EU and Ukraine kick-start strategic partnership on raw materials

This article is brought to you in association with the European Commission.

Today, the EU and Ukraine have launched a strategic partnership on raw materials, with the aim of achieving a closer integration of raw materials and batteries value chains. Vice-President Maroš Šefčovič and Prime Minister of Ukraine Denys Shmyhal signed a Memorandum of Understanding underpinning the partnership during the dedicated High Level Conference.

The strategic partnership with Ukraine will include activities along the entire value chain of both primary and secondary critical raw materials and batteries, and in line with the objectives of the EU’s Critical Raw Materials Action Plan, it will help diversify, strengthen and secure both sides’ supply of critical raw materials, essential for achieving the green and digital transitions. The partnership will also be decisive in preserving global competitiveness and developing resilience of EU and Ukrainian industry.

Today’s signature constitutes the first tangible deliverable under the enhanced cooperation between the European Union and Ukraine in the areas of the European Green Deal and the Industrial Strategy. It follows on the mutual commitment and interest expressed at the 7^th Association Council meeting between the EU and Ukraine on 11 February 2011.

Concrete areas of work of the partnership

More specifically, the strategic partnership signed today will aim to develop three key areas of work, as defined in the Memorandum of Understanding.

• First, it focuses on the approximation of policy and regulatory mining frameworks, and notably the environmental, social and governance criteria across all activities.
• Secondly, the partnership aims to better integrate critical raw materials and battery value chains to develop minerals resources in Ukraine in a sustainable and socially responsible way. To do so, it will engage the European Raw Materials Alliance and the European Battery Alliance as platforms for EU and Ukrainian stakeholders, including funding and investment organisations, to collaborate and develop joint venture projects and other business opportunities. To this end, Vice-President Šefčovič formally accepted the membership of the Ministry of Ecology and Natural Resources of Ukraine to the two European industrial alliances.
• Finally, the partnership also encourages closer collaboration in research and innovation along both raw materials and battery value chains using Horizon Europe.

Furthermore, the EU and Ukraine endorsed a first roadmap, a set of concrete activities and joint projects to advance the strategic partnership in the period 2021-2022. Specifically, it will help to:

• Develop a low carbon strategy and roadmap to decarbonise raw material mining, extraction and processing in Ukraine;
• Strengthen sustainable and responsible sourcing and processing of raw materials and batteries in Ukraine by organising capacity building events for public administration and trainings for companies;
• Digitalise and strengthen data management of Ukrainian mineral resources/reserves by creating ‘Data room’ – a repository with digital geological reports, and de-classifying and re-assessing raw materials reserves using international standards;
• Enhance the use of Earth-observation programmes and remote sensing to strengthen new resource exploration, and monitor environmental performance of mines during operations and post-closure;
• Identify and conduct joint-venture projects for EU and Ukrainian industrial and investment actors by using Business Investment Platforms of the European industrial alliances.

The EU and Ministry of Ecology and Natural Resources also launched cooperation on the EU technical assistance support under the strategic partnership. The EU topped-up its 2021 technical assistance programme to the Ukrainian government and companies by € 750,000. Further substantial assistance support for capacity building, trainings and studies is foreseen as from 2022.

The European banks, i.e. the EIB and the EBRD, will also mobilise financial and investment instruments to support concrete actions under the Memorandum of Understanding and the Roadmap.

Today’s strategic partnership was developed under the existing framework of the EU-Ukraine High Level Industrial Dialogue – Working Group on Raw Materials. This collaboration structure will also be used for monitoring and discussing the matters of relevance to its implementation. A regular biennial high-level meeting, at ministerial level, will take stock of the strategic partnership, discuss possible new collaborations and endorse future roadmaps.

Members of the College said:

Vice-President Maroš Šefčovič, responsible for Interinstitutional Relations and Foresight, said: “I am honoured to launch, on behalf of the EU, this strategic partnership on raw materials and batteries with Ukraine. This new chapter in EU-Ukraine cooperation will not only strengthen our political bond, but will also bring a wide range of opportunities for EU and Ukrainian industry – and ultimately help create and preserve local jobs in future-oriented areas, intrinsically linked to the ongoing green and digital transitions.”

Commissioner Thierry Breton, responsible for the Internal Market said: “I am pleased to see concrete results of the Commission’s Action plan on Critical Raw Materials. This partnership will contribute to diversifying the EU supply of raw materials and addressing some of the strategic dependencies identified in the updated Industry Policy Strategy.   The high potential of the critical raw materials reserves in Ukraine, together with the need for modernisation of its extractive industry underpinned by improving the legal and administrative framework for investors and geographical vicinity, represent a solid base for the mutually beneficial partnership.”

Commissioner Olivér Várhelyi, responsible for Neighbourhood and Enlargement said: “The strategic partnership on raw materials and batteries will allow us to enhance economic links as launched under the EU-Ukraine Association Agreement, including the Deep and Comprehensive Free Trade Area (DCFTA). This will contribute to a strengthened resilience of the economy – a key aim of the recently adopted Economic and Investment Plan for the Eastern Partnership, in the implementation of which Ukraine will play an important role.”

Background

For Europe, this represents already the second partnership on raw materials signed recently, following the partnership with Canada signed on 15 June 2021.

In September 2020, the Commission published an Action Plan on Critical Raw Materials, to address the current and future challenges, and proposes actions to reduce Europe’s dependency on third countries. To do this, it proposes diversifying supply from both primary and secondary sources, improving resource efficiency and circularity while promoting responsible sourcing worldwide. The Action Plan aims to foster Europe’s transition towards a green and digital economy, and at the same time, bolster Europe’s resilience and open strategic autonomy in key technologies needed for such transition.

Similarly, the Commission adopted a strategic Action Plan for batteries in 2018, which sets out a comprehensive framework of measures to support all segments of the battery value chain, following the launch of the European Battery Alliance set up in 2017.

The EU-Ukraine Strategic partnership on raw materials and batteries is the second strategic partnership launched by the EU and will help to deliver the key objectives of the Critical Raw Materials Action Plan. The partnership on raw materials and batteries also builds on the Strategic Energy Partnership signed with Ukraine in 2016, which was instrumental in bringing two energy markets closer progressing with infrastructure development and the approximation of legal frameworks.