EU use of Critical Raw Materials – how to make sure it's fair for people and forests

Today, the European Commission updated its list of the Critical Raw Materials (CRM) it needs to power the green and digital transitions, and issued a legislative proposal and a Communication for how it will source them.

There are huge concerns about what this means for European nature and communities since the  legislative proposal weakens core environmental legislation with the aim of making it easier to tap into domestic reserves.

There are also concerns about the impacts it will have on forests, biodiversity and human rights in third countries as the Communication proposes measures to support the diversification of supply chains through Strategic Partnerships and maximise the contribution of EU trade agreements.

For example, the EU is currently negotiating a trade agreement with Indonesia, which holds a significant reserve of nickel, a mineral that has been added to the EU’s CRM list. Yet the Indonesian island of Sulawesi has already seen almost 550,000 hectares (roughly 3.5 times the size of London) of rainforest destroyed since 2011 in its Central and Southeast provinces because of nickel.

Mining is also intensifying in other tropical forested countries.

Scientists found that 80 per cent of forest loss due to industrial mining between 2000 and 2019 occurred in only four countries: Indonesia, Brazil, Ghana and Suriname. Although the full scope of deforestation induced by mining across the tropics is unknown, as the sites of many of the minerals on the list overlap with forest areas, there is a high chance that mining will increase deforestation and associated human rights impacts, and have large indirect impacts.

Despite these issues, the EU’s proposal only recommends conducting an environmental footprint study, not extending it to include social impacts.

A Green and Just transition means prioritising reducing demand for EU energy and resources

Forests have for long been sacrificed for mining, mainly for coal extraction, driven by European energy demand and there is a danger that the clean energy transition will make things worse.

“We must not replace a fossil fuel addiction with an addiction to metals. Attempting to replace fossil energy and uses one for one would mean an enormous increase in mining: the first focus should be reducing energy consumption in a way that is socially just ” said Martin Pigeon, Fern’s bioenergy campaigner.

Russia’s invasion of Ukraine has shown that it is possible to reduce consumption. EU fossil gas use dropped by 19.3 per cent from August 2022-January 2023, compared with the same months from 2017 to 2022.

One way to reduce consumption would be to prioritise the move to public transport since electric vehicles place a particularly high demand on minerals, both for batteries and metal.

Governance of the commons

The EU’s proposal includes the setting up of a Board, composed of Member States and the Commission, to perform certain tasks such as assessing applications for Strategic Partnerships, discussing minerals exploration, and monitoring. This governance structure lacks transparency and safeguards to identify and mitigate the negative impacts of mining operations. It should include a sub-group on social and environmental issues and the European Parliament.

Transparent and inclusive partnerships with non-EU countries

Even with a reduction first approach and more efficient use of resources, European green industrial ambitions will probably require increased access to minerals, many of which are outside the EU.

“EU demand for Critical Raw Materials must be fair for people and forests, or the negative effects of their sourcing could be devastating. The EU must ensure that communities, forests, and the climate they protect are not collateral damage in the green energy and digital transitions” said Perrine Fournier, Fern’s Trade Campaigner.

Access to imported transition minerals must be negotiated fairly and transparently, respecting producer countries’ strategies and their own transition. Local communities and Indigenous Peoples’ must have Free Prior and Informed Consent and national civil society must have a clear role in defining the terms of such partnerships, with the aim of achieving a “do not harm” approach and delivering fair access to green energy.

“The EU has negotiated partnership agreements in an open and transparent manner, with positive impacts on the way that forests are owned and managed. It is critical that any partnerships struck around the issue of minerals draws from these lessons and respects third countries’ transition,” Fournier said.

Meaningful obligations for companies

Relying on certification schemes to enforce sustainability is doomed to fail. Private certification schemes have not been effective in tackling deforestation and human rights abuses. This has resulted in the development of the ground-breaking EU Regulation on deforestation-free products. Companies wanting to place CRM on the EU market should also have mandatory social and environmental due diligence obligations. Such raw materials are critical from an economic perspective but even more so from a social and environmental perspective.

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Background

The EU uses the term Critical Raw Materials for items that are economically important but where there is a risk to their supply chain. The EU lists 34 Critical Raw Materials, with new additions such as copper and nickel.

Transition Minerals are those that are needed to transition the energy system away from fossil fuels. They are particularly important for batteries and therefore electric vehicles, but are also needed for windmills and solar panels. Such minerals include cobalt, lithium, copper, nickel, bauxite, manganese, graphite, chromium, zinc, platinum and silicone.

There is a lot of concern about the environmental harm being caused by mining for transition minerals, but the most damaging mines are still for coal, iron and bauxite. Demand for lithium is expected to grow by over 40 times by 2040, followed by graphite, cobalt and nickel (around 20-25 times). The expansion of electricity networks means doubling demand for copper for power lines over the same period.

NGOs and research institutes have decades of evidence of the serious damage that mining does to the environment, forests and Indigenous Peoples and local communities. Notable examples include coal mining in Indonesia and Russia; iron ore in Brazil; and gold in Suriname and Ghana.

The global hunt for Critical Raw Materials — and the resulting mining rush — is having a devastating effect on the environment and Indigenous populations living near mineral reserves. Mining in forests is particularly problematic because forests are lost for the mining and the infrastructure developments that go with it. Roads into previously closed forests often increases illegal logging further. Some academics believe the impact of mining on forest land can be larger than the mining itself, by a factor of one to 12.

The EU’s plan to increase access to Critical Raw Materials comes a few months after the EU published the EU Regulation on deforestation-free products which aims to ensure that commodities such as wood, cocoa, soy and palm oil imported into the EU don’t cause deforestation.

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