(1)

Access to raw materials is essential for the Union economy , digital and green transition, security and defence and the functioning of the internal market. There is a set of non-energy, non-agricultural raw materials that, due to their high economic importance and their exposure to high supply risk, often caused by a high concentration of supply from a few third countries, are considered critical. Given the key role of many such critical raw materials in realising the green and digital transitions, in line with the European Green Deal , and in light of their use for defence and aero space applications, demand will increase exponentially in the coming decades, and it is therefore necessary to implement measures to mitigate it and protect the Union from the rising gap between supply and demand at global level . Further raw materials used in other sectors such as agriculture, health or construction, might be exposed to high supply risks in the future. At the same time, the risk of supply disruptions is increasing against the background of rising geopolitical tensions and resource competition. Furthermore, if not managed properly, increased demand for critical raw materials could lead to negative environmental and social impacts. Considering these trends, it is necessary to take measures to ensure access to a secure and sustainable supply of critical raw materials through mitigating the increase in demand, fostering substitution and increases in efficiency to reduce the criticality of the expected exponential growth in demand in the Union, in order to safeguard the Union's economic resilience and open strategic autonomy.

(1a)

In addition to growing demand of primary and secondary raw materials, there is a growing demand for skilled workers. The shortage of skilled workers in the Union is already at a critical stage, also in the raw materials sector, which will require an additional 1,2 million skilled workers by 2030 in the e-mobility and renewables sector alone. The Union should therefore support Member States in providing training and skills and consider concrete actions at Union level, such as the establishment of a European raw materials academy to provide talents to the raw and advanced materials sectors, and to reskill and upskill the existing workforce.

(1b)

The security situation in Europe and around the globe requires urgent reflection on how to strengthen supply chain resilience, including in the defence sector.

(2)

Given the complexity and the transnational character of critical raw material value chains, uncoordinated national measures to ensure a secure and sustainable supply of critical raw materials have a high potential of distorting competition and fragmenting the internal market. Therefore, to safeguard the functioning of the internal market, a common Union framework should be created to collectively address this central challenge in a fair and equitable manner, in full compliance with applicable Union competition and State aid rules .

(3)

Firstly, in order to effectively ensure the Union's access to a secure and sustainable supply of critical raw materials, that framework should include measures to decrease the Union's growing supply risks by strengthening Union capacities along all stages of the strategic raw materials value chain, including extraction, processing and recycling, towards benchmarks defined for each strategic raw material. As regards recycling, the aim should be to improve the recycling capacity of each strategic raw material while taking into account technical and economic feasibility. Secondly, as the Union will continue to rely on imports, the framework should include measures to increase the diversification of the Unions’ supplies of strategic raw materials, in particular aiming to decrease direct and indirect dependencies on non-reliable partners while at the same time fostering use of alternatives and substitutions to these critical raw materials, aiming to achieve a lower environmental footprint, to reduce or mitigate the demand for them. Thirdly, it is necessary to provide measures to reinforce the Union’s ability to identify , monitor and mitigate existing and future supply risks and rapidly act accordingly . Fourthly, the framework should contain measures to increase the optimised circularity and sustainability of the critical raw materials consumed in the Union and foster research and development of alternative innovative materials and production methods to substitute raw materials consumed in the Union. Lastly, measures should be taken to limit the increasing demand for critical raw materials by increasing efficiency and the uptake of materials substitution in the whole value chain.

(4)

In order to ensure that the measures set out in the Regulation focus on the most relevant materials, a list of strategic raw materials and a list of critical raw materials should be established. Those lists should also serve to guide and coordinate Member States’ efforts to contribute to the realisation of the aims of this Regulation. The list of strategic raw materials should contain raw materials that are of high strategic importance, taking into account their use in strategic technologies underpinning the green and digital transitions or for defence or aero space applications, that are characterised by a potentially significant gap between global supply and projected demand, and for which an increase in production is relatively difficult, for instance due to long lead-times for new projects increasing supply capacity. To take account of possible technological and economic changes as well as ad hoc risks, such as those resulting from geopolitical conflicts or natural catastrophes , the list of strategic materials should be periodically reviewed and, if necessary, updated. In order to ensure that efforts to increase the Union capacities along the value chain, reinforce the Union’s capacity to monitor and mitigate supply risks and increase diversification of supply are focused on the materials for which they are most needed, the relevant measures should only apply to the list of strategic raw materials.

(5)

The list of critical raw materials should contain all strategic raw materials as well as any other raw materials of high importance for the overall Union economy and for which there is a high risk of supply disruption. To take account of possible technological and economic changes, the Commission should, in continuation of current practice, periodically perform an assessment based on data for production, trade, applications, recycling, and substitution for a wide range of raw materials to update the lists of critical and strategic raw materials reflecting the evolution in the economic importance and supply risk associated with those raw materials. The list of critical raw materials should include those raw materials which reach or exceed the thresholds for both economic importance and supply risk, without ranking the relevant raw materials in terms of criticality. This assessment should be based on an average of the latest available data over a 5-year-period. The measures set out in this Regulation related to one stop shop for permitting, planning, exploration, monitoring, circularity, and sustainability should apply to all critical raw materials.  The global demand for critical raw materials is projected to soon exceed supply, making the creation of a level playing field for innovative and sustainable alternatives vital for the Union. This requires not only investments into research but also the creation of market conditions that allow renewable substitutes to compete with traditional fossil raw materials. Therefore, the Union should take anticipative measures to mitigate the expected increase in the consumption of critical raw materials compared to projections, without compromising its industrial base. The list of critical raw materials and related priorities should be taken into account in all relevant Union and national law where those materials are directly or indirectly impacted.

