The European Parliament voted to create a dedicated agency for critical raw materials aimed at reducing Europe's dependence on foreign suppliers, especially China. The vote was conducted with 470 votes in favor, 83 against, and 108 abstentions, and refers to the approval of a two billion euro fund titled "Critical Raw Materials Fund."
Importance of Critical Raw Materials
Mohammad Chahim, a Member of the European Parliament from the Socialists and Democrats group, emphasized that "critical raw materials have become a currency of geopolitical power. Those who control them hold the future of our industry, energy transition, and security." These amendments will help accelerate the extraction, processing, recycling, and substitution of critical raw materials in the value chain related to this sector.
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Financial and Export Mechanisms
The two billion euro fund provides income assurance to developers of extraction, processing, and recycling projects and utilizes price stabilization mechanisms. Additionally, parliament representatives want the European Commission to be able to limit the export of permanent magnet waste using an export control clause. These magnets, which depend on rare earth elements such as neodymium and dysprosium, play a crucial role in electric vehicle motors and wind turbines.
The Commission will be responsible for identifying major companies in strategic sectors including batteries, hydrogen equipment, aircraft, drones, satellites, and advanced chips, instead of member states. These companies will be required to map their supply chains and reduce vulnerability to disruptions.
These amendments also refer to linking the security of critical raw materials and Europe's defense capability, calling for funding for strategic raw materials projects from the European defense industry program. This action responds to growing concerns about the risks of concentrating raw material supply in economic and national security contexts.
The original Critical Raw Materials Act was approved in December 2023, creating a general framework for accessing essential raw materials for clean energy, digital, defense, and space transitions. The Commission has proposed amendments to be presented in December 2025, emphasizing the need to accelerate implementation and strengthen Europe's strategic self-sufficiency in the face of global competition.
