EU unveils ‘double act’ plans to cut China dominance of critical supply lines for minerals, clean tech

One procurement proposal could slash Chinese exports as bloc would not rely on any third country commanding over 65 per cent market share

‘The pandemic and war have taught us a bitter lesson about our dependencies,’ says European Commission President Ursula von der Leyen

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Frans Timmermans, the EU’s climate chief, gives a press conference on the Net-Zero Industry Act in Brussels on Thursday. Photo: EPA-EFE

Published: 2:15am, 17 Mar 2023Updated: 3:01am, 17 Mar 2023

The European Union has unveiled plans to cut China’s dominance of its critical supply lines, with officials warning that the clock is ticking for Europe to kick-start its industries of the future.

Chinese firms could see their exports to the EU slashed under proposed procurement rules that would put the squeeze on clean-tech providers from countries commanding market shares of greater than 65 per cent.

For critical minerals like rare earths, lithium and magnesium – which are utterly dominated by China – the EU would avoid being reliant on any third country for more than 70 per cent of its supply.

“We now understand that the strategic choices China made a decade ago and outcome coming home to roost, and we also have to make our own strategic decisions now for the decades to come,” said Frans Timmermans, the bloc’s climate tsar, in Brussels on Thursday.

An employee works at a factory run by JL Mag Rare-Earth, which manufactures minerals, in China’s Inner Mongolia autonomous region in February. China is the world’s largest producer and consumer of rare earths. Photo: Xinhua

The European Commission proposed two new laws that would seek to put the turbo-boosters under its own industrial plans. This followed a loosening of state-aid rules last week that will allow Brussels to roll out subsidies to fund its digital and green transitions.