EU ‘pulling out all stops’ with minerals projects as it tries to avert China trade war

The European Union has announced a sweeping initiative to bolster its supply chain for critical raw materials, unveiling support for 46 strategic projects that span lithium, gallium and rare‑earths production across the bloc. Industry commissioner Stéphane Séjourné warned that the EU could face a “crisis in the coming months” as trade tensions with China intensify, and stressed that the bloc is “pulling out all the stops” to avert a potential trade war that could disrupt multiple sectors. The projects, collectively costing €21 billion, are intended to accelerate the availability of essential inputs for the automotive, defence and renewable‑energy industries, and are being fast‑tracked through accelerated permitting and financing arrangements. Séjourné highlighted three emblematic ventures: a rare‑earths plant near Pau in southwestern France that will produce dysprosium and terbium—materials for which the EU is almost wholly dependent on China—expected to be operational by late 2026 and capable of supplying roughly 15 % of global output; an already‑running gallium plant in Greece; and the Keliber lithium extraction and processing facility in Finland, which received €150 million from the European Investment Bank. These projects form the second batch of “flagship” initiatives under the Critical Raw Materials Act of 2024, a legal framework that obliges the Commission to cut the EU’s reliance on foreign sources.

The drive to secure a domestic value chain is motivated by both geopolitical and economic imperatives, as the EU seeks to shield itself from China’s “unsustainable” £1 billion‑a‑day trade surplus and the risk of export restrictions similar to those imposed on Japan in 2011. By granting flagship status, the Commission does not provide direct funding but enables faster permitting and helps mobilise capital, a crucial step given the criticism that the current scheme falls short of the EU’s 2030 targets—to mine 10 % of its needs, process 40 % and recycle 25 % domestically. Industry voices have expressed concern that the measures are insufficient; a coalition of 23 of the 60 projects designated strategic in 2025 wrote to the Commission urging urgent action to unlock financing for projects at the final investment decision stage, which face acute liquidity pressures. The French lithium refiner Viridian Lithium, which had received strategic status in 2025, entered judicial liquidation in March, underscoring the fragility of the sector and the need for robust support mechanisms.

Member states have already pledged €1 billion for six of the newly approved projects, while the European Investment Bank has earmarked an additional €660 million for eight, signaling a concerted effort to translate policy into tangible capacity. The EU’s approach mirrors Japan’s successful reduction of its dependence on Chinese rare‑earths—from 90 % to 60 % since 2011—by diversifying supply sources and building domestic processing capabilities. As trade commissioner Maroš Šefčovič continues negotiations in Beijing to temper China’s trade surplus, the accelerated rollout of these strategic projects aims to create a resilient European supply chain that can weather geopolitical shocks and sustain the bloc’s green‑transition ambitions. The outcome of these efforts will shape the EU’s ability to meet its 2030 raw‑material targets, influence global market dynamics, and determine whether Europe can secure a foothold in the rapidly expanding market for clean‑technology inputs.

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