The European Union must use upcoming legislation to speed up permitting and encourage investment in projects such as rare earths needed to meet targets for cutting carbon emissions, the head of an EU-linked critical materials agency said on Monday.
Chief Executive Bernd Schaefer of EU-funded EIT Raw Materials said Europe could struggle to compete not just with China but also with the United States, where the Biden administration’s Inflation Reduction Act (IRA) is providing subsidies to spur investment.
“We all know Europe isn’t as agile and quick when it comes to decision-making. The Americans take the fast track and the super fast track has been taken by the Chinese,” he said in an interview.
EIT is implementing an EU plan to provide the critical raw materials needed to meet the bloc’s target of moving to net zero greenhouse gas emissions by 2050.
The EU is expected to publish its Critical Raw Materials Act in the first quarter of this year to try to secure critical raw materials, including lithium, cobalt, manganese and rare earths, needed for electric vehicles (EVs) and wind turbines.
Both the EU and United States are seeking to curb their dependence on China, which supplies about 95% of the EU’s rare earths.
Fast-track permitting should be allowed for projects regarded as having strategic importance to the bloc, while still keeping high environmental, social and governance (ESG) standards, Schaefer said.
“In China you get a permit for a mine in three months as opposed to 15-to-17 years in Europe.”
The proposed EU law should also create a state-supported agency to act as a clearing house to match demand from industry with supplies from mining and processing companies, Schaefer said.
Large amounts of funding will be needed to lure investment, especially considering that the U.S. IRA is offering $369 billion worth of tax subsidies.
“We certainly have to build a counterweight to balance this otherwise all the remaining investment into the European continent will be dissipating,” Schaefer said.
As a start, EIT proposes an investment fund to help finance projects worth up to 100 million euros ($109 million), plus 3 billion euros in grants for sustainable mining projects and an additional 2 billion euros to boost research and innovation capacity. (Reuters)
($1 = 0.9180 euros)