MOTION FOR A RESOLUTION on tackling China’s critical raw materials export restrictions – B10-0331/2025

B10‑0331/2025

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 the upcoming EU-China summit planned for 24 and 25 July 2025,

– 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[1], 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[2] (Net-Zero Industry Act),

– having regard to the G7 Leaders’ statement on the G7 Critical Minerals Action Plan,

– having regard to the Commission communication of 26 February 2025 entitled ‘The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation’ (COM(2025)0085),

– having regard to the clean trade and investment partnerships being negotiated by the EU, and to the EU’s critical raw material partnerships,

– having regard to the 13th EU-China Strategic Dialogue, which took place 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 World Trade Organization (WTO) rules, in particular the principles of non-discrimination and of transparency regarding export restrictions,

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

A.  whereas on 4 April 2025, China started to apply export restrictions on seven rare earth elements (REEs) and permanent magnets, introducing a system of non-automatic licences, and cited dual-use and security considerations as justification;

B.  whereas the list of items covered by the restrictions includes medium and heavy REEs (samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium) and finished permanent magnets made from these; whereas the restrictions introduced by China heavily impact a wide range of sectors, for instance electronics and consumer tech, green energy and renewables, the automotive industry, aerospace and healthcare;

C. whereas China introduced this export licensing system in response to the US tariff increases following President Trump’s ‘Liberation Day’, which in China’s case resulted in a tariff of 145 %;

D.  whereas the global REE supply chain is heavily concentrated in China, which has control of around 75 % of mining output and of 85 % of processing capacity, reaching more than 95 % in the case of some REEs such as terbium, yttrium and dysprosium;

E.  whereas the licensing system not only applies to exports to the United States but to all countries; whereas the EU is almost entirely dependent on China for the supply of heavy REEs; whereas the EU covers 98 % of its demand for permanent magnets with imports from China;

F.  whereas the seven targeted REEs and the associated permanent magnets are used in numerous technologies, including strategic ones, such as electric vehicles, wind turbines, advanced defence systems, and magnetic resonance imaging and lasers for medical applications; whereas China’s licensing procedure requires applicants to disclose sensitive information, and this might even amount to disclosing military secrets;

G.  whereas the implementation of these export restrictions has already begun to have detrimental effects on industry in the EU, including the automotive industry, with as many as 17 assembly lines experiencing temporary shutdowns in May 2025, and could soon also impact the healthcare sector;

H.  whereas REEs are used for critical technologies in the defence sector, such as precision guided weapon systems, drones and communication satellites, but also in certain types of engine – for example, in aircraft and nuclear submarines;

I.  whereas in April 2024, the EU adopted the CRMA with the aim of improving the resilience and autonomy of Europe’s supply of critical raw materials (CRMs), including strategic raw materials (SRMs); whereas the CRMA contains dedicated provisions addressing both supply- and demand-side considerations, in particular with a view to achieving resource efficiency and moderating the EU’s consumption of CRMs, and substituting SRMs;

J.  whereas circularity is at the core of the CRMA, with a dedicated benchmark aimed at covering 25 % of the Union’s SRM needs through recycling by 2030 and the objective of recycling substantially larger amounts of each SRM from waste; whereas the CRMA also includes dedicated provisions aimed at facilitating and accelerating the circularity of permanent magnets, with a possible minimum share of recycled content in permanent magnets entering the EU market;

1.  Expresses strong concern about China’s decision to apply REE export restrictions; considers that China’s action represents a very serious escalation in the generalised trade tensions and has a coercive intent, building on the enormous leverage that its quasi-monopolistic position on the global market provides;

2.  Highlights that China is clearly using these export restrictions to maximise leverage within a short timeframe; stresses, however, that the EU should not make any concessions during the forthcoming EU-China summit, or beyond, in exchange for any relaxation in the application of China’s export restrictions or for any exemptions; believes that any concessions to China in this respect would result in a loss of credibility for the EU as regards its ability to protect itself from coercion;

