EU Unveils €3bn Plan to Cut Industrial Dependence on China

The EU has launched a €3bn initiative aimed at reducing its reliance on China for critical raw materials, warning industries that legally binding diversification rules could be introduced if companies fail to act. Industry commissioner Stéphane Séjourné said the plan is a “wake-up call” as Europe faces growing risks from China’s dominance in key supply chains.
Under the ReSourceEU strategy, the bloc will fund 25–30 strategic projects to diversify supplies of rare earths, metals and other essential materials. The plan includes new rules to prevent scrap aluminium from leaving the EU, expanded recycling of magnets used in electric vehicles, and a €2bn-a-year fund backed by the European Investment Bank to support firms sourcing outside China.
EU officials warned that China’s increasing use of raw materials for political leverage requires faster action. Beijing’s temporary export ban on chip materials earlier this year disrupted European industries, underscoring vulnerabilities in the supply chain. The EU may later mandate companies to diversify procurement if voluntary measures fall short.
Initial funding will support a molybdenum project in Greenland and a lithium mine in Germany. The EU will also explore financial incentives to help companies purchase from alternative, higher-cost suppliers and begin forming joint stockpiles. Officials highlighted the scale of the challenge, noting that Europe imports up to 18,000 tonnes of permanent magnets from China each year, compared with only 1,000 tonnes produced within the EU.
The push to “de-risk” supply chains comes amid global efforts by Western economies to reduce dependency on China, whose threats of expanded export controls continue to fuel urgency across Europe and the US.