Critical Raw Materials Act: boosting the twin green and digital transition

Europe lacks raw materials but consumes heavily, relying on imports from countries that often clash with its values—leaving it exposed, as recent crises have shown. To safeguard its economic independence and supply stability, the EU introduced the Critical Raw Materials Act (CRMA) in 2024, designating 34 materials as critical—17 of which are strategic.

The Act aims to ramp up domestic supply and reduce external dependence. With the first list of projects under the CRMA now announced, including €22.5 billion in investments across 13 Member States, Europe is on track to boost extraction and recycling of vital materials.

With a new list of strategic projects due in summer 2025, the CRMA is more than just a piece of legislation—it’s a rare chance to get ahead. The smartest companies are already moving. Will yours?

Why the need for a Critical Raw Materials Act?

Rising geopolitical tensions—from the Ukraine war to reduced U.S. security support—have intensified EU’s concerns about strategic autonomy. Europe remains heavily reliant on non-EU countries for mining and processing of critical raw materials.

In 2023, Europe was highly dependent on non-EU sources for critical materials: 60% of beryllium from the U.S., 99% of boron from Türkiye, and 100% of key rare earth elements from China. China’s 2024 export restrictions on gallium and germanium underscore the vulnerabilities, emphasizing the need for stronger domestic supply chains and strategic international agreements, such as with Rwanda.

In order to strengthen the domestic Critical Raw Materials (CRM) market, the CRMA sets targets for the mining, processing and recycling of CRMs. The targets are set for 2030, when 10% of annual consumption must come from local extraction, 40% of consumption has to be processed within the Union and 25% of consumption must come from recycled materials. The Act sets a further limit of sourcing 65% of annual consumption of a single material from a single third country in order to diversity the supply chains and prevent continued dependence.

As mentioned before, the Critical Raw Materials Act identifies 34 “critical” materials, 17 of which are further listed as “strategic raw materials” (SRMs). The SRMs are expected to grow exponentially in terms of supply, and have complex production requirements, increasing the risk of supply issues over time. The European Commission has committed to review the list regularly, based on changes in supply and demand. The picture below shows all the materials in the Act, with the SRMs highlighted in yellow.

Source: Council of the EU, “Infographic – An EU critical raw materials act for the future of EU supply chains”, November 2023.

What does the Critical Raw Materials Act mean for your business?

The availability of CRMs in Europe has been under increasing pressure due to limited domestic reserves, surging global demand, and the impact of geopolitical tensions and potential trade conflicts. For industries ranging from clean energy and electric mobility to aerospace, digital technologies, and advanced manufacturing, these supply challenges can pose significant risks. Yet, they also offer a strategic opportunity for companies that adapt swiftly. The Critical Raw Materials Act introduces several measures that directly support these sectors:

 

Diversifying supply chains through strategic partnerships and trade agreements

The Critical Raw Materials Act (CRMA) helps sectors like clean energy, automotive (especially electric vehicles) and electronics reduce dependence on a few dominant suppliers by opening up new markets and creating stable trade agreements. Businesses should prepare to diversify their supply chains to enhance resilience and reduce risks from geopolitical disruptions. Engaging in or influencing these agreements can help secure a more reliable material flow, particularly for critical materials like lithium, cobalt, and rare earths.

 

Strengthening sustainable extraction and refining in Europe

By boosting domestic extraction and refining capabilities, the CRMA benefits industries such as industrial manufacturing, defence, and energy infrastructure, all of which rely on timely access to high-performance metals and specialty materials. Businesses should explore opportunities to invest in or align with European extraction and refining efforts, which may help ensure a more stable and sustainable supply of critical materials, reducing dependence on external actors.

 

Promoting a circular economy and local sourcing

The CRMA supports the shift toward a circular economy, promoting recycling and the use of locally sourced materials. This is especially impactful for sectors like construction, chemicals, and consumer electronics. Businesses should prepare to adapt their operations to meet increasing recycling targets and look for opportunities to incorporate recycled materials into their supply chain. Advocating for or participating in circular initiatives can offer long-term cost savings and improve sustainability credentials.

 

Fostering collaboration between industry and policymakers

The CRMA introduces a collaborative governance model, enabling industries to work with policymakers to shape critical raw material strategies. This model ensures that challenges are identified early, and solutions are tailored to each sector. Businesses should get involved in these discussions—whether through trade associations or direct engagement with policymakers—to help influence decisions that affect their supply chains and competitiveness. Being proactive in these dialogues will allow companies to better navigate the evolving landscape and secure strategic advantages.

Impact of Critical Raw Materials Act on semiconductors

In addition, the Critical Raw Materials Act addresses the critical challenge of semiconductor shortages in the EU and aims to strengthen Europe’s position as a global leader in technology. Semiconductors, which are integral to the digital economy, rely on various critical raw materials. These materials are essential not only for the production of consumer electronics, smart devices, and automobiles but also for energy transition technologies such as solar and wind power. For EU businesses, particularly those in tech, energy, and automotive sectors, this is a critical moment to prepare for the impact of the Critical Raw Materials Act. Companies need to assess their supply chains, identify risks, and take proactive steps to secure a steady supply of semiconductors and other strategic raw materials.