(6)

To strengthen Union capacities along the strategic raw materials value chain, benchmarks should be set to guide efforts and track progress. The aim should be to increase capacities for each strategic raw material at each stage of the value chain, while aiming to achieve overall capacity benchmarks for extraction, processing and recycling of strategic raw materials. Firstly, the Union should increase the use of its own geological resources of strategic raw materials and build up capacity to allow it to extract the materials needed to produce at least 10 % of the Union's consumption of strategic raw materials. Keeping in mind that extraction capacity is highly dependent on the availability of Union geological resources, the achievement of this benchmark is dependent on such availability. Secondly, in order to build a full value chain and prevent any bottlenecks at intermediate stages, the Union should in addition increase its processing capacity along the value chain and be able to produce at least 40 % of its annual consumption of strategic raw materials. Furthermore, a part of the Union's new processing capacity might be developed under strategic partnerships in the Union lead strategic projects of mutual benefit in third counties, in particular in developing countries and emerging markets. Thirdly, it is expected that in the coming decades a growing share of the Union's consumption of strategic raw materials can be covered by secondary raw materials, which would improve both the security and the sustainability of the Union’s raw materials supply. Therefore, Union recycling capacity should be able to produce at least +10 % volume of recycling capacity based on the 2020-2022 baseline for each strategic raw material to at least collect, sort and process 45 % of each strategic raw material contained in the Union’s waste taking into account technical and economic feasibility. These benchmarks refer to the 2030 time horizon, in alignment with the Union's climate and energy targets set under Regulation (EU) 2021/1119 of the European Parliament and of the Council (3) and the digital targets under the Digital Decade (4), which they underpin. Furthermore, quality jobs, including skills development and job-to-job transitions, will address risks in the sectoral labour market and help ensure the EU’s competitiveness. Within that assessment, flexibility is needed to consider the unique specifications of the raw material in question, including material properties and challenges along the value chain. It should also aim to support existing capacities.

(7)

For some raw materials, the Union is almost fully dependent on a single country for its supply. Such dependencies create a high risk of supply disruptions , and, in the case of the People’s Republic of China, increases the Union’s vulnerability and security risks. To limit such potential risk and increase the Union’s economic resilience, efforts should be undertaken to ensure that, by 2030, it is not dependent on a single third country for more than 65 % of its supply of any strategic raw material, unprocessed and at any stage of processing, giving however special consideration to countries with whom the Union has established a Strategic Partnership on raw materials giving rise to greater assurances regarding supply risks.

(8)

It is necessary to put in place appropriate measures to support Strategic Projects aimed at the extraction, processing or recycling of strategic raw materials in the Union that should, together with Member State efforts, contribute to increasing capacities towards the benchmarks. Other measures, notably on exploration or circularity, are equally important to the reinforcement of different stages of the value chain and thereby contribute to the achievement of the benchmarks. To ensure that the benchmarks are met in time, the Commission, with the help of the European Critical Raw Materials Board (‘the Board’) should track and report progress towards the benchmarks. In case the reported progress towards the benchmarks is generally insufficient, the Commission should assess the feasibility and proportionality of additional measures. A lack of progress only on a single or small set of strategic raw material should in principle not trigger the need for additional Union efforts.

(9)

In order to build capacities in the Union, the Commission should, with the support of the Board, identify Strategic Projects in the Union that intend to become active in the extraction, processing or recycling of strategic raw materials, or in the development and scale-up of substitutes. Strategic Projects should be flagship projects in terms of technological innovation and sustainability. Effective support to Strategic Projects has the potential to improve access to materials for downstream sectors as well as to create economic opportunities along the value chain, including for small and medium-sized enterprises (SMEs) and local communities and contribute to the creation of employment. Therefore, to ensure the development of Strategic Projects across the Union, such projects should benefit from streamlined and predictable permitting procedures and support in gaining access to finance which could, if proven successful, be a role model for permitting procedures and access to finance for critical or other raw materials. In order to focus support and ensure their added value, projects should, before receiving such support, be assessed against a set of criteria. Strategic Projects in the Union should strengthen the Union's security of supply for strategic raw materials, show sufficient technical feasibility and be implemented in an environmentally and socially sustainable manner. They should also provide cross-border benefits beyond the Member State concerned. Where the Commission assesses these criteria to be fulfilled, it should publish the recognition as a Strategic Project in a decision. As a speedy recognition is key to effectively supporting the Union's security of supply, the assessment process should remain light and not overly burdensome. Mitigating the increase in demand for critical raw materials is one of the levers by which to strengthen the strategic autonomy of the Union and reduce its global environmental footprint. Therefore, the Commission should develop an indicator to monitor the evolution of the level of criticality and material efficiency of intermediate and final products containing critical raw materials.

(10)

In order to diversify the Union's supply of strategic raw materials, the Commission should, with the support of the Board, and in cooperation with like-minded partners, identify Strategic Projects in third countries and in the overseas countries and territories referred to in Annex II of the TFEU that intend to become active in the extraction, processing or recycling of strategic raw materials. Such projects should respect international standards and conventions related to environmental protection and human rights, and encourage the use of inclusive business models in which local communities participate in decision-making. To ensure that such Strategic Projects are effectively implemented, they should benefit from improved access to finance and de-risking mechanisms for investment . In order to ensure their added value and mutual benefits for the Union and third countries concerned , including for third countries where they are located, projects should be assessed against a set of criteria. Like projects in the Union, Strategic Projects in third countries should  contribute to the strengthening of the Union's security of supply for strategic raw materials, show sufficient technical feasibility and be implemented sustainably using the framework of a sustainability certification scheme on raw materials recognised by the Commission. The project should be mutually beneficial for the Union and the third country involved. Where necessary, the Union will support third countries in reinforcing their legal framework, good governance capacity and transparency in the raw materials sector with the aim of making the raw material partnership a mutually beneficial situation, including for the local population. A project should add value in that country and in the case of developing and emerging countries, enable it to move up the value chain while taking into account also its consistency with the principles enshrined in the Treaties, the Union’s common commercial policy and strategic priorities as well as the principle of policy coherence for development laid down in Article 208 TFEU. Such value may be derived from the project’s contribution to more than one stage of the raw materials value chain as well as from creating through the project wider economic and social benefits, including the creation of employment in compliance with international standards of the International Labour Organization (ILO). Where the Commission assesses these criteria to be fulfilled, it should publish the recognition as a Strategic Project in a decision.

