MINEX Forum

Tag: European Commission

  • EU Commission President Visits Greenland Amid Rising Strategic Importance

    EU Commission President Visits Greenland Amid Rising Strategic Importance

    Ursula von der Leyen, President of the European Commission, is embarking on a significant journey to Greenland, reflecting the escalating significance of the region due to factors like melting Arctic ice, the demand for green-technology raw materials, and growing competition from China. Despite not being a part of the EU, Greenland holds substantial interest for Brussels, particularly for its abundance of raw materials, believed to encompass 25 out of the 34 materials deemed essential by the EU.

    Von der Leyen’s visit, alongside Danish Prime Minister Mette Frederiksen, entails stops in the Faroe Islands before heading to Greenland to inaugurate a new EU Commission office in Nuuk. This diplomatic excursion aligns with Von der Leyen’s reelection aspirations and follows calls for accelerated green efforts within the EU after recent elections, as highlighted by the EU’s climate chief, Wopke Hoekstra.

    Tomas Baert, Von der Leyen’s special adviser on trade and international partnerships, emphasized Greenland’s significance in providing critical raw materials essential for the EU’s green transition. He underscored the need for partnerships to harness Greenland’s vast potential, acknowledging the geopolitical implications of China’s extraction-focused approach in contrast to the EU’s collaborative model.

    The establishment of the EU Commission office in Greenland underscores the EU’s commitment to bilateral cooperation, as articulated by Naaja H Nathanielsen, Greenland’s minister for business, trade, and raw materials. Nathanielsen highlighted the mutual benefits of cooperation, emphasizing Greenland’s need for external support to develop its mineral sector, crucial for economic diversification alongside traditional sectors like fishing.

    Amidst this geopolitical backdrop, the visit also coincides with critical developments in Denmark’s relationship with Greenland, amidst a growing independence movement and concerns over historical violations, including the forced sterilization of women and girls. While addressing these sensitive issues remains unresolved, the trip underscores the complex dynamics shaping the region’s future.

  • Cyprus echoes mining industry shift, Venus Minerals chairman says

    Cyprus echoes mining industry shift, Venus Minerals chairman says

    Among the discussions surrounding the Act’s pivotal role, the event emphasised its implications for Eastern and South-Eastern Europe’s sustainable development and security.

    Key stakeholders, including major raw materials producers from Greece and Regional Innovation Scheme (RIS) countries, deliberated on the EU’s investment potential in raw materials industries and the critical objective of decarbonization.

    At the heart of these discussions lies the Critical Raw Materials Act, a legislative initiative designed to address strategic dependencies on vital raw materials.

    Having secured passage in the European Parliament in September 2023, the Act is currently under negotiation between the Parliament, member states, and the European Commission.

    The Act seeks to fortify the entire value chain of critical raw materials within Europe, diversify imports to reduce strategic dependencies, enhance the EU’s ability to monitor and mitigate risks of supply disruptions, and promote circularity and sustainability.

    Moreover, it also sets targets to boost domestic capacity for mineral extraction, processing, and recycling.

    Mark Rachovides, Chairman of Venus Minerals, representing Euromines, the voice of the European metals and minerals mining industry, highlighted the Act’s significance and the path toward its adoption by member states.

    Rachovides expressed optimism about forthcoming discussions shaping the planning and regulation of mining activities, the recognition of by-products’ strategic importance, and the Act’s integration into broader EU legislation.

    He stressed the potential for regulatory shifts to influence behaviour, advocating for essential trade-offs in the EU’s transition to a greener economy.

    “There’s a notable change in perspective, with a growing political momentum favouring mining, and downstream users acknowledging the value of an EU-based mining industry,” Rachovides noted.

    This shift in perspective is echoed in Cyprus, where Venus Minerals eyes the development of local resources, aiming to position the island as a primary supplier of raw materials to the EU.

  • EU carbon price to hit €400 mark with 90% climate goal: analysts

    EU carbon price to hit €400 mark with 90% climate goal: analysts

    In a display of strong commitment to ambitious climate policies, the European Union’s new climate commissioner, Wopke Hoekstra, has affirmed his support for a 90% reduction in net greenhouse gas emissions by 2040. This declaration, made during a Parliament hearing earlier this week, has garnered backing from the Parliament’s environment committee and has led to Hoekstra’s formal confirmation in his new role.

    The 2040 target for greenhouse gas reductions will have a significant impact on the supply of CO2 allowances in the EU’s emissions trading scheme, which imposes limits on carbon emissions from large industrial emitters. Financial analysts predict that a 90% reduction target for 2040 will push EU carbon prices above €400 by that time, according to researchers at the London Stock Exchange Group (LSGE).

    Currently, carbon prices on the EU ETS stand at €81 per tonne, reaching a peak of €100/t in February of this year. LSGE’s analysis suggests that with the current 2030 decarbonisation target of -55%, the EU’s carbon price is expected to rise to €160/t by the end of the decade. However, if the 90% decarbonisation target is met, the carbon price could soar to €400/t by 2040.

    Paula VanLaningham, the director of LSEG Carbon Research, emphasizes that the €400/t price is not the cost of decarbonisation itself, but rather the potential cost faced by businesses that fail to decarbonize under the 90% scenario. Achieving the 90% target would result in near full-decarbonization across various industries, such as power, manufacturing, transportation, and construction.

    The European Commission is set to present its 2040 climate target plan in early 2024. This proposal will undergo scrutiny and approval by EU member states and the European Parliament. Hoekstra assures that the Commission’s 2040 plan will be informed by the recommendations of the European Scientific Advisory Board on Climate Change, which supports a 90-95% target range. Hoekstra pledges to act in line with the Board’s advice and utilize all available instruments to facilitate the EU’s achievement of the minimum recommended target of 90% net reductions.

