EU Waffles on Deep Sea Mining

EU Central Bank President, Mario Draghi, issued a report in September entitled, “The Future of European Competitiveness.”  The need for the report was driven chiefly by the fact that the EU has lagged behind the United States and China when it comes to growth and investment – and is especially trailing in innovation.  One of the report’s prescriptions highlighted the need to reduce dependencies, as they hurt competitiveness (see Russian gas for example), and specifically called out the EU’s reliance on China for battery minerals.  It also cited the need to protect and invest in energy transition industries within member countries. 

 “Europe is particularly exposed. We rely on a handful of suppliers for critical raw materials, especially China, even as global demand for those materials is exploding owing to the clean energy transition.”  _{(Mario Draghi, report on competitiveness)}

Europe is plagued with high energy costs due, at least in part, to poor strategic decisions in the past – with an overreliance on Russian natural gas playing a leading culprit.  Draghi is rightly concerned that the federation could find itself in an even worse position moving forward as the energy transition creates greater reliance on energy minerals given the fact that the supply of those minerals is highly concentrated in China.

Part of Draghi’s pragmatic plan to help the EU out of a tight spot would have the EU examine the concept of sourcing these minerals from the sea floor.  Draghi’s report stated that, “The EU should also carefully explore the potential of environmentally sustainable deep-sea mining: estimates suggest that the sea bed holds large multiples of the known land-based reserves for example for copper, titanium, manganese, cobalt, nickel and rare earth elements.”  Clearly this wasn’t an endorsement of the industry.  It was an acknowledgement that the resource is massive (and not owned by China) and that it deserves a look to see if exploiting it makes sense from an environmental perspective.  This would seem to be a balanced and rational approach. 

But Draghi’s suggestion was too much for the EU’s environmental activists. These groups were offended by the notion that the EU might help itself and become more competitive by looking for a solution to the critical minerals bottleneck – one that spares the environment and humanity.  The groups, led by Steve Trent of the Environmental Justice Foundation, issued a letter to EU President, Ursula von der Lyen, asking that the EU denounce Mr. Draghi’s suggestion.

They were successful in their endeavor.  A few weeks later, Joan Canton, who works in Thierry Breton’s office of Energy Intensive Industries and Raw Materials, affirmed the EU’s commitment to maintaining its risky anti-DSM stance in his response.  Quoting from the Joint Communication on the EU’s International Ocean Governance agenda adopted in June 2022, Canton’s letter read in part “The EU will continue to advocate for prohibiting deep-sea mining until these scientific gaps are properly filled, that it can be demonstrated that no harmful effects arise from mining….”

If nothing else, Mr. Canton’s response helped to confirm the EU’s intention to remain a competitive basket-case.  Competitive solutions do not ignore reality, nor do they seek to stop progress.      

1. The EU states that it will advocate for a prohibition on DSM until it can be proven that “no harmful effects arise from mining.”  This position means that the EU will push to stop DSM forever – there is zero chance of meeting the stated threshold.  Understand how backward the EU statement is.  If we applied the same rule to all activities, we would never undertake any of them.  The EU should necessarily prohibit all manufacturing and the sourcing of all natural resources, as these activities undoubtedly cause harmful effects.   Indeed, Steve Trent’s list of circular economy strategies, which include new battery technologies and recycling, each impose harmful effects and should also be prohibited under the EU directive.  We ask Thierry, Joan, Ursula, and the rest of the EU governing community, “how does this position aid in making the EU competitive?” Our sense is that Mario Draghi knows the answer.

• The only practical result of the EU taking any position on DSM is for signaling purposes, and the EU’s signal on this front undeniably serves to halt progress.  The signal from a large, important government, is extremely influential – a fact that a government regulator may not understand but a banker (Draghi) would.  The EU doesn’t have any jurisdiction over deep sea mining anywhere, and as a signatory to UNCLOS has given the UN its proxy, so it doesn’t need to have a position. It doesn’t gain anything by taking the position (other than maybe winning a few highly dubious virtue signaling points) but it sure does lose.  In adopting its position of prohibition, the EU has helped to shut down funding to the sector, effectively stopping research from moving forward, denying any chance that a moratorium would be lifted, and effectively eliminating the prospect that the EU could benefit from lessening its dependency on China for critical minerals and thereby become more competitive. Indeed, the EU’s “Closed For Business” sign is hung loud and proud, dissuading anyone who might eventually harvesting seafloor minerals from investing in the EU to advance the new industry.  

Later in Canton’s letter, he states that, “In line with the precautionary principle, the Commission should not recognise deep sea mining projects as Strategic Projects before the effects of deep-sea mining on the marine environment, biodiversity and human activities are sufficiently researched, the risks are understood and technologies and operational practices are capable of demonstrating that the environment is not seriously harmed.” 

While the statement sounds innocuous enough, a balanced understanding of the precautionary principle demonstrates how the EU is weaponizing it to express a political opinion rather than attempting to forge a sensible strategy based on a truly precautionary stance. 

To understand this, we refer to the European Commission’s own communication on the precautionary principle which states that, “Examining costs and benefits entails comparing the overall cost to the Community of action and lack of action.”  Yet, nowhere in the EU’s pronouncements on deep sea mining do they evaluate what not moving forward means for people an planet. In other words, the EU seeks to evaluate the impacts of deep-sea extraction without understanding its benefits (the avoidance of terrestrial mining’s serious costs to human health and the environment. Thus, these government officials act in direct violation of their own interpretation of the precautionary principle.    

This is a key point in our report “A Deadly Moratorium.”  Because the EU and others have left out half of the directive from the precautionary principle, they have abandoned the spirit of the principle and are harming people and planet.  Without looking at both sides of the issue, they cannot provide an honest and balanced assessment of risks.  The EC communication on the precautionary principle further notes that “the protection of health takes precedence” in arriving at a decision.  Yet, because the EU lacks a balanced assessment, they do not recognize the fact that people are dying due to terrestrial mining while the pathways to harm humans from nodule collection are orders of magnitude lower. Protection of health is supposed to hold a preeminent position in the EU and instead these officials seem perfectly willing to ignore the death, disease, and displacement in indigenous populations which they encourage with their position.

We sent an email to Joan Canton to remark on the inconsistency in EU policy.  See below for a copy.  We are still waiting to hear back from Mr. Canton.  We are not holding our breath!