(11)

In order to ensure the sustainability of increased raw material production, new raw materials projects should be implemented sustainably. To that end, the Strategic Projects receiving support under this Regulation should be assessed taking into account international instruments covering all aspects of sustainability highlighted in the EU principles for sustainable raw materials (5), including ensuring environmental protection including marine and coastal environment, socially responsible practices, including respect for human rights such as the rights of women and children, as well as transparent business practices. Projects should also ensure engagement in good faith as well as comprehensive and meaningful consultations with local communities, including with indigenous peoples. To provide project promoters with a clear and efficient way of complying with this criterion, compliance with relevant Union legislation, international standards, guidelines and principles or participation in an environmental certification scheme recognised under this Regulation should be considered sufficient. Furthermore, the Commission should further engage, in close dialogue with Member States, third countries, industry, standardisation bodies and other relevant stakeholders, in discussions about the development of European standards of critical raw materials extraction, processing and recycling. Sustainable and environmentally respectful mining projects, incorporating innovative processes and conducting mineral and metallurgical processing close to the extraction sites, could be regarded as important projects of common European interest. Such projects must significantly contribute to economic growth, job creation, the green and digital transition, and enhance competitiveness for the Union industry and economy. Furthermore, to align with Union values and objectives, such projects should exhibit an unwavering commitment to transparency, education, and community engagement, avoiding the use of fossil fuels through the integration of renewable energy sources, reducing waste, and utilizing sustainable water usage practices. Strategic raw materials are, in most cases, extracted as by-products of a carrier mineral. For the Union to meet the objectives of this Regulation, the by-product nature of strategic raw materials does not impact the strategic nature of such extraction projects. Projects with the aim of extraction can therefore be deemed strategic, both where the strategic mineral is extracted as a main product and where it is extracted as a by-product.

(12)

Any promoter of a strategic raw materials project should be able to apply to the Commission for the recognition of their project as a Strategic Project. The application should include relevant documents and evidence related to the criteria. To better assess the social, environmental and economic viability, the feasibility of the project as well as the level of confidence in the estimates, the project promoter should also provide a classification of the project according to the United Nations Framework Classification for Resources, and to allow for objective validation, they should support this classification with relevant evidence. A timetable for the project should also be attached to an application, in order to estimate when the project would be able to contribute towards the benchmarks for domestic capacity or for diversification. As public acceptance of mining projects is crucial for their effective implementation, the promoter should also provide a plan containing measures to facilitate public acceptance. This is also valid for projects in third countries. Special attention should be paid to social partners, civil society and other oversight actors. The promoter should also provide a business plan providing information regarding the project’s financial viability and giving an overview of funding , including the ownership structure in order to ensure that project funding does not contradict the aim of increasing the cooperation with like-minded partners, especially as regards projects in or financed by partners from third countries. Furthermore, information should be provided on off-take agreements already secured as well as estimates for potential job creation and for the project’s needs in terms of skilled workforce, including upskilling and reskilling , and the initiatives envisaged to improve participation of women as well as the overall working conditions .

(13)

To ensure the effective and efficient treatment of applications, the Commission should be able prioritise the processing of applications for projects related to specific underrepresented value chain stages or strategic raw materials, in order to be able to ensure the Union's balanced progress towards all benchmark for Union capacity included in this Regulation. The Commission should be able to prioritise Strategic Projects that contribute to circularity of raw materials or submitted by SMEs provided that a balance of projects between the different stages of the value chain is maintained. The Commission should also proactively seek out partner countries to promote strategic collaborations.

(14)

As the cooperation of the Member State on whose territory a Strategic Project will be implemented is necessary to ensure its effective implementation, that Member State should have the right to object to and thereby prevent that a project is granted the status of Strategic Project against its will. If it does so, the relevant Member State should provide a reasoned justification for its refusal referring to the applicable criteria. Similarly, the Union should not grant the status of Strategic Project to projects that will be implemented by a third country against the will of its government and should therefore refrain from doing so where a third country government objects.

(15)

To prevent misuse of the recognition as Strategic Project, the Commission should be able to repeal its initial decision to recognise a project as strategic if it no longer fulfils the conditions or the recognition was based on an application containing incorrect information. Before it can do so, the Commission should consult the Board and hear the project promoter. Project promoters should remain entirely liable for any deliberate deceit, and can be subject to potential corresponding judicial proceedings.

(16)

In light of their importance for ensuring the security of supply of strategic raw materials, Strategic Projects should be considered to be in the public interest or of public security concern. Ensuring the security of supply of strategic raw materials is of crucial importance for the success of the green and digital transitions as well as the resilience of the defence and aero space sectors. To contribute towards security of supply of strategic raw materials in the Union, Member States may provide for support in national permit granting procedures to speed up the realisation of Strategic Projects in accordance with Union law.

(17)

National permit-granting processes ensure that raw materials projects are safe, secure and comply with environmental, social and safety requirements. Union environmental legislation sets common conditions for the process and content of national permit-granting processes, thereby ensuring a high level of environmental protection and allowing for the sustainable exploitation of the Union's potential along the raw materials value chain. Being granted the status of Strategic Project should therefore be without prejudice to any applicable permitting conditions for the relevant projects, including those set out in Directive 2011/92/EU of the European Parliament and of the Council (6), Council Directive 92/43/EEC (7), Directive 2000/60/EC (8) of the European Parliament and of the Council, Directive 2010/75/EU (9) of the European Parliament and of the Council and Directive 2004/35/EC (10) of the European Parliament and of the Council, Directive 2009/147/EC (11) of the European Parliament and of the Council, and Directive 2006/21/EC (12) of the European Parliament and of the Council.

(18)

At the same time, the unpredictability, complexity and, at times, excessive length of national permit-granting processes undermines the investment security needed for the effective development of strategic raw material projects. Therefore, in order to ensure and speed up their effective implementation, Member States should apply streamlined and predictable permitting procedure to Strategic Projects. To that end, Strategic Projects should be given priority status at national level to ensure rapid administrative treatment and urgent treatment in all judicial and dispute resolution procedures relating to them. This Regulation should not prevent competent authorities from streamlining permitting for other projects on the critical raw materials value chain that are not Strategic Projects.

(19)

Given their role in ensuring the Union's security of supply for strategic raw materials, and their contribution to the Union's open strategic autonomy and the green and digital transition, Strategic Projects should be considered by the responsible permitting authority as being in the public interest and public security concern. Strategic Projects which have an adverse impact on the environment, to the extent it falls under the scope of Directive 2000/60/EC, Council Directive 92/43/EEC and Directive 2009/147/EC (13) may be authorised where the responsible permitting authority concludes, based on its case-by-case assessment, that the public interest served by the project overrides those impacts, provided that all relevant conditions set out in those Directives are met. The case-by-case assessment should duly take into account the geological specificity of extraction sites, which constrains decisions on location due to the absence of alternative solutions to extraction sites .

