When the draft of the EU’s Core Raw Material Act, called the European version of the IRA (Inflation Reduction Act), was released, the Ministry of Trade, Industry and Energy said, “Unlike the IRA, it does not include discriminatory provisions or local procurement requirements for offshore companies.” It is likely that the Neutral Industries Act will apply equally to companies within the EU and to export companies.”
According to the Ministry of Industry on the 17th, the EU Commission announced the draft of the EU Core Raw Materials Act (CRMA) and the Carbon Neutral Industry Act the day before.
According to the draft, the EU Core Raw Materials Act aims to secure stability in the supply of raw materials within the EU by reducing the supply chain dependence on a specific country and expanding regional investment. The draft released this time contains ▲goal setting to strengthen the raw material value chain ▲plans to secure raw materials ▲supply chain risk management ▲strategies for securing sustainability.
In order to secure safe and sustainable core raw materials within the EU, it has set the goal of strengthening the strategic raw material supply chain and diversifying imports. By 2030, it aims to extract 10% of the EU’s annual strategic raw material consumption, process 40% and have 15% recycling capacity. It also aims to diversify imports so that, by 2030, more than 65% of the EU’s annual consumption is not dependent on a single third country.
In addition, to implement the regulation, the ‘European Core Raw Materials Council’ will be formed, ‘Raw Material Strategic Projects’ will be selected, and the review period will be shortened by prioritizing approvals and permits.
To manage supply chain risks, key raw material monitoring and supply chain stress tests are conducted. Conduct a self-audit of the supply chain of large corporations and establish a joint purchase system that matches supply and demand within the EU.
In order to ensure sustainability, member states plan to prepare measures for collecting and recycling pollutants. In order to strengthen supply chain value chain cooperation, discussions on strategic partnerships targeting third countries were scheduled.
As part of the European Green Deal industry plan, the Carbon Neutral Industry Act aims to expand production capacity within the EU by simplifying regulations related to eco-friendly industries and supporting technology development. Last month, the EU announced a plan to foster eco-friendly industries to achieve the carbon-neutral target by 2050.
The draft bill set production targets for carbon-neutral technology in the EU, and included measures to simplify regulations, promote investment, and build infrastructure to support related projects. By 2030, at least 40% of the EU’s annual demand for carbon-neutral technology has been set as the EU’s own production target.
In order to strengthen the EU’s manufacturing capacity, it plans to simplify administrative procedures by designating a ‘carbon neutral strategic project’, shortening the deadline for processing related permits, designating a one-stop window, and introducing a regulatory sandbox. In addition, when screening public procurement bids in the EU related to carbon-neutral technology stipulated in the bill, weight is also imposed in consideration of sustainability and the contribution to supply chain resilience.
In this regard, the Ministry of Industry has been anticipating the announcement of the bill and has been gathering opinions at public-private partnerships and meetings with experts since 2022. The EU side has also expressed its position that investment, permits, and incentives should be non-discriminatory and labor environment standards should be harmonized.
At the same time, the Ministry of Trade, Industry and Energy assessed that it would not have a significant impact on Korean companies, but announced that it would identify risks and opportunities that would affect the industry. Details will be discussed at a company meeting next week.
The currently announced bill is a draft of the European Commission, and it is expected that it will take about one to two years for the legislative process, including consultations with the European Parliament and the Council of Ministers. The Ministry of Trade, Industry and Energy plans to analyze in detail the impact of each industry and whether the World Trade Organization (WTO) rules are violated, and establish a specific response plan.
An official from the Ministry of Industry said, “We will continue to consult with EU authorities to minimize the burden on Korean companies and maximize opportunity factors through EU outreach.”
[세종=뉴시스]
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.