The Critical Raw Materials Act (CRMA) was published in the Official Journal on 3 May 2024 and officially entered into force on 23 May 2024. In Art 25 – Joint Purchasing, the Act provides for the EC to “set up and operate a system to aggregate the demand of interested undertakings consuming strategic raw materials [SRM] established in the Union and to seek offers from suppliers to match that aggregated demand”.
In principle, the argument for joint CRM purchases is rather straightforward: if a single or a few suppliers have a strong market position, buyers can strengthen their negotiating power by aggregating demand. By doing so, joint purchasing ultimately serves one of these two objectives: a) negotiate lower prices for the same quantities or b) secure (higher) quantities at the same price.
However, several factors suggest that replicating joint purchasing in the CRM markets could be challenging, if not counterproductive.
In light of the above, the objective of this assignment is twofold: (i) Assess the feasibility and limitations of joint purchasing in the CRM space, particularly regarding its potential to stimulate a premium CRM market. (ii) Map and possibly propose realistic policy options to stimulate a premium CRM market, either as alternatives and/or complements to joint purchasing.
