Critical Raw Materials, or CRM, are minerals that are strategically important for the functioning of the EU economy, particularly for sectors such as energy (including renewable energy), aerospace and defense industries, telecommunications, medicine, and pharmacology.
Deposits of these materials in the EU are insufficient to meet internal needs. As a result, the EU is forced to import them mostly, which carries certain risks, such as the unreliability of suppliers, and the economic security of the entire European region depends on it.
To mitigate the risks associated with the import of critical raw materials and ensure the sustainability and continuity of the EU economy, the European Commission has approved a draft Regulation on the Sustainable Supply of Critical Raw Materials to the European Union (Critical Raw Materials Act). This document outlines a range of measures to diversify supply sources, developing internal resources, and creating conditions for strategic partnerships with countries that possess significant reserves of critical raw materials.
What does Ukraine have to do with it?
Ukraine has significant mineral resources. In particular, out of the list of 34 minerals critical for the EU, 28 of them are found in Ukraine. This highlights the strategic importance of our country as a partner for the EU in the context of reducing its dependence on Russia and China.
The availability of mineral deposits creates opportunities to strengthen Ukraine’s cooperation with the EU: we can become a reliable strategic partner in the field of critical materials, their processing products, and finished products needed by strategic sectors of the EU economy. This will not only facilitate the introduction of advanced technologies in both Ukraine and the EU, but also stimulate economic growth and sustainable development for both parties.
What is the BRDO’s achievement?
During 2021-2023, the BRDO team has actively worked on improving Ukrainian legislation in the field of critical materials and aligning it with EU requirements and standards. As part of this work, we have implemented a number of initiatives aimed at increasing investment attractiveness and ensuring sustainable development of the subsoil use sector, including:
- Analyzed and identified Ukraine’s commitments as a candidate country to the EU in the field of mineral resources and critical raw material supply.
- Investigated investment barriers and risks for European investors in Ukraine’s raw materials sector.
- Developed criteria for critical materials based on EU practices.
- Prepared draft model production sharing agreements (PSAs) for the exploration and extraction of solid minerals and hydrocarbons, aimed at attracting the rapid entry of qualified international operators to Ukraine to ensure energy supply.
- Compiled a report on internationally accepted practices for accessing geological information about mineral resource reserves and resources.
- Participated in the development of the Critical Raw Materials module for the Ukraine Facility plan.
What’s next?
The BRDO team continues to work in the following areas:
- Implementation of the provisions of Regulation (EU) 2024/1252 to create a framework that will ensure the safe and sustainable supply of critical raw materials in Ukrainian legislation.
- Preparation of analytical materials that will form the basis for the state policy of critical minerals development in Ukraine.
- Identification and preparation of a case study that will demonstrate the potential for the development of the industrial sector of the economy.
- Development of proposals for the implementation of the circular economy concept in the field of critical materials.
- Implementation of modern solutions to simplify the process of starting the extraction of strategic raw materials.
- Preparation of proposals that will facilitate effective localization of production in Ukraine by the defense industry of partner countries through mechanisms of access to Ukrainian critical materials.
Stay tuned for updates on our pages!
The analytical work is conducted with the support of the Digital Transformation Activity with support from USAID and UK Dev. The implementing partner is the Better Regulation Delivery Office (BRDO).