EU: Last day to submit comments on EU Critical Raw Materials Centre 

 

Tomorrow is the last day to submit comments about the EU Critical Raw Materials Centre to the EU Commission. 

Critical raw materials are crucial for EU manufacturing, green, digital, aerospace and defence industries. The EU faces strong dependencies in its access to materials such as rare earth elements, which are being exploited by other geopolitical players. 

To address them, as called for in the Draghi report, the Commission is planning to set up an EU Critical Raw Materials Centre consisting of 4 strands: joint purchasing, stockpiling, investments, and raw materials intelligence. 

Political context of the consultation: 

The European Union is highly dependent on imports of critical raw materials (CRMs), many of which originate from a limited number of supplier countries. This concentration of supply creates significant vulnerabilities, as access to these materials is increasingly influenced by geopolitical considerations and export restrictions. As a result, the EU faces growing risks to its industrial competitiveness, economic security and strategic autonomy. 

To address these challenges, the EU adopted the Critical Raw Materials Act (CRMA) in 2024. The Regulation establishes a framework to strengthen the resilience of the EU’s critical raw materials supply chains by increasing domestic production capacities, reinforcing strategic value chains and diversifying sources of supply. It sets ambitious benchmarks for 2030, aiming for the EU to have the capacity to extract at least 10%, process 40% and recycle 25% of its annual consumption of strategic raw materials. 

Building on the CRMA, the European Commission adopted the RESourceEU Action Plan in response to the increasing use of export restrictions and other supply chain disruptions as geopolitical tools. The Action Plan seeks to accelerate the implementation of the CRMA and further enhance the EU’s resilience against supply shocks. As part of this initiative, and in line with the objectives of the CRMA, the Commission plans to establish a European Critical Raw Materials Centre in 2026. Announced under the Clean Industrial Deal, the Centre will form a key pillar of the EU’s strategy to secure a sustainable and diversified supply of critical raw materials. In developing the Centre, the Commission intends to draw on the experience of Japan’s Organization for Metals and Energy Security (JOGMEC). 

The EU Commission’s initiative aims to tackle the following problems: 

1. Unfavourable investment conditions for CRM projects

Critical raw materials (CRM) projects in the EU and partner countries continue to face an unfavourable risk-return profile, largely due to insufficient and fragmented financial support. The recent rare earths supply crisis highlighted the EU’s limited ability to rapidly deploy financing instruments to strategic projects and areas requiring urgent risk mitigation. Although several EU and national funding mechanisms exist and private investment in CRM value chains is increasing, overall financing remains less coordinated and less competitive than that offered by major global competitors. Countries such as Japan, the United States and China are able to respond quickly to strategic investment opportunities, including securing feedstock and acquiring equity stakes in production facilities abroad, whereas the EU lacks comparable instruments. Future funding mechanisms, including those envisaged under the proposed European Competitiveness Fund, together with Member State initiatives, will need to be mobilised effectively and in compliance with EU State aid rules. 

2. Weak bargaining position of European CRM purchasers

European industry continues to face difficulties in securing reliable access to critical raw materials, often negotiating with suppliers that possess significantly greater market power and benefit from government support. The demand aggregation and matchmaking platform established under the Critical Raw Materials Act represents an important first step by enabling companies to consolidate demand for strategic raw materials while remaining fully compliant with EU competition rules. However, it remains necessary to assess whether the current legislative framework is sufficient to strengthen the bargaining position of European buyers and address structural imbalances in global CRM markets. 

3. Limited resilience to supply disruptions

The EU’s ability to withstand disruptions in the supply of critical raw materials remains limited, as demonstrated by China’s export restrictions on rare earth elements. Strategic stockpiling can play an important role in mitigating supply shocks and reducing exposure to geopolitical pressures. Under the Critical Raw Materials Act and the EU Energy and Raw Materials Platform, the Commission’s mandate is largely limited to monitoring national stock levels, establishing benchmark stock levels, issuing recommendations to Member States and coordinating international cooperation. However, the EU currently lacks a mechanism to manage strategic CRM stockpiles and ensure their coordinated and equitable allocation during supply disruptions. Strategic sectors such as defence and space are particularly exposed to these risks and remain insufficiently prepared for prolonged supply shortages. 

4. Insufficient strategic market intelligence

Although the monitoring framework established under the Critical Raw Materials Act provides valuable information on supply chains, it does not deliver the comprehensive, real-time market intelligence required to support strategic decisions on investments, procurement or stockpiling. While some Member States possess data on their domestic industrial value chains, comparable information covering the entire EU value chain is currently lacking, limiting the Union’s ability to anticipate risks and coordinate an effective response.