(20)

In order to reduce complexity and increase efficiency and transparency in permitting process, project promoters of critical raw materials projects should be able to interact with a single national authority, which is responsible for facilitating, coordinating and streamlining the entire permit granting process and in the case of Strategic Projects shall issue a comprehensive decision within the applicable time limit. To that end, Member States should designate a single national competent authority. A case officer providing an easy point of contact should be assigned. That appointed case officer could also be part of another authority with respect to the different national structures of the one stop shop. Where needed in light of a Member State's internal organisation, the tasks of the national competent authority should be able to be delegated to a different authority, subject to the same conditions. Without affecting the speed of the proceedings, the designated competent authority should be able to request the opinion and involvement of other competent ministries. To ensure the effective implementation of its responsibilities, Member States should provide their national competent authority, or any authority acting on its behalf, with sufficient personnel and resources.

(21)

In order to ensure clarity about the permitting status of Strategic Projects and to limit the effectiveness of potential abusive litigation, while not undermining effective judicial review, Member States should ensure that any dispute concerning the permit granting process for Strategic Projects is resolved in a timely manner. To that end, national competent authorities should ensure that applicants and project promoters have access to simple dispute settlement procedure and that Strategic Projects are granted urgent treatment in all judicial and dispute resolution procedures relating to the projects.  In addition, this Regulation should facilitate the exchange of best practices to resolve disputes, such as ad hoc working groups under neutral arbiters to solve open issues.

(22)

In order to allow citizens and businesses to directly enjoy the benefits of the internal market without incurring an unnecessary additional administrative burden, Regulation (EU) 2018/1724 of the European Parliament and the Council (14), which established the Single Digital Gateway, provides for general rules for the online provision of information, procedures and assistance services relevant for the functioning of the internal market. The information requirements and procedures covered by this Regulation should comply with the requirements of Regulation (EU) 2018/1724. In particular, it should be ensured that project promoters of Strategic Project can access and complete any procedure related to the permit granting process fully online, in line with Article 6(1) of and Annex II to Regulation (EU) 2018/1724.

(23)

In order to provide project promoters and other investors with the security and clarity needed to increase development of Strategic Project, Member States should ensure that the permit granting process related to such projects does not exceed pre-set time limit. For Strategic Projects involving only processing or recycling, the length of the permit granting process should not exceed 1 year. However, for Strategic Projects that involve extraction the length of the permit granting process should, considering the complexity and extent of the potential impacts involved, not exceed 2 years. To effectively achieve those time limits, Member States should ensure that the responsible authorities have sufficient resources and personnel. Through the Technical Support Instrument, the Commission supports Member States, upon their request, in designing, developing and implementing reforms including the strengthening the administrative capacity related to national permitting.

(24)

The environmental assessments and authorisations required under Union law, including in relation to water, habitats and birds, are an integral part of the permit granting process for a raw material project and an essential safeguard to ensure that negative environmental impacts are prevented or minimised. However, in order to ensure that the permit granting processes for Strategic Projects are predictable and timely and do not exceed the pre-set time limit for a particular stage in the permit granting process, streamlining the required assessments and authorisations while not lowering the level of environmental protection should be realised. In that regard, it should be ensured that the necessary assessment are bundled to prevent unnecessary overlap and it should be ensured that project promoters and responsible authorities explicitly agree on the scope of the bundled assessment before it is implemented to prevent unnecessary follow-up , without prejudice to the quality of those assessments .

(25)

Land use conflicts can create barriers to the deployment of critical raw material projects notably in developing countries, where forced eviction is a common feature of mining operations . Well-designed plans, which are based on close and justified cooperation of the relevant competent authorities on national, regional and local level , including spatial plans and zoning, that take into account the potential for implementing critical raw material projects and whose potential environmental impacts are assessed, have the potential to help balance public goods and interests, decreasing the risk of conflict and accelerating the sustainable deployment of raw materials projects in the Union and in third countries . Responsible national, regional and local authorities should therefore consider including provisions for raw materials projects when developing relevant plans.

(26)

Within the Union, critical raw materials projects often face difficulties with access to finance. Critical raw materials markets are often characterised by high volatility of prices, long lead times, high concentration and opacity. Additionally, financing for the sector requires a high level of expert knowledge and financial instruments aiming to de-risk investments, such as raw materials funds, tax breaks, financial guarantees, grants or other risk-mitigation financial measures that are often lacking among financial institutions. To overcome these factors and contribute towards ensuring a stable and reliable supply of strategic raw materials, Member States and the Commission should tackle hurdles in terms of policies and assist in access to finance and administrative support. Member States should take into account environmental, social and labour commitments taken by the relevant project promoters when deciding on financial support. In order to be competitive, innovative and resilient, as well as to be able to ramp up its production, processing and recycling as well as substitution capacities, the critical raw materials sector needs to access both public and private financing. In its urgency to act and in order to achieve the benchmarks set out in this Regulation, it is equally important to ensure that other horizontal policies, such as initiatives on sustainable finance, remain consistent with the Union’s efforts to facilitate the Union’s critical raw materials industry’s sufficient access to finance and investment.

(27)

A strong value chain in Europe can be built only with adequate financial means. The Commission will work with InvestEU implementing partners to seek ways to scale up support to investment in line with the common objectives set out in Regulation (EU) 2021/523 (15) and in this Regulation. The InvestEU Advisory Hub can contribute to the build-up of pipeline of viable projects.

(27a)

This Regulation should enhance synergies with actions currently supported by the Union and Member States through programmes and actions in research and innovation (R&I) in relation to critical raw materials and in developments of part of the supply chain, in particular the Horizon Europe Framework Programme established by Regulation (EU) 2021/695 of the European Parliament and of the Council  (16) (Horizon Europe)and Council Decision (EU) 2021/764  (17).

(28)

In order to overcome the limitations of the currently often fragmented public and private investments efforts, facilitate integration and return on investment, the Commission, Member States and promotional banks should better coordinate and create synergies between the existing funding programmes at Union and national level as well as ensure better coordination and collaboration with industry and key private sector stakeholders. To that end, a dedicated sub-group of the Board bringing together experts from the Member States and the Commission as well as relevant public financial institutions should be set up. This sub-group should discuss the individual financing needs of Strategic Projects and their existing funding possibilities in order to provide project promoters with a suggestion on how to best access existing financing possibilities. When discussing and making recommendations for the financing of Strategic Projects in third countries including emerging markets and developing countries , the Commission and , the Board, in cooperation with the potential partner countries should make Strategic Projects a priority under the Global Gateway strategy, and coordinate with national and international development finance institutions  (18).

(28a)

Continuous efforts at Union and national level are needed to foster and support R&I regarding critical raw materials, as fundamental research will be key to discover new materials and substitute materials.