    Maroš Šefčovič, the Slovak EU commissioner overseeing the coordination of Europe’s green policies, also backs the 90% target, emphasizing that it will provide clarity and predictability to economic actors and citizens. While the responses from Hoekstra and Šefčovič are not binding decisions, they indicate a clear direction from the commissioners on this issue. The European Union’s carbon market underwent significant reforms this year to align with the EU’s decarbonization objectives for 2030.

  • Explained: The EU’s handicap in the global race for critical raw materials

    Explained: The EU’s handicap in the global race for critical raw materials

    The EU is highly dependent on third countries for the raw materials needed to engineer its energy transition and digital transformation.

    Russia’s war in Ukraine and the need to wean itself off fossil fuels in order to reach climate targets have prompted the EU to accelerate its green transition in recent months but also forced it to acknowledge its dependencies over access to critical raw materials.

    In the global race for raw materials, the EU faces multiple challenges.

    The first one is China, which recently started restricting exports of gallium and germanium, two metals essential for the production of semiconductors, in response to Western curbs on Beijing’s access to micro-processing technology.

    The EU considers both materials of high strategic importance. As well as semiconductors and other electronic devices, they are used for military applications such as missile defence and radar systems.

    Beijing’s restrictions come as a stark warning as the EU attempts to diversify and boost domestic supply of raw materials to reduce dependency on third countries.

    Reliance on ‘low-governance’ countries

    But diversifying supply chains could mean the EU has to source these materials from countries that don’t adhere to the same standards.

    Recent data suggests the EU’s supply is highly dependent on countries that have a low governance level, based on indicators including political stability, rule of law and corruption control.

    The EU’s Critical Raw Materials Act (CRMA), adopted in March this year, stipulates that EU strategic projects to scale up supply must be assessed taking into account all aspects of sustainability, including environmental protection, socially responsible practices and respect for human rights such as the rights of women.

    But many countries feeding EU supply are not aligned with European values. This raises concerns about the impact on the local communities where materials are mined, as well as the potential exploitation of natural resources.

    For example, the Democratic Republic of Congo, whose governance indicators are among the lowest in the world, supplies 63% of the EU’s cobalt, which is essential for manufacturing batteries for electrical vehicles.

    Diversifying supply a challenge

    The EU is also highly dependent on single countries for key materials such as Magnesium (China, 97%), Lithium (Chile, 97%), Iridium (South Africa, 93%) and Niobium (Brazil, 92%). These dependencies make supply chains vulnerable.

    The Critical Raw Materials Act aims to ensure no third country provides more than 65% of the Union’s annual consumption of any raw material.

    But diversifying supply is complex when refineries of many essential materials are monopolised by one or more global powers. China dominates the refining market for many critical raw materials.

    Russia’s invasion of Ukraine and the ensuing energy crisis has shown the acute dangers of over-reliance for supplies of raw materials. China’s increasingly antagonistic stance and the political instability in many African countries have also served as reminders of the fragility of the EU’s trading relationships.

    A spiralling global demand

    The demand for raw materials is growing steeply, as developed countries race to digitalise and decarbonise their economies. This can only happen with sufficient supply of raw materials, meaning countries must scale up extracting, refining and recycling operations.

    The global demand for lithium, for example, is set to increase a staggering 89-fold by 2050, according to the European Commission. Demand for gallium will multiply 17-fold during the same time.

    The Critical Raw Materials Act sets targets for the Union to extract 10%, process 40% and recycle 15% of its annual consumption of raw materials by 2030.

    To meet these targets and compete on the global stage, European Commission President Ursula von der Leyen has said the EU needs to speed up investments in research and development, recognising that the bloc’s global share of R&D expenditure has fallen 10% in the last 20 years.

  • State aid: Commission approves amendments to Polish scheme to support closure of coal mines

    State aid: Commission approves amendments to Polish scheme to support closure of coal mines

    The scheme was originally approved by the European Commission in November 2016 (SA.41161), after which amendments were approved in February 2018 (SA.46891) and in July 2019 (SA.52832), and is due to expire by the end of 2023. Since 2019, the aim of the scheme has been limited to cover only the exceptional social and environmental costs resulting from the closure of uncompetitive coal mines that ceased operations by the end of 2018, such as the costs of social welfare benefits or early retirement, or costs incurred in safety or in site decommissioning and rehabilitation.

    The amendments to this scheme that were approved today include

    • its prolongation until the end of 2027
    • a budget increase by €1 billion (PLN 5 billion) to cover exceptional costs, bringing the overall budget to €3.7 billion (PLN 17 billion)
    • the inclusion of two additional mines that ceased coal production in 2020 (Ruch Jastrzębie III) and 2021 (Ruch Pokój II)

    The Commission assessed the amended scheme under EU State aid rules, and in particular Council Decision 2010/787/EU on State aid to facilitate the closure of uncompetitive coal mines. The Commission found that the amended scheme continues to be necessary and appropriate to support the closure process of mines that ceased operations, by (i) providing financial support to workers who have lost, or will lose, their jobs due to the closure of the mines, and (ii) helping to secure mine shafts and decommission mine infrastructure, repair damage to the environment caused by mining and re-cultivate land after the mine closures. Furthermore, the Commission found that the aid amounts do not exceed the exceptional social and environmental costs incurred. On this basis, the Commission approved the amended Polish scheme under EU State aid rules.

    The non-confidential version of the decision will be made available under case number SA.100533 in the State Aid Register on the Commission’s competition website once any confidentiality issues have been resolved.