European Union Critical Raw Materials Act

Overview of the Critical Raw Materials Act

The European Union's Critical Raw Materials Act (CRMA), formally adopted in March 2024, represents a fundamental shift in how Europe approaches raw material security. For decades, the EU relied heavily on global markets and trade relationships to secure the minerals and metals essential to its industrial base. The CRMA replaces this market-dependent approach with a structured regulatory framework that sets binding benchmarks for domestic capacity and supply chain diversification.

The Act establishes four binding benchmarks that EU member states must collectively achieve by 2030. At least 10% of the EU's annual consumption of strategic raw materials must be sourced from domestic extraction. At least 40% must be processed within the EU. A minimum of 25% must come from recycled materials. And no single third country may account for more than 65% of the EU's consumption of any strategic raw material at any stage of the value chain. These targets are ambitious given the EU's current reliance on imports, particularly from China, for many critical materials.

A key innovation of the CRMA is its distinction between "critical raw materials" and "strategic raw materials." Critical raw materials are those with high economic importance and high supply risk, assessed through a quantitative methodology the European Commission has refined over multiple assessment cycles since 2011. Strategic raw materials are a subset deemed essential specifically for the green and digital transitions and for defense and aerospace applications. Strategic materials receive additional policy support, including streamlined permitting, access to strategic project designation, and inclusion in bilateral partnership agreements.

The Act also creates new governance mechanisms, including a European Critical Raw Materials Board composed of member state representatives and Commission officials. This board coordinates implementation, monitors progress toward the 2030 benchmarks, and advises on the periodic review of the materials lists. The CRMA mandates that large companies conduct supply chain audits for strategic raw materials and develop risk mitigation strategies, extending the regulatory framework beyond public policy into corporate governance.

The CRMA builds on more than a decade of assessment work by the European Commission. The first EU critical raw materials list was published in 2011 with 14 materials. Subsequent updates in 2014, 2017, and 2020 progressively expanded the list and refined the underlying methodology. The CRMA codifies this work into binding legislation, giving the lists legal force and linking them directly to policy instruments including permitting reform, trade agreements, and financial incentives.