(28b)

Specific financial and support instruments and targeted R&I funds to improve efficiency, substitution, recycling processes and closed material cycles are needed at Union and national level via R&I programmes and other instruments to boost innovation, particularly on waste processing, advanced materials and substitution, and for the development of new and innovative technologies in the field of sustainable mining of critical raw materials in the Union.

(29)

Private investment by companies, financial investors and off takers is essential. Where private investment alone is not sufficient, the effective roll-out of projects along the critical raw material value chain may require public support, for example in the form of guarantees, loans or equity and quasi-equity investments. This public support may constitute State aid. Such aid must have an incentive effect and be necessary, appropriate and proportionate. The existing State aid guidelines, which have recently undergone an in-depth revision in line with twin transition objectives, provide ample possibilities to support investments along the critical raw materials value chain and other objectives under the European Green Deal subject to certain conditions. The Commission should further consider the possibility of setting up a dedicated fund at Union level, for example in the form of a European Fund for Strategic Raw Materials including considering revolving instruments, or of earmarking of financial support through reprioritisation of funds under the Multiannual Financial Framework. Already existing knowledge, investment platforms and pipelines regarding critical raw materials projects should be used in that context.

(30)

Public support is used to address specific identified market failures or sub-optimal investment situations in a proportionate manner, and actions should not duplicate or crowd out private financing , impede cooperation between companies from different Member States, or distort competition in the internal market. Actions should be targeted and efficient and have a clear added value for the Union.

(31)

The volatile prices of several strategic raw materials, exacerbated by limited means to hedge them on forward markets, create an obstacle both for project promoters to secure financing for strategic raw material projects as well as for downstream consumers looking to secure stable and predictable prices for key inputs. In an effort to reduce uncertainty over future prices for strategic raw materials, it is necessary to provide for the setting up of a system that enables both interested off-takers and promoters of Strategic Projects to indicate their buying or selling bids and to bring them in contact if the respective bids are potentially compatible. Such a system is essential to foster the participation of SMEs in the value chains of strategic raw materials. Support should be provided to enable business consortia to access markets that are not yet covered by a Strategic Partnership or a free trade agreement.

(31a)

The European Investment Bank should, in agreement with the Board, the Commission and the Member States, explore setting up an EU Export Credit Facility that enables Union undertakings to invest in projects that contribute to achieving the targets set in this Regulation.

(32)

The existing knowledge and mapping of the Union’s raw materials occurrences were developed at a time when ensuring the supply of critical raw materials for the development of strategic technologies was not a priority. To acquire and update information on the critical raw material occurrences including the potential of geothermal extraction , Member States should draw up national programmes for the general exploration of critical raw materials and carrier metals which may contain critical raw materials, which should include measure such as mineral mapping, geochemical campaigns, geoscientific surveys as well as the reprocessing of existing geoscientific datasets. The identification of mineral occurrences and the assessment of the technical and economic viability to extract them involves high financial risk . To lower that risk and facilitate the development of extraction projects, Member States should make publicly available the information acquired during their respective national exploration programme, where appropriate using the framework of the Infrastructure for Spatial Information established by Directive 2007/2/EC of the European Parliament and the Council (19).

(32a)

In order to enable the extraction, processing, and recycling goals, Member States should promote actions to face the Union shortage of geoscientist students and graduates.

(33)

Space data and services derived from earth observation and GNSS systems, in particular the ones derived from EU Space Programme, Copernicus, Galileo and EGNOS, should be used to the extent possible to support the efforts towards sustainable critical raw materials value chains by providing a continuous flow of information, which could be useful for activities such as monitoring and management of mining areas, the environmental and socio-economic impact assessment or mineral resource exploration. As space data and services is also able to provide data about remote and inaccessible areas, it should be considered by Member States when drawing up and implementing their national exploration programmes to the extent possible.

(34)

Although the reinforcement of the Union’s critical raw materials value chain is necessary to ensure increased security of supply, the supply chains of critical raw materials will remain global and exposed to external factors. Recent or ongoing events ranging from the COVID-19 crisis to the unprovoked and unjustified military aggression against Ukraine as well as the impact of the Chinese Belt and Road Initiative on third countries underlined the vulnerability of some of the Union’s supply chains to disruptions and the urgency to identify levers to mitigate the demand, in particular of strategic raw materials . In order to ensure that Member States and European industries are able to anticipate supply disruption and prepared to withstand their consequences, measures should be developed to increase monitoring capacity, including the exchange of information to coordinate strategic stocks where necessary, and reinforce the preparedness of companies.

(35)

Member States do not have the same capacity when it comes to risk-awareness and anticipation, and not all Member States have developed dedicated structures that monitor the supply chains of critical raw materials and can inform companies about potential risks of supply disruptions. Similarly, although some companies have invested in the monitoring of their supply chains, others lack the capacity to do so. Therefore, in light of the global dimension of critical raw materials supply chains as well as their complexity, the Commission should develop a dedicated monitoring dashboard assessing critical raw materials’ supply risks and ensure the availability of the information gathered for public authorities and private actors, thereby increasing synergies amongst Member States. In order to ensure that Union value chains are sufficiently prepared against potential supply disruptions, the Commission should conduct stress tests assessing the vulnerability of the strategic raw materials supply chains and their exposure to supply risks. Member States should contribute to this exercise by, when possible conducting such stress tests through their national supply and information agencies covering critical raw materials. The Board should ensure the coordination of the implementation of the stress tests by the Commission and Member States. When no Member State has the capacity to perform a required stress test on a given strategic raw material, the Commission should conduct it itself. The Commission should also suggest potential strategies that can be adopted by the public authorities and private actors to mitigate supply risks in the short and medium term , such as implementing additional policy measures to reduce the need of strategic raw materials building strategic stocks or further diversifying their supply. For the purpose of gathering the information necessary to conduct the monitoring and stress tests measures, the Commission should coordinate with the relevant standing subgroup of the Board and Member States should identify and monitor  large companies that are important to the functioning of the value chain. When no member of the standing sub-group has the capacity to perform a required stress test on a given strategic raw material, the Commission should conduct it itself.

