Over the past century, European demand of raw materials has increased substantially, and will continue to increase in the years to come (see Figure 1). The variety of materials extracted has also increased, largely due to technological development (e.g. low-carbon energies and ICT). As Europe relies on imports for many raw materials (see Figures), resource security has become a main policy concern. A group of “Critical Raw Materials” with relatively high supply risk and economic importance for the EU has been identified.
Figure 1: Forecast average demand growth to 2020 for critical raw materials (% per year) (Source: DG GROWTH Report on Critical raw Materials for the EU, adapted from Roskill Information Services )
Figure 2: EU supply of non-critical and critical raw materials (source: DG GROWTH Report on Critical raw Materials for the EU)
The Raw Material Initiative (COM (2008)699) first highlighted the importance of ensuring an undistorted and reliable access to raw materials for the proper functioning of the EU economy. Within the Europe 2020 strategy (COM (2010)2020), resource security is mentioned as a main objective in the Flagship Initiatives “Resource Efficient Europe” (COM(2011)21) and “An Integrated Industrial Policy for Globalization” (COM(2010)614).
The first criticality analysis for raw materials was published in 2010 by the Ad-Hoc Working Group on Defining Critical Raw Materials, established by DG GROWTH: 14 critical raw materials were identified from a candidate list of 41 non-energy, non-food materials.In the 2011 Communication on raw materials (COM (2011)25), the Commission formally adopted this list and stated that it would continue to monitor the issue of critical raw materials in order to identify priority actions. It also committed to undertake a regular review and update of this list at least every three years.
The current review of the list of CRM (lead by DG GROWTH) has used the same methodology, indicators and thresholds as the original 2010 criticality assessment at EU level, but with updated data and a wider range of materials. In the 2014 assessment, 54 non-energy, non-agricultural raw materials were analysed (compared to 41 in the 2010 assessment) considering two components (see Figure 2):
- Economic importance, based on use of each material per a defined mega-sector weighted by the value added of the sector that uses this materials as production input
- Supply risk, which encompassed four sub-components:
(a) level of concentration of worldwide production of raw materials, using the Herfindahl-Hirschman Index (HHI) which accounts for market competitiveness;
(b) political and economic stability of the producing countries, using the World Bank’s Worldwide Governance Indicator (WGI) which considers the following aspects of governance: voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, control of corruption;
(c) potential of substitution of the raw materials, based on a substitutability index estimated using expert opinion and aggregating the substitutability for the different uses;
(d) recycling rate, considering the shares of EU consumption of raw materials addressed through secondary materials.
The resulting list of CRM includes 20 materials: Antimony, Beryllium, Borates, Chromium, Cobalt, Coking coal, Fluorspar, Gallium, Germanium, Indium, Magnesite, Magnesium, Natural Graphite, Niobium, PGMs, Phosphate Rock, REEs (Heavy) & REEs (Light), Silicon Metal, Tungsten.