On tackling China’s critical raw materials export restrictions

B100330/2025

European Parliament resolution on tackling China’s critical raw materials export restrictions

(2025/2800(RSP))

The European Parliament,

–having regard to its previous resolutions on China,

–having regard to Regulation (EU) 2024/1252 of the European Parliament and of the Council of 11 April 2024 establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1724 and (EU) 2019/1020, also known as the Critical Raw Materials Act (CRMA),

–having regard to Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724 (Net-Zero Industry Act),

–having regard to the first 47 strategic projects in the EU and first 13 strategic projects outside of the EU approved under the CRMA,

–having regard to the European Council conclusions of 30 June 2023,

–having regard to the G7 Critical Minerals Action Plan announced on 17 June 2025 at the 51st G7 Summit in Kananaskis, Canada,

–having regard to the statement made by Commission President Ursula von der Leyen on 16 June 2025 at Session II (working lunch) on economic growth, security and resilience of the 51st G7 Summit in Kananaskis, Canada,

–having regard to the 13th EU-China Strategic Dialogue, held between the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy, Kaja Kallas, and the Chinese Foreign Minister, Wang Yi, in Brussels on 2 July 2025,

–having regard to the conclusions and recommendations contained in Mario Draghi’s report of 9 September 2024 entitled ‘The future of European competitiveness’,

–having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 20 June 2023 on ‘European Economic Security Strategy’ (JOIN(2023)0020), and to the speeches about de-risking given by Commission President Ursula von der Leyen at the European Policy Centre on 30 March 2023 and at the European Parliament on 18 April 2023,

–having regard to Rule 136(2) of its Rules of Procedure,

A.whereas on 4 April 2025, China abruptly tightened state controls on the export of 7 of the 17 rare earth elements –samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium – particularly those used for manufacturing permanent magnets; whereas controls also apply to NdFeB magnets, if they contain any dysprosium or terbium; whereas export volumes have reportedly been reduced by as much as 80 %;

B.whereas China first weaponised rare earths in 2010, when it restricted exports to Japan over a fishing dispute; whereas China has also applied extensive state controls to the export of raw minerals classified as strategic and/or critical under the CRMA, including gallium and germanium, since 1 August 2023, to antimony products since 15 September 2024, to tungsten and bismuth since 4 February 2025, and to scandium since 4 April 2025;

C.whereas exporters of materials subject to Chinese state export controls must apply for a dual-use licence, with the procedure requiring applicants to comply with intrusive demands for information by the Chinese authorities, including by providing the customer identity, the end-use purpose, and detailed technical specifications; whereas the application process is lengthy and is controlled by the Chinese Ministry of Commerce, and shipments have been halted in many Chinese ports because of the processing of export licence applications;

D.whereas recent Chinese export restrictions were initially believed to primarily be a response to growing trade tensions with the United States, including tariffs and US export controls, but the Chinese Government’s justification is that they are aimed at upholding national security and protecting national interests; whereas as a result of the EU’s significant dependence on China for these materials, EU companies face severe disruptions to their strategic supply chains for the production of goods for which critical raw materials (CRMs) are essential, including both everyday and strategic technologies, such as those used in automotive manufacturing, medicine, space and defence, including fighter jets, frigates, drones and other weapons systems, wind turbines and batteries, as well as the implementation of industrial policy and the green and digital transitions;

E.whereas China alone controls 90 % of the global market for essential raw materials used in downstream products such as rare earth permanent magnets; whereas the EU depends on China for almost 99 % of its supply of the 17 rare earths; whereas the EU depends on China for around 92 % of its supply of NdFeB magnets;

F.whereas China deliberately maintains this dependence by producing at below-market prices through policies of protectionism for its own state-sponsored industries; whereas controlling economically low value-added but strategically indispensable industries has been China’s strategy for decades, and this has been made possible by state subsidies, which have pushed competitors out of the market;

G.whereas Europe had its own magnesium production until around 2001, when it was displaced by Chinese low-cost magnesium; whereas the French group Rhône-Poulenc controlled roughly half of global rare earth processing until the mid-1980s; whereas Europe had its own gallium production in Germany until 2015, when Ingal Stade had to cease production because of Chinese dumping, and the company has regrettably not yet received funding to resume European gallium production, despite efforts in 2021;

H.whereas the EU has unexploited and/or formerly used sources of rare earths and CRMs in several Member States; whereas technological and regulatory bottlenecks, including permitting delays and visa restrictions for mining experts, prevent Europe from mobilising its own CRM base; whereas there is political will among the Member States to reduce these impediments, but implementation is hampered by a lack of sufficient financing, coordination and urgency;