(36)

Strategic stocks are an important tool to mitigate supply disruptions, notably for raw materials. Although the proposed Single Market Emergency Instrument allows for the possible development of strategic stocks in the event of the activation of the Single Market vigilance mode, Member States and companies do not have obligations to build up or coordinate their strategic stocks ahead of a supply disruption. In addition, there is no coordination mechanism across the European Union that allows for the development of a common assessment and of an analysis of potential overlaps and synergies. Therefore, as a first step, and taking account of the present lack of relevant information, Member States should provide to the Commission information about their strategic stocks, whether they are operated by public authorities or by economic operators on the behalf of the Member States. Such information should include the level of stock available per strategic raw material, the outlook of stock levels, and the rules and procedures applicable to these stocks. Any request should be proportionate, have regard for the cost and effort required to make the data available as well as for its impact on national security, and set out appropriate time limits for providing the requested information. Information on the stocks of economic operators may be added to the analysis, albeit this does not constitute a request for information on them. The Commission should handle the data in a secure manner, and only publish information on an aggregate level. As a second step, based on the information acquired, the Board should indicate a safe level of Union stocks, taking into account the total annual Union consumption of the concerned strategic raw materials. Based on a comparison between existing stocks and the overall levels of strategic stocks for strategic raw materials across the Union, the Board, acting in agreement with the Commission, should then be able to issue non-binding opinions to Member States on how to increase convergences and to encourage them in building up their strategies stocks , while avoiding distortion of the market including at the expense of emerging markets and developing countries . In doing so, the Board should consider the need to main incentives for the development of strategic stocks by private operators using strategic raw materials.

(37)

So as to ensure further coordination, the Commission should ensure necessary consultation ahead of Member States’ participation in international fora where such strategic stocks may be discussed, notably via the dedicated standing sub-group of the Board. Similarly, in order to increase complementarity between the present proposal and other horizontal or subject-specific instruments, the Commission should ensure that the gathered and aggregated information are passed to vigilance or crisis governance mechanisms, such as the proposed Single Market Emergency Instrument's advisory group, the proposed Chips Act's European Semiconductor Board, the HERA Board or the Health Crisis Board.

(38)

In order to ensure that they are sufficiently prepared to face supply disruptions, large companies manufacturing strategic technologies in the Union using strategic raw materials should ensure an appropriate internal risk management . This will ensure that they take into account the supply risks of strategic raw materials and develop appropriate mitigation strategies to be better prepared in the event of a supply disruption. Similarly, the large companies falling within this scope should run regular stress tests of their strategic raw materials supply chains to ensure that they consider all different scenarios that may affect their supply in the event of a disruption. These measures will lead to additional considerations being given to the costs of potential supply risks.

(39)

Many markets for strategic raw materials are not fully transparent and are concentrated on the supply side, which increases the negotiating power of sellers and increases prices for buyers , posing a challenge to the market . To help ensure the availability of raw materials for undertaking established in the Union, the Commission should set up a system that is able to aggregate the demand of interested buyers. In developing such a system, the Commission should take into account experience gained in similar endeavours, in particular regarding the joint purchasing of gas as previously established in response to the gas crisis under Council Regulation (EU) 2022/2576 (20). Member State authorities should also be able to participate in this system in order to build up their strategic stocks. All measures adopted as part of that under this mechanism should be compatible with Union competition and national law.

(39a)

A resilient and competitive raw material sector is of great economic and strategic importance for the Union. Given the objectives of this Regulation, namely to strengthen the Union’s capacity in extraction, processing, and recycling of strategic raw materials, it is important to ensure a fair and predictable market environment for undertakings across the full raw materials value chain. Any system intended to aggregate demand in order to strengthen the market position of Union undertakings on the demand side must therefore also carefully consider the market effects on Union undertakings on the supply side.

(40)

The provisions on monitoring and strategic stocks included in this Regulation do not entail the harmonisation of national laws and regulations and do not replace existing mechanisms. Monitoring and risk preparedness incentives should be in line with European instruments. Therefore, instruments such as the Single Market Emergency Instrument proposal aiming to anticipate, mitigate and respond to crisis affecting the functioning of the Single Market or the Council Regulation (EU) 2022/2372 (21) on a framework of measures for ensuring the supply of crisis-relevant medical countermeasures in the event of a public health emergency at Union level, could still apply to critical and strategic raw materials in the event of a crisis or a threat to the extent that those materials fall within the scope of such instruments. Complementarity and coherence between this Regulation and crisis instruments should be ensured by the Commission through attentive exchange of information between the respective advisory and governance bodies established by these crisis instruments .

(41)

Most critical raw materials are metals, which can be in principle endlessly recycled, albeit with sometimes deteriorating qualities. This offers the potential to move to a truly circular economy in the context of the green transition. After an initial phase of rapid growth of demand for critical raw material for new technologies, where primary extraction and processing will still constitute the predominant source, recycling and re-use, should become increasingly important and reduce the need for primary extraction and its associated impacts. Today, however, recycling and re-use rates of most critical raw materials are low, including due to a lack of consideration of recyclability at the design phase of products, and recycling systems and technologies are often not adapted to the specificities of these raw materials. Action addressing the different factors holding back the circularity potential is thus required. Regardless of the amount of strategic raw materials consumed in 2030, the Union should aim at the circularity of those raw materials.

(41a)

Europe needs to enhance its open strategic sovereignty and increase its resilience in preparation for potential disruptions in supply due to health or other crises. Enhancing circularity and resource efficiency with increased recycling and recovery of critical raw materials, will contribute to reaching that goal.

(42)

Member States retain important competences in the field of circularity, for example in the area of waste collection and treatment systems. These should be used to increase collection and recycling rates for waste streams with a high potential for recovery of critical raw materials, making use for example of financial incentives such as discounts, monetary rewards or deposit-refund systems while preserving the integrity of the internal market . Member State authorities should also make a difference as buyers of critical raw materials and of products containing them, and national research and innovation programmes provide significant resources to increase the state of knowledge and technology for critical raw materials circularity as well as material efficiency and substitution strategies. Finally, Member States should promote the recovery of critical raw materials from extractive waste by improving the availability of information and by addressing legal, economic and technical barriers. One possible solution that Member States should look into are risk-sharing mechanisms between operators and the Member State to promote recovery from closed waste facilities.  The Commission should monitor the actions of Member States, benchmark and disseminate best practices and give recommendations to Members States for further actions, where appropriate.

(42a)

Electronic waste contains concentrations of critical raw materials that are orders of magnitude higher than those found in the best ore grades worldwide. This presents a significant economic opportunity for urban mining, with a high potential for development.

