European Raw Materials Initiative: Challenges and Opportunities

By Ruya Perincek, on 15 November 2013

RMI_symposium 8 NovOn 8 November 2013, the UCL Institute for Sustainable Resources hosted ‘The European Union Raw Materials Initiative: responding to key legal and policy challenges’ Symposium in collaboration with the UCL Faculty of Laws and the UCL European Institute.

Raw materials or non-energy raw materials, for instance Beryllium, Cobalt, Graphite, Magnesium, and Niobium, are of high importance for the European high-tech manufacturing industry and, hence, for about 30 million jobs, economic growth and competitiveness. As the world’s largest trading block and market, the EU is facing a changing global context with new challenges as well as opportunities. Some of the most challenging elements of this new global context include, among others, the risk that tensions between countries escalate into outright conflicts, the diverging price trends in commodity markets, or the USA’s oil and gas boom. Nevertheless, there are also some improvements in the governance of non-energy raw materials thanks to the Extractive Industries Transparency Initiative (EITI), supported by the EU.

From a European perspective, scarcity does not seem to be the major challenge in the context of raw materials. Access and security of supply are among the biggest challenges, as the global demand for metals and minerals has increased with the rise of new emerging economies such as India, China, and Brazil. At the same time, these countries are increasingly exporting less and less minerals and materials as domestic demand grows. These potential exporters have been through a great transformation, which puts them in a similar situation to the EU: China, for example, which is seen as a potential exporter due to its large mineral and metal deposits, has become a net importer of many natural resources. Theoretically, China is therefore as vulnerable as Europe. Take the recent export restrictions of Indonesia or Vietnam – China, importing a great portion of natural resources from its neighboring countries, will be hit by those restrictions. For these resource-rich developing countries, there are several reasons for export restrictions, namely, attempts to raise higher tax revenues, enhance environmental protection or increase food security.

As part of its Raw Materials Initiative, the EU has launched the European Innovation Partnership (EIP), which focuses on new approaches to EU research and innovation for “societal benefits and modernization of key sectors”.  The EIP, which is a tool to drive the Raw Materials Initiative, aims to combine a strong research and innovation dimension with “demand-side” measures. By connecting relevant actors at EU, national and regional levels, the initiative intends to generate positive effects on Europe’s competitiveness, growth and employment in support of “Europe 2020”.

EITI, an international initiative to improve governance and accountability through the publication of company payments and government revenues from oil, gas and mining, is seen as great opportunity for the EU to support the establishment of a multi-stakeholder platform in which new policies on sustainable mining and regional development can be discussed and formulated.

Some major challenging questions for future research were identified during the symposium: firstly, while the EU is shifting to a green economy, environmental pressures caused by resource-intensive mining shifts to the east. The question, therefore, is how to manage this relationship. Secondly, can Europe turn its advantage in environmental technologies and policies into new policy approaches, not only within European affairs but also from an external action point of view? Thirdly, how can the EU create a harmonized or common minerals intelligence system? Gathering secondary data in particular seems to be a major challenge. Finally, uncoordinated efforts, different state aid policies and protectionism lead to certain risks for the EU’s trade regime and internal market. The EU needs a common regulatory framework addressing policy and legal challenges of reducing dependency on raw materials. How can this be achieved? What should such regulatory framework look like? The EU faces several challenges, which need to be addressed by research. The conference, certainly, helped to identify a useful research agenda on raw materials.

Slides will be available from the conference on the UCL website soon.

Ruya Perincek, Doctoral Researcher, UCL ISR