I.whereas the United States has already implemented strategic measures expected to secure the full supply of military-use magnets from domestic sources by 2027, supported by Pentagon investments in mining;

J.whereas China’s updated export control framework of December 2024 gives greater discretionary powers to the Chinese Ministry of Commerce, the State Council and the Central Military Commission to subject items not formally listed as dual-use goods to export controls; whereas these new regulations include measures with extraterritorial applications that could lead to the further weaponisation of global supply chains to target foreign entities and individuals;

K.whereas the EU applies export controls to certain types of critical and advanced materials, but these controls are clearly focused on material types, with precise technical parameters relating to their use in specific military applications, do not affect trade in commercial non-sensitive products and account for only a small share of total exports of the materials in question;

L.whereas the EU intends to continue to reduce critical dependences and vulnerabilities, including in its supply chains, through de-risking and diversification, but does not intend to decouple from China;

M.whereas new markets can offer alternative supply sources for EU CRM imports via new trade agreements and CRM partnerships;

N.whereas the EU defines China simultaneously as a partner for cooperation, an economic competitor and a systemic rival; whereas China is, of its own accord, clearly shifting the core of EU-China relations towards systemic rivalry; whereas this competition and rivalry is not sought by the EU;

O.whereas the EU’s China strategy revolves around its policy of de-risking; whereas the EU has an interest in pursuing active and stable relations; whereas the EU wishes these relations to be built on the pillars of respect for international law and the principle of balanced reciprocal engagement and shared global responsibilities; whereas it is important to engage with China in order to address global challenges;

1.Strongly condemns China’s decision to impose restrictions on the export of a wide range of CRMs, and especially permanent magnets, to the EU, which has halted exports and significantly disrupted supply chains vital for automakers, defence manufacturers, semiconductor companies, green technologies, healthcare applications and many other sectors in the EU and across the world;

2.Is convinced that export controls should be part of a multilateral approach designed to protect international security and ensure a global level playing field, insists that unilateral controls must be limited to those made strictly necessary by national security considerations, with transparent and clearly defined rules, and calls on the Commission to continue dialogue with China in this regard;

3.Stresses the considerable risks associated with the requirement that European buyers provide certain information to the Chinese authorities when applying for export licences, in particular where this concerns information about their defence industrial base value chains, as this carries the risk of exposing trade and national security secrets to China;

4.Stresses its deep concern about China’s dominance in the value chains of CRMs and permanent magnets, accounting as it does for 98 % of the EU’s supply of rare earth elements and 60 % of its supply of CRMs, including the processing of 98 % of all gallium and 93 % of all germanium, as well as in many chemicals, including its provision of 80 % of the global supply of nitrocellulose used for ammunition-grade propellant, with all of these being essential to the EU’s rearmament and to the green and digital transitions; stresses that China maintains this position by producing below market price as a result of disproportionate and unfair state subsidies, requiring legislative and financial incentives to stimulate the uptake of non-Chinese materials by European industry;

5.Highlights that Europe has become entirely dependent on China for its digital and green transitions, and that this extends beyond the CRMs and permanent magnets that fall under the recent export restrictions and covers most net-zero technologies and infrastructure, from solar inverters, batteries, solar panels and wind farms to 5G infrastructure; expresses deep concern that the software used in those technologies can be controlled remotely from Beijing, which constitutes an unacceptable risk to the EU’s digital and energy security and creates a lock-in effect, leaving the EU reliant on high-risk Chinese vendors for servicing and maintenance;

6.Considers China’s restrictions to be an unjustified weaponisation of its CRM supply lines, rendering it an untrustworthy CRM vendor that harms European economic and essential security interests by hampering the production of defence equipment, such as munitions, missiles, aircraft, unmanned aerial vehicles, and radar, sensor and communication technologies, thereby deliberately and strategically undermining Europe’s deterrence, threatening the fulfilment of its urgent need to rearm and causing deindustrialisation, especially in areas that require CRMs and permanent magnets; stresses that further restrictions will only widen the rearmament gap, enabling China and Russia to strengthen their military capabilities much faster than Europe;

7.Recalls the importance of implementing the CRMA in order to strengthen the EU’s strategic raw materials value chain; recalls the clear and ambitious benchmarks set in the CRMA to boost EU capacities to extract, process and recycle CRMs domestically by 2030; welcomes the Commission’s swift assessment and selection of 47 strategic projects, across 13 EU Member States, that will be granted a streamlined permitting procedure and access to finance;

8.Believes in the crucial importance of diversifying CRM imports to strengthen the resilience of the EU’s supply chain; recalls the benchmark set in the CRMA that no more than 65 % of the EU’s annual consumption of any given CRM should be sourced from a single non-EU country; welcomes, in that regard, the recent selection of 13 strategic projects outside the EU, which are aimed at securing access to raw materials and supporting local value creation.

