The European Raw Materials Alliance (ERMA) has released an action plan to secure access to rare earth elements (REEs) for European industry.
ERMA was launched by the European Commission in September 2020 as part of an action plan on critical raw materials. The organisation brings together over 500 partners including industry, governmental organisations, NGOs, trades unions and universities.
The new action plan, called ‘Rare Earth Magnets and Motors: A European Call for Action', outlines current and projected European demand for REEs along with some steps that should be taken to secure their supply.
Bernd Schäfer, CEO of EIT RawMaterials, the innovation community that manages ERMA, said: "The EU has committed to the goal of becoming climate neutral by 2050. The raw materials needs to facilitate this energy transition are massive, and Europe urgently needs to secure their supply. This action plan outlines the steps we must take to ensure that the rare earth elements upon which the EU Green Deal relies remain available for European industry and society."
ERMA noted that the demand for high energy density rare earth permanent magnets is increasing exponentially. They are vital for applications like wind power, electric mobility and communications technology, which makes their supply crucial to the stated ambition of the European Union (EU) to transition to a green, digital economy.
For example, 95% of electric vehicles use rare earth magnets containing traction motors. More than 100,000t of rare earth magnets are consumed each year in renewable energy, machine tools, robotics, water pumps, loudspeakers, mobility and information and communications technology (ICT).
While the EU is a world leader in the manufacturing of electric motors, it depends almost fully on imports of rare earth permanent magnets, more than 90% of which are produced in China. 16,000t of rare earth permanent magnets are exported from China to Europe each year.
There is currently less than 1% recovery of rare earth permanent magnet scrap in Europe, which ERMA said represents a large potential resource at a low carbon footprint.
Thierry Breton, EU Commissioner for internal market, said in the report: "The commission's in-depth review of critical supply chains and key technologies has highlighted the EU's high level of foreign dependency on inputs required for our green and digital transition and our continent's resilience. The EU depends on others - mainly China - for the import of permanent magnets, as well as the rare earth elements they are made of. The European Raw Materials Alliance plays a key role in addressing these dependencies."
ERMA plans to address the main challenges connected to raw materials supply for Europe in thematic clusters. The first of these is the ERMA cluster on rare earth magnets and motors.
ERMA developed the action plan with the input of more than 180 industry stakeholders to highlight the challenges related to the highly vulnerable global rare earth supply chain and to provide specific actions that the EU, its member states, industry and innovation communities should implement with the aim of triggering a disruptive change to diversify EU supply chains.
The action plan contains 12 actions that are summarised in four key recommendations:
- European policymakers will need to create a level playing field, since the cost of EU production is intrinsically higher than the Chinese production cost, which is massively lowered by a set of direct and indirect state subsidies;
- European original equipment providers (OEMs), in this case the producers of components that use REEs, will need to consider potential commitments to buying a significant percentage share of rare earth materials from European producers;
- The EU will need to ensure that end-of-life products and waste materials containing rare earths stay in Europe, facilitating their reprocessing and recycling; and
- There is a unique opportunity to trigger large private investments in the emerging European rare earths value chain by match funding. For this reason, the EU and its member states should pull all financial levers including state aid, such as a dedicated important project of common European interest (IPCEI).
ERMA is currently working on a second action plan that will cover materials for energy storage and conversion, including batteries, fuel cells, solar and hydrogen and other alternative energy storage and conversion systems.