A few weeks ago, I had the opportunity to attend an exciting presentation organized by the Basque Group of the Spanish chapter of the Club of Rome, in which Alicia Valero, director of the Industrial Ecology research group at the CIRCE Institute and full professor at the University of Zaragoza, participated. She clearly exposed the paradox of the energy transition towards decarbonization during her presentation.
The paradox is that the most energy-efficient technologies are the least sustainable from a material point of view. Indeed, the technological changes brought about by decarbonization require a greater diversity of raw materials than traditional energy sources, posing significant challenges for the supply of mineral raw materials.
This is all the more true as less than 5 % of the world's critical raw materials are sourced or produced in the EU. Nevertheless, our industry accounts for around 20 % of the world's consumption of these raw materials.
In response to this vulnerability, the European Commission launched a Critical Raw Materials Action Plan to boost mining and thus increase resilience and autonomy. To reinforce the EU's strategic autonomy, in March 2022, the Strategic Compass for EU Security and Defense was approved, setting out an ambitious action plan to strengthen the EU's security and defence policy to 2030 and to secure necessary materials supply chains, energy sovereignty and technological independence from potential competitors.
In March 2023, the proposal for a Regulation for developing a framework to ensure a secure and sustainable supply of critical raw materials was presented, through which the European Critical Raw Materials Act is materialized. This Act contains the necessary elements for the EU to significantly increase and diversify its supply of critical raw materials, support research and innovation and strengthen circularity within the 2020 European Action Plan for the Circular Economy framework.
The proposal establishes the objectives of improving the functioning of the internal market through a framework that guarantees access to a secure and sustainable supply of critical raw materials. Along these lines, it proposes strengthening the different links in the raw materials value chain. To this end, it establishes that the EU should produce at least 10% of the minerals or concentrates it consumes from the raw materials it defines as strategic. It also states that processing capacity should cover at least 40 % of annual consumption and, finally, that recycling capacity should amount to at least 15 % of the consumption of strategic raw materials.
Other objectives refer to the diversification of origins so that by 2030 any supplier may procure more than 65 % of the needs of a strategic raw material at the Community level. It also considers the need to improve the capacity to monitor and mitigate the risk associated with critical raw materials.
The Act is expected to be accompanied by new legislative measures such as: (i) the revision of the End-of-Life Vehicles Directive, (ii) the Commission Recommendation on waste electrical and electronic equipment, (iii) the Waste Framework Directive, (iv) a strategy for the recovery of critical raw materials and a national critical raw materials recycling platform by 2025 and each Member State, (v) the revision of extended producer responsibility schemes, in particular for critical raw materials (e.g., collection and recycling target for critical raw materials) and (vi) an amendment to the Extractive Industries Waste Directive.
Equally vulnerable are the USA, which regularly assesses the criticality of raw materials. It is considering developing its own end-to-end clean energy supply, although this does not mean it will ban products and mineral supplies from China. Energy Secretary Jennifer Granholm stressed the importance of US manufacturing for an emerging industry that includes electric cars, batteries and solar panels. The goal is to create jobs at home while reducing dependence on China.
As a result, a secure and reliable supply of critical raw materials is vital for the industry, especially in sectors such as automotive, steel and healthcare, which generate millions of jobs. In this context, we recently participated in the presentation of the book "Mineral raw materials in the energy transition and Digitalization. The Role of Mining and Metallurgy" (Spanish version).
The book examines the supply chain from its origin in mining research. It analyzes mining, with its various methods and systems of exploitation, as well as the preparation and concentration of ores, to reach the metallurgical processes of metal extraction to manufacture components and equipment necessary for the double transition. The supply chain is also presented, and the economic and industrial aspects are discussed in depth in the context of the circular economy and sustainability. A chapter is also devoted to Spain's situation and possibilities.
Achieving resilient mineral raw material supply chains is a challenge in itself in the transition process towards decarbonization, driven by the climate emergency, which is also subject to geopolitical risks and, as well as risks for the local population when the necessary labour and environmental safeguards do not accompany mineral extraction.
Macarena Larrea, Researcher at Orkestra, holds a Ph.D. in Business Fostering and Development from the University of the Basque Country, she wrote her thesis on the “Internalization of the External Costs of Electricity Production”.