9.Deeply regrets the fact that the CRMA did not come with a dedicated EU budget, given that adequate funding is the main bottleneck hindering progress on these and other projects; is concerned that most projects will not come to fruition within 10 years, and that the current trajectory will not produce results quickly enough; underlines the importance of including adequate financial resources for the CRMA in the multiannual financial framework to reflect the need to support domestic production and processing; believes that the Commission and the Member States underestimate the urgency of defusing the risks associated with dependence on Chinese CRMs, thereby endangering the green and digital transitions and European rearmament;

10.Calls on the Commission to respond to the Chinese export controls with countermeasures, which could range from imposing restrictions on the export of strategic goods for which China is dependent on the EU to using Chinese access to the EU market as leverage, thereby limiting access for high-risk Chinese vendors of, for example, solar inverters, AI tools, solar panels and other products;

11.Calls on the Commission to further engage in negotiations with the Chinese Government with a view to establishing a general licence for certain industries and countries to achieve a stable solution for the trade in critical raw materials and their derivatives, which are essential to European economic and security interests; believes that China is using these export restrictions to strengthen its negotiating position in order to achieve EU concessions in other trade sectors; stresses that the EU should not make any concessions at the upcoming EU-China summit and believes that doing so would undermine the EU’s credibility in repelling Chinese trade coercion; calls into question the possibility of reaching a fair and sustainable solution with China;

12.Calls for the Commission and the Member States to take decisive action that combines promotion, protective and partnering measures to accomplish a de-risked CRMs value chain by 2030; stresses that promotion measures are needed to generate supply outside of China and that these should be followed by protective measures to avoid a situation in which China abuses its monopoly position to undercut vulnerable competitors;

13.Calls on the Commission to establish a CRM fund to invest in research, innovation and the development of local and foreign talent to help the EU and its partners to overcome key (technical) capability gaps and attract foreign talent to fill critical knowledge gaps in the short term;

14.Calls on the Member States to urgently fund the strategic projects approved under the CRMA, as well as other projects, both inside and outside the EU, that contribute to de-risking with regard to China and to achieving European benchmarks in mining, refining, processing and recycling; urges the Member States to consider CRM sectors as forming part of the defence industrial base, thereby ensuring that public investments in these sectors count towards the NATO target of 1.5 % of GDP annually; notes with regret that Ingal Stade, a Germany-based firm that was the largest gallium producer outside China until 2015, when it ceased production as a result of Chinese dumping, has not received sufficient funding to resume gallium production;

15.Calls on the Commission to further expedite permitting procedures beyond the CRMA, extending the ‘overriding public interest’ of these projects to introduce other legislative derogations that contribute to speedy permitting and legal certainty;

16.Calls on the Commission and the Member States to encourage, through their public procurement, the use of components and raw materials produced in the EU and partner countries, including permanent magnets in engines for fighter jets, frigates and submarines, and to disincentive the use of subsidised components from China or Russia in tender procedures; calls for a G7+ security standard in public procurement to enable EU and partner governments to stimulate production in and procurement from trusted partners;

17.Calls on the Commission and the Member States to move towards a posture of strategic indispensability and fully implement the European economic security strategy while actively building on the de-risking strategy of recent years, to expand their trade defence instruments, to actively use foreign direct investment screenings to counter high-risk Chinese investments in the CRM value chain, and to exchange information and take joint action with trusted partners such as Japan, South Korea, Canada, the United Kingdom and other G7 members, as well as making use of the World Trade Organization legal framework where necessary;

18.Calls on the Commission to introduce stockpiling targets for CRMs to protect the EU against the immediate effects of supply disruptions, stressing that this can be especially helpful for critical sectors such as the defence industrial base;

19.Recalls the importance of all Member States pursuing a unified China policy; stresses that the current global economic and geopolitical reality requires the EU to urgently conclude trade agreements that feature enhanced trade access to CRMs, such as with Mercosur and Australia, to establish more critical raw material partnerships and to cooperate and coordinate with trusted partners; underlines the importance of the Global Gateway initiative as a tool to advance investments in CRM infrastructure abroad;

20.Calls on the Commission to carry out a cost-benefit analysis of the added value that responsible deep-sea and asteroid mining could bring in terms of de-risking from Chinese CRMs, taking into consideration the environmental risks;

21.Instructs its President to forward this resolution to the Council, the Commission, the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy, the Member States and the People’s Republic of China.