(43)

The Union has, in many of its regions, a legacy of raw materials extraction and thus substantial amounts of extractive waste on closed facilities which, due to their only recent rise in economic importance, have generally not been analysed for critical raw materials potential. The recovery of critical raw materials from extractive waste facilities has the potential to avoid and mitigate negative social and environmental effects of new extractive activities, create economic value and employment in historical mining regions, which are often affected by deindustrialisation and decline, although those regions could play a significant role in improving resilience of the Union and reducing the negative environmental and social impacts of access to raw materials. The lack of attention to, and information on critical raw materials content, especially on closed waste facilities, constitutes a key barrier to greater use of the critical raw materials potential of extractive waste.

(44)

The recovery of critical raw materials from extractive waste facilities should be part of the valorisation of relevant waste facilities. Directive 2006/21/EC sets out high requirements of environmental and human health protection for the waste management of the extractive industry. While these high requirements should be maintained, it is appropriate to establish additional measures to maximise the recovery of critical raw materials from extractive waste.

(45)

Operators of extractive waste facilities, both existing and new, should perform a preliminary economic assessment study regarding the recovery of critical raw materials from extractive waste present on the site and their deposits and from such waste being generated. In line with the waste hierarchy established in Directive 2008/98/EC of the European Parliament and of the Council (22), priority should be given to preventing the generation of waste containing critical raw materials, by extracting critical raw materials from the extracted volume prior to it becoming waste. In elaborating this study, operators should gather the necessary information, including concentrations and quantities of critical raw materials in the extractive waste, and perform an assessment of multiple options regarding processes, operations or business arrangements that could enable a technically feasible and economically viable recovery of critical raw materials. This obligation comes in addition to obligations laid down in Directive 2006/21/EC and the national laws transposing it and is directly applicable. In its implementation, operators and competent authorities should seek to minimise administrative burden and integrate procedures to the extent possible.

(46)

To address the current lack of information on the critical raw materials potential of closed extractive waste facilities, Member States should draw up a database containing all information relevant to promote the recovery, notably the quantities and concentrations of critical raw materials in the extractive waste facility, in compliance with Union competition rules. The information should be made publicly available and in a user-friendly and digital form, enabling access to more detailed, technical information. To facilitate user-friendly access to the information, Member States should for instance provide a point of contact to enable more in-depth exchanges with potential developers of critical raw materials recovery projects. The database should be designed to allow potential project promoters to easily identify facilities with a high potential for economically viable recovery in the short, medium and long term. To focus limited resources, Member States could follow a staged approach in the collection of information and perform the more demanding information collection steps only for the most promising facilities. The information collection activities should be aimed at providing accurate and representative information on the extractive waste facilities and gaining the best possible indication of the critical raw materials recovery potential.

(47)

Permanent magnets are incorporated in a wide variety of products, with wind turbines and electric vehicles being the most important and fastest-growing applications but also other products, including magnet resonance imaging devices, industrial robots, light means of transport, cooling generators, heat pumps, electric motors, industrial electric pumps, automatic washing machines, tumble driers, microwaves, vacuum cleaners and dishwashers containing significant amounts worth recovering. Most permanent magnets, especially the most performant types, contain critical raw materials, such as neodymium, praseodymium, dysprosium and terbium, boron, samarium, nickel or cobalt. Their recycling is possible but today only performed in the Union at a small scale or in the context of research projects. Permanent magnets should therefore be a priority product for increasing circularity.

(48)

A precondition for increasing the circularity of magnets is for recyclers , refurbishers and repairers to have access to the necessary information on the amount, type and chemical composition of magnets in a product, their location and the coating, glues and additives used, as well as information on how to remove the permanent magnets from the product. In addition, to ensure a business case for magnet recycling, permanent magnets incorporated in products placed on the Union market should, over time, contain an increasing amount of recycled materials. While providing transparency on the recycled content in a first stage, a minimum content of recycled content should be set after a dedicated assessment of the appropriate level and likely impacts.

(49)

Critical raw materials sold on the Union market are often certified regarding the sustainability of their production and supply chain. Certification can be obtained in the context of a broad range of public and private certification schemes available with varying scopes and stringency, creating the potential for confusion regarding the nature and veracity of claims made about the relative sustainability of critical raw materials placed on the Union market based on such certification. The Commission should be empowered to adopt implementing acts recognising certification schemes that should be considered comprehensive and trustworthy, providing a common basis for authorities and market participants for assessing the sustainability of critical raw materials. Recognition should be given only to certification schemes that cover a broad range of sustainability aspects, including environmental protection related to air, soil, water and biodiversity, human rights including labour rights governance considerations including business transparency and participation of local communities, which guarantee high sustainability standards, and which contain provisions for independent third party verification and monitoring of compliance. To ensure efficient procedures, promoters of projects applying to be recognised as Strategic Projects should be allowed to rely on participation in a recognised scheme to show that their project is implemented sustainably.

(50)

The production of critical raw materials at different stages of the value chain causes climate and environmental impacts, notably on water and biodiversity . In order to limit such damage and incentivise the production of more sustainable critical raw materials, the Commission should be empowered to develop a system for the calculation of the environmental footprint of critical raw materials, including a verification process, to ensure that critical raw materials placed on the Union market publicly display information on such footprint. The system should be based on taking into account scientifically sound assessment methods and relevant international standards in the area of life cycle assessment. The requirement to declare the environmental footprint of a material should only apply where it has been concluded, based on a dedicated assessment, that it would contribute to the Union’s climate and environmental objectives and be proportionate to the economic costs by facilitating the procurement of critical raw materials with lower environmental footprint and would not disproportionately affect trade flows. When the relevant calculation methods have been adopted, the Commission should develop performance classes for critical raw materials, thereby allowing potential buyers to easily compare the relative environmental footprint of available materials and driving the market towards more sustainable materials. Sellers of critical raw materials should ensure that the environmental footprint declaration is available to their customers. Transparency on the relative footprint of critical raw materials placed on the Union market may also enable other policies at Union and national level, such as incentives or green public procurement criteria, fostering the production of critical raw materials with lower environmental impacts. The deep sea is believed to have the highest biodiversity on Earth and provides critical environmental services, including long-term carbon sequestration. Deep-seabed mining is highly likely to cause permanent biodiversity loss and ecosystem damage. In line with the precautionary principle, no deep sea mining should take place as long as its effects on the marine environment and biodiversity have not been researched sufficiently, and as long as there is no scientific consensus that deep sea mining can be managed in a way that ensures no marine biodiversity loss and ecosystem damage.

(51)

The Environmental Footprint methods constitute a relevant basis for the development of the calculation rules. They rely on scientifically sound assessment methods which take into account similar obligations established by other Union legislation and developments on international level and cover environmental impacts, including climate change and impacts related to water, air, soil, resources, land use and toxicity.

