New Opportunities for the private sector

  eco energy department | July 4, 2024

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The CRMA primarily targets the public sector, the EU Commission and Member States to address insecurities in the supply of raw materials. However, the law recognizes the importance of the private sector at every stage of the process. CRMA therefore offers significant opportunities for companies, but it also creates new obligations to which companies must adapt quickly.

A key element to ensuring the security of the raw materials supply chain is the promotion of strategic projects. Strategic projects can be located both in EU Member States and in third countries and can be undertaken by both governments and the private sector. The EU Commission is responsible for this qualification and will evaluate applications based on a number of criteria, including the feasibility of a project, its sustainability and reliability. Qualifying a raw materials-related project as a strategic project has multiple advantages. The law provides for improved access to financing opportunities and access to risk reduction mechanisms for investments.

Furthermore, the law recommends financial support for strategic projects through already established EU funds, including the Just Transition Fund, the European Regional Development, the Recovery and Resilience Facility, the Innovation Fund and InvestEU. Regarding assistance through individual Member States, the recital of the law states:

Where private investment alone is not sufficient, the effective implementation of projects along the critical raw materials supply chain may require public support, for example in the form of guarantees, loans or equity and quasi-equity investments. Such public support could constitute State aid.

Notwithstanding current antitrust rules, State aid may therefore be eligible if used to ensure stable supply chains of raw materials.

In addition to financial assistance and improved access to finance, strategic projects could benefit from simplified approval procedures. The law proposes that promoters of critical raw materials projects should only interact with a single point of contact at the government level. Complex and lengthy approval procedures have been a major concern for many companies operating in the industry.