EU states go-head for talks on EU-US Critical Minerals Agreement
Minerals - Photo by Paul-Alain Hunt on Unsplash
(BRUSSELS) - The EU Council adopted a decision Thursday authorising the Commission to open talks with the United States on a Critical Minerals Agreement and the related negotiating directives.
The agreement seeks to strengthen critical minerals supply chains and mitigate some of the negative repercussions of the US Inflation Reduction Act (IRA) on EU industry.
"The Critical Minerals Agreement will be key in diversifying international supply chains of critical minerals. It will also help to strengthen our cooperation in the context of the green transition," said Spanmish industry minister Hector Gomez Hernandez, for the EU presidency: "The agreement will grant the EU an equivalent status to US free trade agreement partners for the purpose of the Clean Vehicle Credit under the US IRA."
Key elements of the decision
According to the directives for negotiation, the CMA should:
- contain provisions on strengthening international supply chains of critical minerals and related sectors
- be fully consistent with World Trade Organization rules and fully in line with the objectives pursued in the EU Critical Raw Materials Act, in terms of ensuring the EU's access to a secure and sustainable supply of critical raw materials, and with the European Battery Alliance
- strengthen the trade in and diversification of international supply chains of critical minerals and promote the adoption of electric vehicle battery technologies by formalising the shared commitment to facilitate trade, and promote fair competition and market-oriented conditions for trade in critical minerals
- promote high levels of environmental protection and protection of workers in the critical minerals sector and encourage corporate social responsibility across critical minerals supply chains
- aim to prevent distortive and protectionist practices in critical minerals supply chains
- encourage cooperation on international standards for critical minerals lifecycle assessment, extraction, labelling, recycling and transparency, with a view to supporting sustainable supply chains, and help to prevent future barriers to EU-US trade
- Following the adoption of the mandate, the Commission will be able to engage in formal negotiations with the US with a view to concluding the agreement in the near term.
In the absence of a comprehensive free trade agreement between the EU and the US, the conclusion of a targeted critical minerals agreement should enable relevant critical minerals extracted or processed in the EU to count towards certain IRA clean vehicle tax credit requirements, and contribute to fostering EU-US supply chains.
Council decision authorising the opening of the negotiations on CMA