European Raw Materials Alliance calls for action to ensure supply of rare earths

October 1, 2021

ERMA investment cases in the rare earth value chain identified so far are located in various European locations (Courtesy ERMA)

The European Raw Materials Alliance (ERMA) has released an action plan to secure access to rare earth elements for European industry. With the input of more than 180 industry stakeholders, ‘Rare Earth Magnets and Motors: A European Call for Action’ was developed to highlight the challenges related to the highly vulnerable global rare earth supply chain, and to provide specific actions that the EU, its member states, industry, and innovation communities should implement.

“The EU has committed to the goal of becoming climate neutral by 2050,” stated Bernd Schäfer, CEO of EIT RawMaterials. “The raw-materials needs to facilitate this energy transition are massive, and Europe urgently needs to secure their supply. This Action Plan outlines the steps we must take to ensure that the rare earth elements upon which the EU Green Deal relies remain available for European industry and society.”

The demand for high energy density rare earth permanent magnets is growing alongside the demand in applications like wind power, electric mobility, and communications technology, making their supply crucial to the European Union’s stated ambition to transition to a green, digital economy. While the EU is a world leader in the manufacturing of electric motors, it is almost fully import dependent for rare earth permanent magnets, more than 90% of which are produced in China.

Thierry Breton, EU Commissioner for Internal Market, explained, “The commission’s in-depth review of critical supply chains and key technologies has highlighted the EU’s high level of foreign dependency on inputs required for our green and digital transition and our continent’s resilience. The EU depends on others – mainly China – for the import of permanent magnets, as well as the rare earth elements they are made of. The European Raw Materials Alliance plays a key role in addressing these dependencies.”

The plan contains twelve actions, summarised in four key recommendations:

  • European policymakers will need to create a level playing field, since the cost of EU production is intrinsically higher than the Chinese production cost, which is massively lowered by a set of direct and indirect state subsidies
  • European OEMs will need to consider potential commitments to buying a significant percentage share of rare earth materials from European producers
  • The EU will need to ensure that end-of-life products and waste materials containing rare earths stay in Europe, facilitating reprocessing and recycling
  • There is a unique opportunity to trigger large private investments in the emerging European rare earths value chain by match funding – for this reason, the EU and its member states should pull all financial levers including state aid, such as a dedicated Important Project of Common European Interest (IPCEI)

The ERMA is currently working on a second Action Plan covering materials for energy storage and conversion, such as batteries, fuel cells, solar and hydrogen and other alternative energy storage and conversion systems.

Rare Earth Magnets and Motors: A European Call for Action‘ is currently available in full from ERMA’s websites.

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