In response to the risks associated with critical raw material supply, the European Union recently announced the launch of a unified rare earth strategic reserve plan to reduce its high dependence on China. Experts believe that this move has received positive responses from EU member states, and while rare earth refining technology remains a core challenge, it also provides the EU with a strategic opportunity to reshape the global rare earth industry chain landscape.
On June 23, Stephane Sejourne, the EU’s Industrial Strategy Commissioner and Executive Vice-Chair of the EU Prosperity and Industrial Strategy Committee, announced through the German newspaper “Handelsblatt” that the EU will establish a unified rare earth strategic reserve system following the strategic oil and gas reserve model to ensure long-term stability in the supply of critical raw materials.
The EU’s “Critical Raw Materials Act” officially took effect in early May 2024, setting standards for diversifying the supply of strategic raw materials. EU Commission President Ursula von der Leyen stated that the law will significantly increase Europe’s capacity in refining, processing, and recycling critical raw materials.
Sejourne stated that a new round of bidding processes will be initiated this year to actively promote diversified raw material procurement strategies. As an important component of the supply chain diversification strategy, the EU officially launched 13 overseas raw material development projects on June 4, covering strategic areas such as Greenland, Serbia, Malawi, and South Africa.
Rare earth metals are widely used in wind power, automotive, aerospace, defense, and high-tech fields, earning them the title of “industrial vitamins.” According to official EU data, China holds nearly 90% of the market share in global rare earth processing. Particularly in high-performance rare earth magnets, China’s dominant position has raised significant concerns for the EU.
Recently, China implemented new regulations on rare earth magnet export permits, imposing stricter approval processes on export companies, leading to a significant drop in export volume for that month.
Director of the Institute for National Defense Strategy and Resources Studies at National Chengchi University in Taiwan, Su Ziyun, told Epoch Times that EU countries have shown a high degree of strategic consensus in establishing a unified rare earth reserve. He said, “The EU already has cooperation experience in energy and material reserves, and member states will fully support this move.”
Facing the diverse political positions of Eastern European countries, experts believe that countries such as Poland, Czech Republic, and Romania, while conservative on some diplomatic issues, tend to have a consistent stance on the issue of critical raw material security.
Professor Sun Guoxiang from the Department of International Affairs and Business at Nanhua University in Taiwan added that the rare earth reserve system embodies the EU’s values of “sharing risks and benefits,” contributing to regional unity.
To break away from reliance on China, the EU is accelerating its global rare earth resource strategic deployment. In addition to developing local mineral resources in Greenland, Finland, and Sweden, they are also engaging in deep cooperation with countries like Australia, the United States, India, Brazil, and Vietnam.
According to Reuters, the EU and Australia plan to sign a strategic mineral agreement before 2025 to support European companies investing in Australian rare earth projects. Vietnam and the EU have also restarted rare earth exploration cooperation agreements, with plans to reopen century-old rare earth veins in northern Vietnam.
According to a 2024 analysis report by the European Parliament’s Research Service (EPRS), Iceland and Ukraine also have reserves of rare earth resources, holding long-term development potential within the EU’s overall strategy.
Sun Guoxiang proposed four strategic paths: 1. Cultivate internal resources: Nordic countries like Sweden and Finland hold development potential; 2. Expand global cooperation: Strengthen strategic partnerships with countries like the United States, Australia, India, and Vietnam; 3. Promote rare earth recycling circular economy: By 2030, the EU aims for 25% of critical raw materials to come from recycling channels; 4. Encourage technological innovation and substitutes: Fund research projects on new materials to reduce dependence on rare earths.
Su Ziyun stated that global rare earth reserves are widely distributed, with Australia, the United States, India, and other countries collectively holding reserves exceeding China, enabling Western countries to completely build an independent supply system.
Experts unanimously point out that rare earth refining technology is the core challenge to break away from China’s monopoly. Su Ziyun said, “The bottleneck lies in the refining process. China has accumulated refining capacity by sacrificing environmental protection and cost advantages over the long term.”
Although Europe and the United States possess a foundation in high-purity refining technology, they still face challenges in meeting strict environmental standards and high operational costs.
Su Ziyun suggested that the EU prioritize determining the countries for refining facilities, establish a technology-sharing mechanism, and ensure the large-scale realization of industrial-grade refined standards (above 99%).
On the eve of the China-US trade dialogue, China relaxed export approvals for rare earths to the United States on June 7 and expedited permit issuance to European companies. Commentator Wang He had previously told Epoch Times that China’s move is part of a “flexible pressure” strategy, aiming to delay Western efforts to advance their independent supply chain plans.
Sun Guoxiang predicted that China’s accelerated issuance of rare earth export permits to Europe is an attempt to ease the EU’s accelerating trend towards “de-Sinicization.” He anticipates that China will use methods such as “raising technical standards, managing price fluctuations, integrating industrial chains, and enhancing diplomatic communication” to maintain its global dominance in rare earths.
Su Ziyun summed up that the EU’s advancement of the rare earth strategic reserve system is “a significant strategic step.” He emphasized that the focus going forward is not on policy coordination but on technological breakthroughs and capacity implementation.
He said that with rising geopolitical uncertainties and supply chain security becoming a global focus, the EU’s establishment of a rare earth strategic reserve is not only a major shift in resource policy but also a key manifestation of strengthening its industrial strategic autonomy.