Europe races to break free from China's grip on critical raw materials
Europe is pushing to cut its reliance on China for critical raw materials like rare earths, copper, and lithium. These resources are essential for green technologies, defence systems, and electric vehicles. Currently, the continent imports 90% of its rare earth elements from China, leaving its industries exposed to supply risks.
To tackle this, the EU has rolled out new laws and partnerships aimed at securing its own supply chains and reducing dependence on foreign powers.
The Critical Raw Materials Act (CRMA), passed in 2024, marks a major step in Europe's push for self-sufficiency. The law identifies 34 critical materials—including rare earths, lithium, and graphite—and sets a target of processing 40% of them within the EU by 2030. To achieve this, €3 billion in funding will support 47 key projects, such as a Greek gallium production facility set to open in 2027. The act also speeds up permit approvals, establishes a European Critical Raw Materials Centre by early 2026, and introduces stockpiling measures to prevent shortages.
Alongside this, the **Industrial Accelerator Act** tightens controls on foreign investments in strategic sectors. Under the new rules, non-EU companies from countries dominating over 40% of global production—primarily China—will face restrictions on investments exceeding €100 million. The law also requires local manufacturing for public contracts and creates an EU raw materials exchange to stabilise supply chains for energy and defence industries. Europe has also struck **14 strategic partnerships** in the last five years to diversify its imports. Deals with countries like Australia for lithium and others for rare earths aim to reduce dependency on a single supplier. However, some partnerships involve governments with unstable track records, adding complexity to the strategy. Recycling is another focus, but the EU admits it must act faster to match China's dominance in processing. The **RESourceEU Plan** further strengthens efforts to find alternative sources after China imposed export restrictions on rare earths. Meanwhile, the European Commission is cutting red tape to boost competitiveness, recognising that slow progress puts industries at risk. The U.S. has already taken steps to build its own extraction and processing networks, leaving Europe under pressure to catch up. Experts warn that without rapid action, the continent's energy transition and defence capabilities could face serious setbacks.
Europe's push for raw material independence relies on a mix of domestic production, recycling, and global partnerships. The new laws and funding aim to secure supplies for wind turbines, electric vehicles, and military equipment. Success will depend on fast implementation, stable trade agreements, and competition with China's well-established processing industry.
