Raw materials are the backbone of Europe’s policies toward economic independence. From the phones in our pockets to the batteries powering electric vehicles, they are used to create essentials for modern life. But in recent debates, two terms keep appearing: “Critical Raw Materials” and “Strategic Raw Materials.” What’s the difference, and why does it matter?

The difference between Critical Raw Materials and Strategic Raw Materials

The EU updated in 2023 a list of 34 Critical Raw Materials (CRMs) and 17 Strategic Raw Materials (SRMs) that need to be closely monitored. They are both considered “at risk,” as their disruption in the supply chain could cause major issues in the entire market. To create the list, the European council evaluated and chose raw materials that reaches or exceeds the thresholds for both economic importance and supply risk.

• Critical Raw Materials are important for the overall EU economy and could be subject to a high level of supply chain risk. 

  
  

• Strategic Raw Materials are raw materials that hold an even higher importance as they are used in strategic technologies (green tech, space, defense). They “have complex production requirements and thus face a higher risk of supply issues.”

Without CRMs, most European industries are be unable to function properly as they are used to producing many of our everyday appliances and essential products. We can for example mention tungsten used for the vibrating technology in phones, borath used in fertilizers for plant growth or copper and lithium, necessary for batteries used in electric vehicles.

Strategic raw materials are considered even more at risk. Not only are they used in practically every industry, but they are major keys to innovation. Neodymium, key element to build the strongest permanent magnet available, supports existing industries (sound systems) but also paves the way for innovation. SRMs are essential for technologies such as renewable energy systems, satellite components, and defense infrastructure.

After the pandemic’s computer chip crisis froze business for a lot of Tech companies for months, CRMs and SRMs have been held in the spotlight. How did CRMs and SRMs become essential in our global economy, and why does their volatility affect every industry?

Sources

• European Council - An EU critical raw materials act for the future of EU supply chains

• Fastmarkets - EC names critical, strategic raw materials under proposed new act

• European Commission - RMIS Raw Material Information System

• European Council - An EU critical raw materials act for the future of EU supply chains

  
  

Author: Emma Dauphin Reviewed by: Irina Chèvre

Published: February 2025