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The European Commission is moving fast to reduce Europe’s dependence on imports of raw materials. However, the raw materials industry worries that continued ‘hazard-based assessments’ for project approval will stifle investment.
Last month, the EU gave final approval to its strategy to reduce Europe’s dependence on mineral imports by defining critical raw materials to be prioritised for domestic mining and recycling. Now that the legislation has been adopted, attention is turning to how the minerals market in Europe can be stimulated, both for sourcing and for use in products.
The barriers to mineral investment in Europe have long been recognised. As the Commission’s ad-hoc working group on minerals policy legal framework, land-use planning and permitting already noted in its 2014 report: “Europe has numerous non-energy non-agricultural raw materials at its disposal and could be self-sufficient for many of them if access was ensured.”
But the group also observed: “If Europe is to remain competitive in the global minerals and product markets and provide raw materials to meet its society’s needs, it is imperative that it remains attractive for inward investment through a fair and straightforward permitting and/or consenting process.”
Regulatory landscape
Mining projects can pose serious threats to the environment and public health, which has made their approval very complicated. Navigating the regulatory landscape can be a challenge, with strict requirements in place for projects in Europe.
At the same time, sound environmental and health protection is central to the EU’s way of regulating – with the European Union priding itself on having better protections for its citizens than other areas of the world.
Getting this balance right will be at the centre of the unfolding debate about Europe’s raw materials dependency in the next EU legislative term which begins in the Autumn.
The Critical Raw Materials Act specifies that permitting procedures should be sped up for the listed materials, but how can this be done practically in a way that gives investors long-term confidence and regulatory predictability?
In this context, as the Commission moves forward with plans to help its domestic industry with competitiveness, should the EU’s way of assessing safety and environmental impact be re-examined?
Environmental assessments
The industry has long called for a change in the way that Europe assesses the possibility of environmental and health risks from activities and products. They have expressed concern that too often “hazard-based assessments” are used to green light or reject a project. These focus on the intrinsic properties of substances or processes, evaluating whether those properties could pose a threat to human health or the environment.
But this type of assessment doesn’t consider how the substance will be used, and whether there is a likelihood of exposure. On the other hand, risk-based assessments also take into consideration the likelihood of exposure to these hazards and the potential consequences, integrating factors such as exposure pathways and population density.
This applies not only to the assessments of mining projects but also to their use of those metals in products. The European Commission is currently working on a Sustainable Products Initiative looking at the presence of hazardous substances.
But the metals industry has expressed concern that the approach being considered is too proscriptive and will discourage investment into the European metals sector, at the very time when the Commission is trying to encourage it.
Hazard-based approach
“We agree that hazardous substances in products need to be assessed to ensure that they do not present risks for consumers or professionals using these articles,” Mark Mistry, public policy manager at the Nickel Institute, told Euractiv. However, he said, the substances are often sealed inside a product and therefore do not come into contact with consumers.
The “hazard-based approach” is often connected with the EU’s precautionary principle, which states that if there is no evidence that a product or practice is safe, then there is a social responsibility to prohibit that product or practice.
The European Union’s REACH regulation (Registration, Evaluation, Authorization, and Restriction of Chemicals) bases its assessments on this approach. Additionally, directives such as the Industrial Emissions Directive and the Water Framework Directive set stringent standards for emissions, waste management, and water quality using this approach.
For the minerals sector, hazard-based assessments can provide valuable insights into the inherent dangers posed by certain metals and processes, aiding in the selection of safer alternatives or mitigation measures.
However, they may lead to overly conservative approaches that stifle innovation and economic growth. For investors eyeing opportunities in the metals sector, such an overly cautious approach could cause them to shun investment in Europe in favour of other jurisdictions which have used a risk-based assessment approach.
Risk-based assessments offer a more nuanced understanding of the actual risks posed by metal-related activities, the industry says, considering factors such as exposure pathways, mitigation measures, and societal benefits.
“Batteries are a good example here: while they do contain hazardous substances, those substances are sealed within the battery and do not present a chemical risk,” Mistry said. But while risk-based assessments offer advantages in terms of flexibility and practicality, they are not without challenges.
Assessing risks accurately requires comprehensive data on exposure pathways, environmental fate, and toxicity, which may be lacking or difficult to obtain. Additionally, communicating risk uncertainties to stakeholders effectively is crucial for fostering trust and transparency.
Opening the door to toxicity risks
NGOs say the EU’s precautionary principle is the right approach to protect EU citizens, and that efforts to whittle it down are a slippery slope toward deregulation at the expense of the environment and human health. They dispute the use of the term “hazard-based”, saying it is being used by the industry to cast doubt on the precautionary principle. They prefer the term “generic risk approach”.
“All decision-making is risk-based,” Tatiana Santos, a chemicals campaigner with the NGO European Environmental Bureau, told Euractiv.
Santos remarked “The precautionary principle is a generic risk management approach instead of specific. For example, if you have a chemical that is known to cause cancer, and you know already that it is widely used, then we should do a generic assessment. We say we don’t want toys to contain chemicals that cause cancer, but we don’t need to measure exactly how much carcinogen leaks out when a kid is using it.”
Santos said the EU has already been too lax about assessing the toxicity of products, and that previous promises by the European Commission have not been followed through on. Last week the EEB issued a report finding that only one out of the 13 benchmarks to improve product safety, committed to by the Commission four years ago just before the last election, has been met.
“There was a lot of political industry reluctance to move forward. They used as an excuse the war in Ukraine as a major problem with regard to [material and energy dependency],” she said.
However, the industry has expressed alarm that the benchmarks spelt out before the last election would have led to an overly proscriptive approach that would stifle innovation and that it would have led to banning hazardous substances that are being used in a way that doesn’t pose any realistic risk of exposure to humans.
The debate over hazard-based vs risk-based assessments will no doubt continue following next month’s EU election, as the concern over Europe’s resource security and industrial manufacturing base is pitted against the EU’s traditional use of the precautionary principle for regulation.
[By Dave Keating I Edited by Brian Maguire | Euractiv’s Advocacy Lab ]
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