EU says plan to ensure critical raw materials supply is not aimed at China
A senior European Union official denied that the bloc’s recently agreed-upon plan to diversify its supply of strategically critical raw materials targets China, a move that could be seen as trying to ease increasingly fraught relations between Beijing and Brussels
The EU Critical Raw Materials Act (CRMA), adopted by co-legislators from the European Parliament and the Council last week, is aimed “simply [at] diversifying sources of supply,” an official told Euractiv on Wednesday (27 March).
“I think [it] is very important [to note] that this is not an ‘antagonising China’ question,” they added. “We will continue to buy a lot of materials from China, and we will be very happy that China continues its economic development by selling materials to us.”
The CRMA sets a range of ambitious targets for the EU’s consumption of “strategic raw materials” by the end of this decade. In particular, no more than 65% of the EU’s annual consumption of any such material should derive from any single non-EU country.
According to a study published in April 2023 by EU policy think tank Bruegel, EU imports from China exceeded this threshold for five materials — bismuth, manganese, magnesium, cobalt, and strontium.
The EU also breached the same threshold for imports from two other countries: Turkey for borates and feldspar and the United States for beryllium.
Commission Vice-President Valdis Dombrovskis echoed the official’s comments, telling Euractiv, “Trade flows of critical raw materials are highly concentrated,” adding, “While we will continue to rely on imports, we need to massively diversify.”
‘Sleepwalking into an abyss’
The official’s comments come amid concerns over China’s dominance in the critical raw materials market — particularly at the processing stage.
Currently, China refines almost 60% of the world’s lithium, a critical element used in producing mobile phone and electric vehicle batteries.
It also accounts for over half of all globally processed manganese and cobalt and 90% of the world’s refined rare earths—a category of 17 elements for which the EU fully relies on imports.
In the context of the EU strategy to strengthen and diversify the bloc’s economic security, experts also noted that policymakers could learn from Beijing’s own strategies.
“I think this kind of strategic thinking is [what] we need to learn from,” he said. “[The] connection between raw materials strategy and industrial policy (…) is absolutely vital.”
Peter Tom Jones, Director of KU Leuven Institute for Sustainable Metals and Minerals, said that Europe should follow China’s lead as much is to be learned.
“We are not China. That’s clear […]. But I do think we can learn a lot from the Chinese because the Chinese have a brilliant strategy,” he said.
“They have a long-term vision. They have a fully vertically integrated strategy from mine to final clean tech products. There are no silos in that system,” noting that, by contrast, Europe’s supply chain was split into numerous silos.
“The mines — if we have them — […] the refineries, the motor production, the magnet production, the battery production: they’re all single units in a very complex supply chain.”
Echoing comments made by various EU analysts and policymakers in recent months, Jones also said the world was now entering “a new era” of “resource nationalism and protectionism”.
“Basically every single actor in society, policymakers, NGOs, ordinary civilians, CEOs of companies, universities — everybody needs to wake up because we are sleepwalking into an abyss,” he said.
The EU’s wider economic security strategy
The CRMA legislation was formally proposed just two weeks before Commission President Ursula von der Leyen outlined in March 2023 the bloc’s economic and diplomatic “de-risking ” from China strategy.
At the time, von der Leyen explicitly mentioned Europe’s heavy dependence on China for rare earths, lithium, and magnesium as key reasons for Europe’s need to reduce its reliance.
She also cited China’s decision to cut rare earth exports to Japan in 2010 after tensions flared over disputed islands in the East China Sea.
“We are deeply mindful of what happened with Japan’s imports of rare earths from China a decade ago when foreign policy tensions between the two in the East China Sea became acute.”
The EU’s push was further consolidated in the bloc’s economic security strategy presented earlier this year, outlining a range of proposals for the bloc to reduce reliance on certain “countries of concern” through export restrictions and screening for foreign direct investment across various sectors.
The proposals were widely interpreted as directed against China.
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