Brief

Transatlantic Strategy on Critical Raw Materials

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The production of clean energy technologies is reliant on the supply of certain critical minerals (CMs). Responding to perceived challenges in CM supply chains, including strategic dependence on China, governments around the world are making CM supply chain security a strategic priority.

In the US, the most impactful law concerning CMs is the 2022 Inflation Reduction Act (IRA), which besides being the largest piece of climate change legislation in US history, includes tax incentives designed to foster CM supply chains within the US and through friendly countries. On the EU side, the EU’s 2023 Critical Raw Materials Act (CRMA) creates targets for domestic CM supply and outlines mechanisms for achieving supply chain security.

Although civil society organizations justifiably claim that the priority should be demand reduction rather than increasing extraction, US and CM policy signals that more mining is on the cards. Many of the risks and opportunities associated with this increase will accrue to developing countries in the Global South. US and EU CM policy prioritizes supply chain security at all costs, suggesting a narrative of supply chain security vs. sustainability. However, sustainability is in fact a prerequisite for security, and the industry wide trend is towards mandatory human rights and environmental due diligence.

Transatlantic CM policy contains a true contradiction between value creation in partner countries and the goal of onshoring green value chains. Despite a rhetorical emphasis on mutually beneficial partnerships, the US and EU’s own economic interests are prioritized. This is unsurprising, but in the context of strategic rivalry with China, the EU and US should concentrate on providing a genuinely competitive offer to partner countries.


This article first appeared here: us.boell.org

Product details
Date of Publication
March 2024
Publisher
Heinrich-Böll-Stiftung Washington, DC
Number of Pages
14
Licence
Language of publication
English
Table of contents

Table of Contents

Executive Summary 3

Securing the Supply of Critical Minerals is High on the Policy Agenda 4

The Impact of Critical Mineral Policy in the Global South 7

The Global South shoulders much of the burden for growing demand 7

Security vs sustainability is a false dichotomy 9

Is the Value-Added Partnership More than A Rhetorical Shift? 11

Imprint 14