The European Commission will present a new plan to break the EU’s dependencies on China for critical raw materials, President Ursula von der Leyen announced on Saturday.
The EU executive chief warned of “clear acceleration and escalation in the way interdependencies are leveraged and weaponized,” in a speech Saturday at the Berlin Global Dialogue.
In recent months, China has tightened export controls over rare earths and other critical materials. The Asian powerhouse controls close to 70 percent of the world’s rare earths production and almost all of the refining.
The EU’s response “must match the scale of the risks we face in this area,” von der Leyen said, adding that “we are focusing on finding solutions with our Chinese counterparts.”
Brussels and Beijing are set to discuss the export controls issue during meetings next week.
“But we are ready to use all of the instruments in our toolbox to respond if needed,” the head of the EU executive warned.
This suggests that the Commission could make use of the EU’s most powerful trade weapon — the Anti-Coercion Instrument.
This comes after French President Emmanuel Macron called on the EU executive to trigger the trade bazooka at a meeting of EU leaders on Thursday. His push has not met with much support from the other leaders around the table.
New breakaway plan
To break the EU’s over-reliance on China for critical materials imports and refining, the Commission will put forward a “RESourceEU plan,” von der Leyen said.
She did not provide much detail about the plan, nor when it would be presented. But she said it would follow a similar model as the REPowerEU plan that the Commission introduced in 2022 to phase out Russian fossil fuels after Moscow’s illegal invasion of Ukraine.
Under REPowerEU, the Commission proposed investing €225 billion to diversify energy supply routes, accelerate the deployment of renewables, improve grids interconnections across the bloc and boost the EU hydrogen market, among other measures. The EU executive also put forward a legislative proposal, which is currently under negotiations with the European Parliament and the Council, to ban Russian gas imports by the end of 2027.
The aim of RESourceEU “is to secure access to alternative sources of critical raw materials in the short, medium and long term for our European industry,” von der Leyen explained. “It starts with the circular economy. Not for environmental reasons. But to exploit the critical raw materials already contained in products sold in Europe,” she said.
She added that the EU “will speed up work on critical raw materials partnerships with countries like Ukraine and Australia, Canada, Kazakhstan, Uzbekistan, Chile and Greenland.”
“Europe cannot do things the same way anymore. We learned this lesson painfully with energy; we will not repeat it with critical materials,” von der Leyen said.
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