Umicore welcomes the EU’s Critical Raw Materials and Net Zero Industry Acts but urges speed and scale

Umicore welcomes the European Commission’s complementary Critical Raw Materials Act (CRMA) and Net Zero Industry Act (NZIA) as essential steps in enabling the unprecedented and accelerated transformation of mobility and as key contributors to Europe’s objectives to reduce carbon emissions by 55 percent in 2030 and become climate neutral by 2050. The Acts express the ambition to secure strategic access to raw materials in a sustainable way and boost the development of, and production capacities for, net-zero energy technologies within the European Union.

Umicore is keen for the European Parliament and Council to act fast, decisively and with unity to legislate and implement these acts, including the necessary funding, in the interest of countering the damaging effects of climate change and to keep the European Union’s frontrunner position in sustainability and linked innovations.

The CRMA and NZIA will, in unison, support Umicore in its strategy and growth ambitions to both expand and decarbonize its regional battery materials supply chain – from metals to their recycling, refining, precursor and cathode active materials production. The Acts support Umicore’s own circular business model – which it put in place more than two decades ago already –  and will help provide the strategically important security of supply of critical and strategic raw materials; with a greater and explicit emphasis on both recycling and the opening up of responsible mining in Europe. Access to such materials are critical for Umicore to support its automotive customers as they transition from combustion engines to rechargeable batteries.

Umicore highlights the following aspects of the CRMA and NZIA as positive, whilst also takes into account a number of elements which it believes to be missing from the Acts:

Benchmark introduction

• By 2030, 15% of the EU’s annual consumption for strategic raw materials should be produced from recycling within the EU member states. The EU should produce at least 40% of all strategic raw materials consumed inside the EU, while securing worldwide partnerships for the remaining 60%.
  • Umicore welcomes these benchmarks as they support Umicore’s local-for-local approach and infrastructure for rechargeable battery materials as key to decarbonizing the value chain and achieving the purpose of electrification.
  • Umicore will strongly contribute to achieving these benchmarks in two ways:
    1. As one of the world’s largest recyclers and refiners of precious metals and battery materials, Umicore recycles more than 20 types of non-ferrous metals mostly serving clean mobility. These include platinum group metals (PGMs), such as palladium, platinum and rhodium for automotive catalysts; and cobalt, nickel and lithium in  rechargeable battery materials for electric vehicles. Once recycled, Umicore converts all these metals into new automotive catalysts and new ultra-pure cathode active materials for rechargeable EV batteries.
    
    2. As a leading producer of rechargeable battery materials and through its regional-for-regional approach, Umicore is the only company in Europe with a complete supply chain in place, involving the following stages: metals refining and the subsequent production of precursor materials in Finland, the production of cathode active materials in Poland and the recycling of battery materials in Belgium. 
• While Umicore welcomes the EU Commission’s benchmarks as strong first steps, it needs to ensure that these benchmarks apply to rechargeable battery materials with the consideration for more ambitious levels in the future.

 Strategic Projects and Permitting

• Umicore welcomes the much-needed fast-track permitting for clean-tech projects, including Umicore’ rechargeable battery materials and their recycling. It welcomes the definition of critical and strategic raw materials as they will be eligible for Strategic Projects, the introduction of the concept of Strategic Projects as well as the fast track and One-Stop-Shop which will also reduce the current complex permitting process.
  • Speed, scale and efficiency are of the essence for Umicore’s investment decisions and the realization of its own growth strategy. This in turn affects the growth strategy of its automotive and battery maker customers, as they rely on investments and significant capacity ramp ups to meet electrification targets.
  • Umicore last year announced ambitious near and longer term growth plans. From 2022 through to 2026, Umicore plans to invest 5 billion euros globally of which 4 billion euros are earmarked for the expansion of its rechargeable battery materials value chain. In Europe, these investments relate to the expansion of Umicore’s refining capacities as well as production capacities of both precursor materials and cathode active materials. In addition, Umicore plans to construct Europe’s largest battery recycling plant with a capacity of 150,000 tons a year, expanding its current and long established industrial-scale battery recycling activity.

• While Umicore welcomes the faster permitting and streamlined process, it insists that battery materials should fully benefit from this as they are strategically important in an industry that is moving at an unprecedented speed and scale. Time is critical to realize the industry-wide electrification ambitions. 

Funding

• Umicore welcomes the EU’s existing Temporary Crisis and Transition Framework (TCTF) with state aid measures to accelerate investments, but would welcome additional funding from the future European Sovereignty Fund (ESF). Umicore is looking forward to concrete proposals for the ESF to recognize the importance of a further roll out of a local-for-local supply chain and to allocate funding fast and for projects that are sustainable.
• Umicore regrets that the EU Commission’s proposal does not include concrete elements linking incentives to sustainable production.
  • In Umicore’s case this would apply to the sustainable production of rechargeable battery materials, as part of its strategy to decarbonize the battery materials value chain and reach true clean mobility. Clean mobility goes beyond the use of an electric vehicle as such and should include the sustainable production of rechargeable batteries and the responsible sourcing of battery materials. One of the key criteria Umicore uses in its selection of new production sites is access to renewable energy. Europe’s first Gigafactory in Nysa, Poland, runs on 100 percent renewable electricity from wind.

All in all, Umicore views the EU Commission’s CRMA as a step in the right direction. It urges the EU to legislate and to act – fast as well as at scale, to realize the industry-wide mobility transformation towards electrification, to ensure that Europe stands out as the best place to grow sustainable businesses – and ultimately, to counter the damaging effects of climate change.