”, available to download at https://rmis.jrc.ec.europa.eu/uploads/CRMs_for_Strategic_Technologies_and_Sectors_in_the_EU_2020.pdf

4.As a fictional example, if a dragon was asked to define ‘critical raw materials’ it would almost certainly say “Gold!” (hence the cover of this magazine), at least according to J.R.R. Tolkien (see The Hobbit).


 


 


 


 

 

 


 


 


 

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