The Critical Raw Materials Act – Europe’s Action to Secure Access to Critical Raw Materials

The European Union has adopted a new regulation establishing a framework to ensure a secure and sustainable supply of critical raw materials, better known as the European Critical Raw Materials Act (CRMA). The new regulation aims to bolster the EU’s critical raw materials supply, strengthen circularity, and support research and innovation – not to mention promote the green transition in which the raw materials play an essential role. 

Promoters of and companies engaged in critical raw material projects should pay special attention to the new regulation. After entering into force on 23 May 2024, the CRMA provides an avenue to expedite permitting procedures by streamlining processes for projects capable of contributing meaningfully to the EU critical raw materials supply.

In order to reach its noble targets and ambitious benchmarks, the CRMA introduces a new regulatory framework known as the Strategic Projects framework. Through a specific application process, the Commission will be recognising certain raw material projects intended to start or expand the extraction, processing or recycling of strategic raw materials or the production of materials that can substitute strategic raw materials as Strategic Projects. These selected projects will enjoy benefits that resemble those previously granted to green transition investments in many ways.

The recognition process starts by the project promoter submitting a recognition application to the European Commission, which may then, after taking into account the opinions of a relevant Member State and the newly established critical raw materials board, grant the project Strategic Project status. The status can be awarded to projects within the EU and, under certain conditions, to projects in third countries.

The recognition criteria and application process are further defined in the CRMA, but in short, the following criteria must be met:

After recognition, Strategic Projects enjoy many benefits, including easier access to financing and fixed time limits for permit-granting processes – 27 months for extraction projects and 15 months for processing and recycling projects. The time limits apply to a process that covers all relevant permits and encompasses all applications and procedures with the exception of planning, administrative appeal procedures, and the preparation of an EIA report.

Moreover, the CRMA requires Member States to ensure that Strategic Projects receive urgent processing in all judicial and dispute resolution procedures relating to the projects, provided that national law provides for such urgency procedures. This means that Strategic Projects will not only benefit from faster administrative procedures but also from expedited judicial procedures. However, it remains uncertain whether and when Finland will be enacting specific regulations to further support the urgent processing of Strategic Projects.

The first call for applications for Strategic Projects was issued on 23 May 2024 with the first cutoff date being on 22 August 2024. It is anticipated that the first wave of applications could be granted Strategic Project status as early as December 2024.

Strategic Projects will also be considered as projects of overriding public interest. This means that there is no need for Strategic Projects to undergo a separate assessment of public interest in relation to environmental derogation processes stipulated in the Habitats (92/43/EC), Water (2000/60/EC), and Birds (2009/147/EC) Directives and in the upcoming nature restoration regulation. Essentially, even if these projects have negative impacts on the environment, they may still be allowed, provided that they fulfil the other conditions stipulated in these regulations. This regulation could potentially accelerate the permitting procedures significantly.

If you have any questions about this Legal Alert, please feel free to contact the undersigned or your regular Borenius contact.