(52)

It should be ensured that responsible operators assess the conformity of their products or materials with requirements to improve the circularity of permanent magnets and on the declaration of the environmental footprint of critical raw materials before placing them on the market and that those requirements are effectively enforced by competent national authorities. The conformity and market surveillance provisions established under Regulation (EU) 2019/1020 and Regulation (EU) 2023/xxx [OP: please insert reference to ESPR], are designed to address this challenge and should therefore apply also to those requirements. To further ensure that optimal use is made of existing frameworks, it should be ensured that for products that are subject to type approval under Regulation (EU) 2018/858 or Regulation (EU) No 168/2013, compliance is enforced through the existing type approval system.

(53)

The Commission should, as provided in Article 10(1) of Regulation (EU) No 1025/2012, request one or more European standardisation organisations to draft European standards in support of the objectives of this Regulation.

(54)

The Union has concluded Strategic Partnerships covering raw materials with third countries in order to implement the 2020 Action Plan on Critical Raw Materials. In order to diversify supply, these efforts should intensify and lead to the establishment of Strategic Projects. To develop and ensure a coherent framework for the conclusion of future partnerships and to develop a European raw materials diplomacy in line with the Union’s energy and climate diplomacy. The Member States and the Commission should, as part of their interaction on the Board, discuss , analyse and ensure coordination on, inter alia, whether existing partnerships achieve the intended aims, the prioritisation of third countries for new partnerships, the content of such partnerships and their coherence and potential synergies between Member States' bilateral cooperation with relevant third countries and the availability of sufficient access to finance . The Union should seek mutually beneficial and sustainable partnerships with such third countries, including with emerging market and developing economies (EMDE) , in coherence with its Global Gateway strategy, Team Europe approach, common commercial policy and its development and foreign policy , which contribute to the diversification of its raw materials supply chain as well as add value in these countries. Further efforts should also be made to invest in cooperation with international like-minded partners participating in the internal market, candidate countries or like-minded third countries that are covered neither by a Strategic Partnership nor by a free trade agreement. Those mutual interests should include the promotion and protection of environmental standards, social and human rights protection in accordance with international and national legislation, in full respect of multilateral cooperation rules.

(54a)

The Union’s strategic priority to diversify its critical raw materials supply needs to become a priority of the Union’s external action and diplomacy in the framework of the Team Europe approach and in line with its energy and climate external policy. The Union’s raw materials external policy should aim at explaining the Union’s approach to resource-efficiency, sustainability, circularity and substitution as well as aim at cooperating and, if necessary, creating international fora for better coordination and transparency in the global raw materials markets as well as for platforms for joint purchase.

(55)

In order to support the implementation of tasks pertaining to the development of Strategic Projects and their financing, exploration programmes, monitoring capacities or strategic stocks and to advise the Commission appropriately, a European Critical Raw Materials Board should be established. The Board should be composed of Member States, a representative of and the Commission, while being able to ensure participation of civil society and other parties as observers such as academics, civil society organisations, other Union institutions and Union agencies . To develop the necessary expertise for the implementation of certain tasks, the Board should establish standing sub-groups on financing, exploration, monitoring and strategic stocks as well as sustainability , that should act as a network by gathering the different relevant national authorities and, when necessary, consult industry, academia, civil society and other relevant stakeholders. The Board’s advice and opinions should be non-binding and the absence of such an advice or opinion should not prevent the Commission from performing its tasks under this Regulation.

(56)

The absence of progress towards the objectives, including the capacity and diversification benchmarks, may indicate the need for adopting additional measures. The Commission should therefore monitor the progress towards those objectives.

(57)

To keep administrative burden put on Member States and undertakings, especially SMEs, to a minimum, the different reporting obligations should be streamlined and the Commission should develop a template allowing Member States to fulfil their reporting obligations on projects, exploration and monitoring within a regularly published single document, that may be confidential or restricted.

(58)

In order to ensure trustful and constructive cooperation of competent authorities at Union and national levels, all parties involved in the application of this Regulation should respect the confidentiality of information and data obtained in carrying out their tasks. The Commission and the national competent authorities, their officials, civil servants and other persons working under the supervision of these authorities as well as officials and civil servants of other authorities of the Member States should not disclose information acquired or exchanged by them pursuant to this Regulation and of the kind covered by the obligation of professional secrecy. This should also apply to the European Critical Raw Materials Board. The data should be handled and stored in a secure environment.

(59)

When adopting delegated acts pursuant to Article 290 TFEU, it is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (23). In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(60)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission as regards: (a) specifying the templates to be used for applications for recognition of Strategic Projects, progress reports related to Strategic Projects, the national exploration programmes, and the reporting of Member States pertaining to exploration, monitoring, strategic stocks and circularity; (b) specifying which products, components and waste streams shall be considered to have a high critical raw materials recovery potential; and (c) determining the criteria and their application for the recognition of schemes related to the sustainability of critical raw materials. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (24).

(61)

To ensure that the obligations imposed under this Regulation are complied with, in particular as regards the fact that they comply with ecodesign requirements, companies that do not comply with their obligation, including on risk preparedness, project reporting and recyclability information, should be subject to penalties. It is therefore necessary that Member States lay down effective, proportionate and dissuasive penalties in national law for failure to comply with this Regulation.

(62)

The Commission should carry out an evaluation of this Regulation. Pursuant to paragraph 22 of the Interinstitutional Agreement on Better Law-Making, that evaluation should be based on the five criteria of efficiency, effectiveness, relevance, coherence and EU value added and should provide the basis for impact assessments of possible further measures. The Commission should submit to the European Parliament, to the Council, the European Economic and Social Committee, a report on the implementation of this Regulation and progress towards achieving its objectives, including the capacity and diversification benchmarks. The report should also, based on the implementation of the measures related the transparency of the environmental footprint of critical raw materials, assess the appropriateness of establishing maximum thresholds related to the environmental footprint.

(63)

To the extent that any of the measures envisaged by the present Regulation constitute State aid, the provisions concerning such measures are without prejudice to the application of Articles 107 and 108 of the Treaty.

(64)

Since the objectives of this Regulation, namely to improve the functioning of internal market establishing a framework to ensure the Union's access to a secure and sustainable supply of critical raw materials, cannot be sufficiently achieved by the Member States, but can rather, by reason of its scale and effects, only be achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union (TEU). In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,