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Vice-President of the European Commission responsible for Industry and Entrepreneurship
"How to ensure a secure supply of raw materials in the global economy"
Berlin, 25 April 2012
Dear Chancellor Angela Merkel,
Distinguished members of the German Bundestag, Dear President Norbert Lammers,
Ladies and Gentlemen,
Thank you very much for inviting me to speak about "How to ensure a secure supply of raw materials in the global economy".
Raw materials are essential components of industrial production and therefore an important part of any growth strategy.
The difficulty we face now is that the EU economy is stagnant. Europe is going through the worse economic crisis since the end of the Second World War.
As chancellor Merkel has often pointed out, the response needs to be European to be effective. Europe needs to set up strong economic governance to reduce the differences in competitiveness between the Member States.
Thanks to the strong support of Germany, the signing of the Fiscal Compact is a significant step towards this governance. But now it is clear that only austerity will not resolve the crisis. To reduce the high unemployment levels we need an economy that grows, otherwise all the sacrifices made will be in vain.
We need to focus on industrial innovation, better infrastructure? And more efficient SMEs.
A stronger EU budget and a greater role for the European Investment Bank are necessary to achieve our growth targets.
We need also to promote the digital agenda to speed up the free movement of goods and the competitiveness of the EU industry.
In short, we need to focus on the real economy, and on what industry needs to trigger growth and jobs.
A new industrial revolution is coming, and we need to exploit all its benefits using information technology to change the way in which we produce, consume and re-use energy in our daily lives.
This is a way to guarantee a sustainable lead for European industry.
Today's meeting is an opportunity to address the availability and management of raw materials; a concern for governments in both Europe and around the world.
These materials are key to the success of our manufacturing industry. Some are vital, for example in the construction sector.
Others, like the famous rare earths, are very important for emerging technologies like the environmentally-friendly energy applications.
I know this is an issue of growing importance to Germany in view of the its change in energy sources and more generally to the EU within the context of our climate policies.
We have, however, already noticed disruptions in the supply chain of raw materials. This fact has received political attention in many countries.
This is due to several reasons.
There is a sharp increase in demand of raw materials due to the economic growth of emerging economies, and their greater use in emerging technologies to serve our ageing society.
This has resulted in a sharp rise in prices of raw materials on the global market, speculation and disruption of supply.
Specific regulations for the commodity markets are currently being discussed – in my understanding, also in Germany.
The uncertainty of energy prices constitutes another challenge for industry. This is particularly the case for energy-intensive sectors, such as metals and cement production.
In this context, the EU industrial policy of 2010 identified the need to create an effective internal market in the energy sector. The full implementation of the EU's Third Energy package will be an important step towards this objective. Integrated energy networks will provide far more competition, efficiency, and will foster growth and innovation.
In December 2011, the Commission adopted its Energy Roadmap 2050 which sets out low-carbon objectives to create a more competitive and sustainable energy supply in the EU.
Coming back to raw materials, an increase in protectionist measures has made the situation even worse. Although no country in the world has all the raw materials it needs, Europe is particularly vulnerable because it depends on imports of many important raw materials.
In this context the European Commission adopted a Raw Materials Strategy in 2008 and reinforced it in 2011. We welcomed the German raw materials strategy, which is complimentary to the EU strategy.
In this context, we first identified a list of Critical raw materials for the EU.
These materials, (that are very important for our economies), have a high supply risk. Either because the production is concentrated in a few, sometimes unstable, countries or because recycling or substitution is low or not yet feasible.
The European list of critical raw materials is established every ten years and is reviewed every three years. The current list of 14 critical raw materials will be updated by 2013.
I would like to underline three key messages of our action on raw materials.
Firstly, as I already mentioned, the challenges are not specific to one country or region in the world. All countries and regions are, to some extent, dependent on the supply of raw materials from other countries. It is important that we all realize this.
This is why seeking alliances and co-operating with other countries has become such an important element of the European raw materials strategy.
The European Commission has reinforced its co-operation with the US and Japan. We are also in talks with Greenland and have signed memoranda of understanding with several Latin-American countries.
The EU's development policy can be used to allow these countries to use their resources for economic growth and development.
We have therefore launched a co-operation in the area of raw materials in the context of the EU/Africa Partnership.
The EU/Africa Partnership covers three themes:
The European Commission's trade strategy aims to establish a true level-playing field. The successful challenge against Chinese exports restrictions on 9 raw materials at the WTO earlier this year is a sign of success.
It was achieved through the co-ordinated approach of several countries. Japan has now joined the EU and the USA in dispute settlement consultations with China in the WTO.
I wish however to emphasise that we try to solve differences through dialogue. In fact we launched a raw materials working group with China at the end of 2010 to exchange information and views. This being said, in the absence of solutions through dialogue, differences might need to be addressed through the WTO.
The second key message is that Europe still has considerable deposits of raw materials. Access to land is therefore crucial, because the competition for other land uses is high.
Since Europe is a relatively densely populated region, the sustainability of mining projects is crucial. When it comes to sustainability and to the supply of raw materials, we need to think globally but also need to act locally and look into the potential for mining within the EU.
Our Nordic Member States as well as Poland, Portugal, and Spain, have put more mining projects in place. I am aware, that German based companies and researchers are already involved in these developments by providing the all-important equipment, technology and know-how.
The third key message is that research and innovation will also play a vital role. The Commission proposes to take action, because innovation will help to reduce the pressure on supply, for example by:
With such goals in mind, in February this year, the Commission set out the European Innovation Partnership on raw materials which aims to make Europe a world leader in capabilities related to exploration, extraction, processing, recycling and substitution by 2020.
We are now in the process of launching the High Level Steering Group to provide strategic advice and guidance to the European Innovation Partnership and look to Germany to take a role in this regard.
I am sure that the pooling of the activities and the various actors – be it the European Commission, Member States, stakeholders - will help stimulate the sustainable supply of raw materials necessary to provide jobs and growth to our citizens.
Ladies and Gentlemen,
We are being confronted with challenges that have no quick fix and no purely national solution. These challenges are complex and of a structural, strategic and long term nature.
In my view there are obvious synergies between the German and the European Strategies: The initiation of the German Mineral Resources Agency (DERA), the Helmholtz Institute Freiberg for Resource Technology and the currently adopted Resource Efficiency Programme (ProgRess) are welcomed examples of progress.
And we need to ensure that we all act in the same direction and within the framework of our respective responsibilities.
We know innovation is a key driver for our success. Hence, I call on your co-operation and supportive contribution to the proposed Innovation Partnership on raw materials.
I believe it is the only way for us to remain a strong partner and to stay economically and socially competitive.
Thank you for your kind attention.