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The European Commission formally unveiled its longawaited Key Raw Materials bill, which is seen as another step towards ensuring economic security in the face of struggling energy demand.

Recently, the European Commission officially issued the "Key Raw Materials Act" which has been in the pipeline for a long time, emphasizing that key raw materials are an indispensable part of net zero industrial production, digital industry and other industries. The bill is seen as another measure to stabilize economic security in the wake of the energy crisis. It not only explains the need to diversify the sources of local production, recycling and import of key raw materials, but also establishes "strategic" raw material details for green and digital industries.

In the industry, the Commission's move is likely to have a negative impact on the current supply chain management of the world's heavy and chemical industries. However, because the bill is at the beginning of the legislative process, EU countries and parliaments have not reached an agreement on the matter, and it is unclear how it will be implemented.

Make green raw materials "strategic"

In a statement issued by the European Commission, the European Commission stressed that the demand for key raw materials is on the rise globally, but on the other hand, Europe is highly dependent on external imports, in order to reduce supply chain risks, the issue of the Key Raw Materials Act will help Europe to achieve the overall objectives of climate and business strategic transformation.

According to this Act, the European Union countries will help the European Union countries as the overall market power, and at the same time, the cooperation between the member States of the European Union countries will be improved, and the potential risks of the industrial chain will be detected together. In addition, EU countries will harmonize the stock of key raw materials of member States, call on EU member states to purchase key raw materials, and negotiate with international businesses according to the requirements of customers from all over the world, taking EU countries as the overall market.

In terms of specific measures, the European Commission not only upgraded the list of key raw materials, but also confirmed a list of strategic raw materials for the development of renewable resources and corporate strategic transformation. The EU countries shall not import more than 65% of strategic raw materials from a single third country, and the EU countries' local production shall meet the requirements of 10% of the annual consumer market.

It is worth mentioning that the European Commission further clarified the need to improve the level of strategic raw material recycling. Taking permanent magnet materials as an example, EU countries emphasize in the document that many permanent magnet materials such as nickel, cobalt and boron are used in new energy electric vehicles, centrifugal fans diesel generators, heat pump units, industrial manipulators and other industries, which will first promote the recycling of this raw material.

In addition, the bill says it will strengthen the absorption and application of pioneering technologies in key raw material industries, and simplify the application process for strategic raw material development programs in EU countries to increase local supply.

To ensure smooth local supply chain management

According to statistics, the EU countries published the "Key Raw Materials Act" is a part of the package of legislation recently put online by the EU countries. In the third week of March, the European Commission successively released two key proposals, the Net Zero Industrial Production Act and the electricity market reform plan of EU countries.

In the view of the current president of the European Commission, von der Leyen, the introduction of the Key Raw Materials Act is conducive to the EU countries to achieve a clear overall target of climate, and will significantly improve the level of refining, processing and recycling of key raw materials in the EU countries. For major energy structure transformation industries such as wind power generation, hydrogen energy storage technology and power lithium batteries, key raw materials are an important part of the whole industrial chain of production and processing. Therefore, the EU countries hope to increase the local production capacity of key raw materials in a sustainable way, and also to ensure that the supply of raw materials in Europe has a richer source.

Mark Ladisl, head of the Energy Center of the Marc Delors Research Institute in Europe, said in an interview with the media that the implementation of the Key Raw Materials Act will further promote European integration, especially in accordance with the EU countries' procurement of key raw materials measures to increase the market share of EU countries.

In a new statement, the European Automotive Battery Manufacturers Association also praised the package of legislation published by the European Commission, saying it showed that Europe's plan to clean up its hightech industry was progressing in an orderly way, providing the necessary clarity to investors and property developers in the value of green energy customers.

The new energy technology industry reaction is mixed

European Union countries introduced a series of laws to cause a high level of concern in the sales market, European wind power, coal and other clean up environmental industry organizations have expressed views on this matter. Overall, while the European industry has largely welcomed the commission's moves, there are doubts about implementation.

WindEurope, the European wind energy association, issued a statement calling the bill "a cowardly step in the direction of progress". The agency believes that the difficulties facing wind power companies in EU countries go far beyond the supply of raw materials, and there are many difficulties such as audit and cost.

WindEuropeCEO Giles Dixon indicated that at the present stage, the EU countries will increase the installed wind power capacity by 360 billion kW per year, but the overall production capacity of the European wind power industry is significantly insufficient. The act of the EU countries to go online this time is likely to help improve the sustainability and elasticity of the renewable resources industry chain, but also optimize the relevant provisions. Ensure full implementation. It is worth mentioning, the agency also pointed out that in addition to the EU's strategic raw material breakdown, in Europe, the glass fiber used in wind turbine impeller is also highly dependent on foreign imports, therefore, EU countries should further expand the scope of key raw materials.

The French machinery industry body VDM also stressed in a new announcement that metals such as aluminium and zinc, which are widely used in green machinery and equipment, are not included in the list of key raw materials, and EU countries should take this into account. In addition, EU countries need rapid approval process and potential energy demand in the metal mineral development and design industry to ensure the smooth production and manufacturing of local metal minerals.

"Europe is running out of mines," says Opan Harlins, chief executive of Aurubis, a big European copper producer. "EU countries need to act quickly to ensure that new coal projects are effectively approved so that new resources can be unlocked over the next few years."