 

Master your supply chains risks

The Critical Raw Materials Act requires businesses to regularly evaluate their supply chains for raw materials and develop risk management strategies to address potential disruptions. Industries such as battery manufacturing, renewable energy generation, data transmission, and aerospace need to act quickly to understand their exposure to raw material shortages and start building resilience within their supply chains. By preparing for potential supply interruptions, businesses can ensure that they are not only able to withstand shocks but can also influence supply chain solutions and standards by engaging with relevant policy-making bodies.

 

Review your product portfolio

To stay competitive and compliant, EU companies should also start reviewing their product portfolios and identifying the critical raw materials they depend on. Mapping where these materials come from and engaging directly with suppliers will become essential for maintaining a secure and sustainable supply. Companies should also explore opportunities for research and development into recycled materials and circular economy solutions, as the CRMA incentivizes businesses to adopt these practices. By doing so, companies can reduce their reliance on scarce resources, lower production costs, and meet sustainability goals, ultimately gaining a competitive advantage.

What will the Commission do with the Critical Raw Materials Act?

The Critical Raw Materials Act seeks to improve the business environment by shortening the permitting process for mining and processing plants. Under the Act, the European Commission can label certain projects as “strategic”, allowing for streamlined permitting and access to financing, including possible state funds. Under the Act:

• Strategic mining projects will have to receive permits within a maximum of 27 months and processing and recycling facilities will receive them in a maximum of 15 months, compared to a possible five to 10 years for mining projects according to standard timelines.
• Potential strategic stockpiles are introduced, by first requiring Member States to report existing stocks before deciding on the needed levels of any EU-wide stockpiles.
• Critical minerals producers and sellers in the bloc will be required to display the environmental footprint of their products, to allow potential customers to make an informed and sustainable choice.

 

The Critical Raw Materials Board

Moreover, the Critical Raw Materials Act established the European Critical Raw Materials Board in May 2024. The Board is to ensure that Europe will reach the targets listed in the Act by 2030. Composed of Member State representatives and headed by the Commission, the Board gives recommendations to the Commission on which projects should be selected for funding and which should be listed as strategic. The Board will also coordinate the potential strategic stocks of SRMs, support the Commission in developing monitoring and stress tests for supply chains, and advise the Commission on the setting up of a joint purchasing platform and on the national circularity programmes. 

The Board and the Commission together chose the aforementioned first list of Strategic Projects. The 47 projects are based in 13 Member States and cover 14 out of the 17 SRMs and span the full raw material value chain: 25 projects involve extraction, while 24 focus on processing, 10 on recycling, and 2 on the substitution of raw materials. The projects include a particular attention to lithium (22 projects), nickel (12), cobalt (10), manganese (7), and graphite (11), which are all essential raw materials for the EU’s battery value chain.

The projects should help the EU to fully meet its 2030 extraction, processing and recycling targets for lithium and cobalt, while making significant headway on other key materials. In addition, projects focused on magnesium and tungsten are set to strengthen supply chains vital to the defence sector, which has recently gained further prominence.

The projects will be given a total investment of €22.5 billion and will gain operational support and streamlined permitting procedures.

 

Synergies with other EU acts

Moreover, the Commission uses other acts to help boost the objectives of the Critical Raw Materials Act. The Act will be supported in its recycling effort through the upcoming Circular Economy Act. Other initiatives, such as the Clean Industrial Deal, Industrial Decarbonisation Accelerator Act and the Action Plan for Affordable Energy, have all been designed with the Critical Raw Materials Act in mind and help with ensuring its full effectiveness.

 

International dimensions of the Critical Raw Materials Act

As part of diversifying supply chains and to boost strategic partnerships and free-trade deals, the Commission aims to financially support strategic projects in third countries via the Global Gateway strategy. This is a €300 billion initiative running between 2021 and 2027, aimed at countering the Chinese Belt and Road initiative, a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in more than 150 countries and international organisations.

Finally, the Commission will continue to use multilateral efforts to ensure healthy cooperation with third countries. This includes creating a Critical Raw Materials Club with likeminded countries around the world, strengthening the World Trade Organisation and expanding its network of free trade agreements.

 

Next steps

The Critical Raw Materials Act is a pivotal step in securing materials for Europe’s green and digital transitions. With strategic partnerships forming and new projects planned for 2025, now is the time to influence supply chains. The upcoming Clean Industrial Deal and Circular Economy Act will further strengthen recycling and processing efforts. Publyon is ready to help you engage and capitalize on these opportunities.

The clock is ticking for businesses to adapt to the evolving Critical Raw Materials landscape. With key regulations and strategic shifts on the horizon, now is the time to act. Publyon’s expert guidance will help you stay ahead of the curve and position your company for success. Don’t wait until the changes hit—reach out today to secure your competitive edge and navigate these challenges with confidence.