EU climate change targets at risk without key Chinese raw materials, EU regulator warns

The European Union is struggling to diversify its supply of critical raw materials by the end of the decade. Successful energy transition Dependence on China remains high, according to a report by the European Court of Auditors (ECA) released on Monday.

This comes despite 14 major new trade deals and continued efforts by the European Commission to diversify the supply of key minerals deemed essential for the development of clean technologies such as batteries. electric car, wind turbineor solar panels, EU auditors concluded that the EU-27 is “unlikely to succeed in time”.

China accounts for 97% of the 27 EU countries’ imports of magnesium used in hydrogen generation electrolyzers. According to the ECA report, the region also imports large amounts of arsenic (39%), barite (44%), gallium (71%), germanium (45%), magnesium (97%), graphite (40%) and tungsten (31%).

“Without critical raw materials, there will be no energy transition, no competitiveness and no strategic autonomy,” said ECA’s Kate Pentus Rocimannus. “Unfortunately, we are currently dangerously dependent on a small number of countries outside the EU for the supply of these substances. It is therefore vital that the EU strengthens its role in this area and reduces vulnerability.”

Chile and Türkiye also play important roles in supplying resources to the region, but lithium China is the undisputed leader in mining output and has a strong presence in the extraction and refining of critical raw materials, making it an essential trading partner for Brussels.

The recently signed Mercosur trade agreement is with Argentina, Brazil, Paraguay and Uruguay, which are rich in critical raw materials. Pending European Parliament approvalwhich should help diversify the supply to the block. European lawmakers are also scheduled to discuss it on Thursday. Unfreeze the US-EU trade dealwhich also includes mineral agreements.

EU Executive Vice-President Stéphane Séjournet acknowledged at a technical briefing in December that the bloc relies on raw materials “in many sectors” and said “dialogue with China remains essential” when announcing new measures to monitor the EU’s supply of critical raw materials last December.

Séjournet also warned that Brussels faces the challenge of maintaining important trade ties while remaining resolute as the United States becomes more powerful. An increasingly unreliable partner And we are pursuing decoupling strategies, such as stockpiling our own critical raw materials.

“They are trying to stockpile raw materials from the United States and other countries,” he said of the second Trump administration. “For us, it is important to have the right organizational and financial tools to be able to act effectively when it comes to risk aversion.”

The European Commission plans to launch a European Raw Materials Center that will serve as the bloc’s main instrument. supply managementthere is a need to avoid market fragmentation and store and distribute raw materials, he said.

“We need clarity about sources of supply, inventory and challenges, especially in times of tension with China. We need to assess the level of tension in the market.”

China leads

China accounts for 60% of the world’s production of critical raw materials and 90% of its refining capacity, and the EU relies on China for around 90% of its raw materials and 98% of its rare earth magnets, according to the European Parliament Research Service.

The Jacques Delors Institute’s December 2025 Policy Brief warned that “Beijing is increasingly using these dependencies as geopolitical levers.” In recent years, most recently in 2025, Beijing has repeatedly Suspension or restriction of exports Supply of rare earths to the EU.

After diplomatic negotiations between China and Brussels restarted exports, the European Chamber of Commerce in China reported that based on information from 22 European companies from August to early September 2025, Chinese authorities had approved only 19 out of 141 license applications, with 121 “urgent” applications still pending.

“Despite repeated warnings, most (European) companies have so far failed to diversify away from China and resisted sharing the detailed supply chain data needed for aggregation,” writes the Jacques Delors Institute.

Martin Vladimirov, head of the geoeconomics program at the Center for Democracy Studies, said Chinese companies are pursuing interests in rare earths in Greenland and Arctic minerals such as iron ore and nickel across the High North, further expanding their control over these important minerals.

“These resources are at the heart of the world’s clean energy supply chain, and access to them will strengthen China’s advantage in low-carbon manufacturing,” Vladimirov said.

ECA noted that most of the strategic materials are also available in many other parts of the world, and China’s long-standing investments in critical raw materials have given it a privileged position in the market, so the lack of an advanced industry with affordable production volumes is a major challenge.

EU legal system and Chinese domination

The EU Executive Critical raw materials law In 2024, CRMA aims to reduce dependence on foreign players, including China, and ensure supply diversification to help the EU deliver on the European Green Deal, the EU’s plan to become carbon neutral by 2050.

Under the CRMA, 34 critical raw materials and 17 strategic raw materials were designated as “critical” to the green and digital transition, defense and space industries.

The law sets three non-binding 2030 targets for the EU’s annual raw material consumption. 10% is extracted locally, 40% is processed in the EU and 25% comes from recycled materials.

CRMA also states that no more than 65% of each strategic raw material can be sourced from a single non-EU country, which is a challenge given the region’s heavy dependence on China, and that ECA controls the processing stages of several strategic raw materials that are key to the energy transition, among them magnesium, gallium, and all rare earth elements.

“There is still a long way to go and the EU will struggle to secure the supplies of the strategic raw materials it needs by the end of this decade,” the EU auditors said.

Binding recycling targets?

The Luxembourg-based ECA emphasized that: Untapped potential in recycling Overturning the current negative outlook, we point out that most EU recycling targets neither encourage the recycling of individual materials nor encourage the intake of recycled materials.

“In relevant legislation,[the EU]should consider introducing binding recycling targets for individual critical raw materials and realistic collection and recovery targets for waste containing critical raw materials,” the ECA suggests.

The auditors also suggest that the EU should facilitate the commercial viability of critical raw material recycling operations by easing imports into the EU and intra-regional movement of waste containing critical raw materials.

“Currently, 10 key substances needed for the energy transition are not recycled at all, and most of the targets implemented by the EU do not encourage the recycling of specific individual substances,” said Pentas Rocimanus.

He pointed out that high processing costs, limited availability of materials, and technical and regulatory issues are also making the EU recycling sector less competitive, in contrast to China’s vertical integration, scale advantages and low labor costs.

“In times of heightened geopolitical tensions, the EU must step up its efforts. We must enable strategic partnerships, unlock the potential for reuse and recycling, and ensure that strategic projects supply EU industry rather than our competitors,” said Pentas Rocimanus.