EU’s promising critical raw materials plans risk being undermined by lack of commitment 

While the high-road approach of the CRMA factors in the social and environmental conditions in which raw materials are extracted and processed, for this strategy to be viable the EU must follow through and secure meaningful trade agreements with partner-countries that embed these considerations, write Claes Mikael Stahl and Judith Kirton-Darling.

Claes Mikael Stahl is the Deputy General Secretary of the European Trade Union Conferedation (ETUC). Judith Kirton-Darling is General Secretary of IndustriAll Europe.

As part of the Green Deal Industrial Plan, in March 2023 the European Commission published the Critical Raw Materials Act (CRMA). Trade unions have long been calling for a stronger EU strategy on achieving greater raw materials independence through the sustainable exploitation of the bloc’s own resources, as well as security of supply through a fair external agenda.  

The sustainability of raw materials is essential for Europe to strengthen its strategic autonomy. This requires a strong and global strategy resting on four pillars: sustainable domestic extraction; circular economy; improving research and innovation to reduce demand and dependency; and ensuring international standards and binding human rights.   

The social and environmental criteria are essential to allow social acceptance of new raw material extraction and processing sites.  

The CRMA consists of a set of internal and external actions to ensure a secure and sustainable supply of critical raw materials for EU industry.

While the intra-EU dimension has rightly attracted much of the attention (with 70 potential mining projects vying for the coveted ‘strategic’ status and the support that follows), the international part of this plan needs greater scrutiny, as the Letta report on the single market points out – though providing the wrong recipe.   

The external dimension of the Green Deal Industrial Plan was launched in February 2023 in response to the Biden administration’s industrial policy and China’s 5-year plan, but has its roots in a broader geopolitical shift.   

Through their trade and investment policies, China and the US have been actively courting resource-rich countries around the world. For a decade, China’s $1 trillion Belt and Road Initiative loans have effectively underpinned its dominance in critical raw material extraction, with refining and processing largely undertaken back at home. This dominance has allowed a manipulation of prices for critical materials that has undermined competitor domestic extraction projects, and the supply chains for green tech that they underpin.  

For its part, the US government is pump-priming investment firms like Ireland-based TechMet with equity to try to counter China’s cash-rich offers to critical minerals and metals companies around the world. US trade policy has played a role through the inclusion of conditionalities, in the Inflation Reduction Act, on the origin of critical raw materials – notably in batteries – which created an incentive for strategic partnerships with third countries.   

Furthermore, international development cooperation has addressed the working conditions of artisanal miners in countries such as the Democratic Republic of Congo.  

Similarly, within the CRMA – and in line with the EU 2022 trade policy review, which highlights the need to tie trade agreements with sustainability and sustainable development objectives - the EU sets out clear social and environmental conditionalities for strategic partnerships and projects with third countries outside Europe.   

The Global Gateway is one of the EU’s investment vehicles of choice for such projects – which would lead to EU investment and industrial support. Through this instrument, which aims to mobilise €300bn over 2021 to 2027, the bloc has established strategic partnerships with a swathe of mineral-rich countries to develop critical raw materials value chains and boost transport connectivity. Further negotiations are underway with Greenland and Australia.   

Along similar lines, the joint approach taken at the beginning of April by the EU and US to launch a Minerals Security Partnership with fourteen partner countries is to be welcomed – one of its three priorities being to foster the application of high environmental, social and governance standards.   

Conversely, to see the proposed US-EU critical minerals agreement (CMA) fall at the last hurdle due to EU opposition to ensuring that these ESG standards are enforceable was a cause of dismay.

The US has pressed for a ‘rapid response mechanism’ similar to that found in the United States-Mexico-Canada (USMA) trade deal. This would ensure that critical raw materials sourced from third countries could be subject to investigations and sanctions in the case of breach of labour or environmental standards in the agreement.   

The USMCA mechanism has been effectively used to ensure labour rights in specific workplaces in Mexico. Its inclusion in a US-EU critical minerals agreement would send a strong signal that values aren’t just for the policy papers but a reality in the extraction, refining and processing of raw materials, reassuring communities worried about their local environment and exploitation.  

Why is the European Commission undermining stated EU policy goals on sustainable critical raw materials and hurting export opportunities?  

The EU’s opposition to enforceable ESG standards suggests a cynical lip service to the social and environmental criteria which have been lauded in the CRMA – confirming the scepticism of those who challenge the social license to operate new extraction.   

Furthermore, it will also have direct economic consequences for European manufacturing and industrial workers, as an agreement would have eased access, for European electric vehicles, to the US market.   

In this scramble for resources, it is essential that the critical social and environmental conditions included in the new legislation are not ignored in the mercantile rush for resources.   

Rather, these conditionalities, if developed in conjunction with international partners, will reinforce European strategic autonomy and industrial competitiveness. This is a political choice. As trade unions representing European workers, we want the EU to make the right choice.