EU Considers Legal Measures to Reduce Dependence on Chinese Raw Materials with €3bn ReSourceEU Strategy
The European Union is considering legally requiring industries to reduce their purchases from China as part of a broader effort to shield Europe from hostile actions, according to EU industry commissioner Stéphane Séjourné.
The European Commission has unveiled a €3 billion strategy named ReSourceEU aimed at de-risking and diversifying supply chains for critical raw materials. This initiative includes funding to support 25 to 30 strategic projects across the bloc.
Key elements of the plan involve rules to prevent scrap aluminium from leaving the EU, recycling of magnets used in car batteries, and establishing a €2 billion per year fund backed by the European Investment Bank to encourage diversification away from cheaper Chinese supplies.
The Commission maintains the authority to legislate to compel companies to diversify their sourcing if procurement teams fail to take action with their boards.
Two priority projects have been identified to initiate the strategy's implementation: molybdenum extraction in Greenland and a lithium mine in Germany.
Financial support is also envisioned to assist companies in purchasing from more expensive non-Chinese suppliers. Additionally, a raw materials platform will be created to consolidate orders and build joint stockpiles.
New restrictions on scrap exports, potentially including copper scrap, may be introduced from 2026 if deemed necessary.
Market data for EU magnets indicates an annual import of about 20,000 tonnes of permanent magnets, with 17,000 to 18,000 tonnes coming from China, approximately 1,000 tonnes from the EU, and the remainder from other countries.
Lithium demand in the EU is expected to surge almost 60-fold by 2050. In 2020, over 78% of the EU’s lithium requirements were sourced from Chile.