3.  Highlights the urgent need for the EU to build leverage by utilising pressure points where China is dependent on essential goods and technologies from the EU, with the aim of creating deterrence;

4.  Underlines China’s deliberate strategy of making use of export restrictions on critical input and technologies, and credible indications that China could place further restrictions on exports, including on light REEs or technologies for manufacturing electric batteries and refining lithium; considers, in light of this, that China cannot be a reliable source of input in critical sectors and encourages the Commission to stand firm on the path to de-risking, with a view to reducing demand and achieving the EU’s decarbonisation goals;

5.  Considers China’s action as demonstrating that it does not ‘walk the talk’ with regard to multilateralism and being a reliable partner that upholds the multilateral framework and rules; recalls that China already placed similar restrictions on exports of REEs in the early 2010s over territorial disputes in the South China Sea and that those measures were deemed to be in breach of WTO rules by the WTO Appellate Body;

6.  Welcomes the Critical Minerals Action Plan recently agreed by the G7, including its trusted partnership and standards‑based responsible sourcing dimensions; highlights the importance of developing trusted source standards for strategic sectors and projects, as an important element of resilience;

7.  States that China’s unilateral export restrictions on a set of materials that, while limited in number, are nevertheless essential, is another clear indication of the need for the EU to adopt a strategic stance on key resources, including raw materials, to strengthen economic and social resilience and reduce the risk of weaponisation of dependences by non-EU countries; stresses that this strategic stance should encompass the need to ensure resource efficiency, which should be mainstreamed across EU and national policies; underlines the even more pressing urgency of becoming resilient due to the new situation of an unstable and tense global trade outlook;

8.  Stresses, in particular, that reducing demand for virgin REEs is the most effective and sustainable strategy for lowering the EU’s exposure to geopolitical and environmental risks associated with primary extraction;

9.  Underlines that the CRMA’s main objectives include moderating consumption of critical and strategic raw materials, with a view to improving the Union’s resilience and strategic autonomy; urges, in this regard, the Commission and the Member States to take due account of resource efficiency at every stage of public policies relating to permanent magnets, along all civilian and military supply chains, in particular where public financial support is involved;

10.  Underlines the important role of research and innovation in reducing dependence on REEs by developing substitution, which also falls under the scope of potential strategic projects under the CRMA; calls on the Commission to dedicate a sufficient amount of funding under the current multiannual financial framework and its successors;

11.  Underlines that raw material circularity is a key priority and is at the core of the EU’s strategy to improve strategic autonomy, economic de-risking and long-term sustainable competitiveness; calls on the Commission and the Member States to accelerate the implementation of circularity measures enshrined in the CRMA, in particular the adoption of national measures, and to pay particular attention to REEs and permanent magnets as they do so; insists, in particular, on the need to take due account of circularity requirements in the product design phase and to promote direct reuse and standardisation to further facilitate the achievement of this objective;

12.  Believes that the designation ‘strategic project’ under the CRMA must be a reliable label of confidence for investors and citizens and be based on the highest possible social and environmental standards; remains concerned about the insufficient transparency of the selection process and the lack of public information about it, in particular with regard to the implementation of social and environmental sustainability, the monitoring, prevention and minimisation of environmental impacts and meaningful engagement with local communities and relevant social partners; is concerned about potential clashes between the EU’s labelling of strategic projects and the United Nations Framework Classification for Resources (UNFC) classification system, which provides an international standard for the classification of mineral resource projects, including their socio-economic viability; stresses the importance of enforcing the CRMA requirement for project promoters to provide information about the implementation of projects via their websites;

13.  Underlines the increased relevance of critical raw material partnerships with mineral-rich countries outside the EU, including developing countries, as a way of reducing dependence on China; stresses the importance of developing true win-win partnerships and strategic projects in relation to strategic raw materials, respecting high sustainability and human rights standards, including the principle of free, prior and informed consent, and creating added value in the country of origin, such as by prioritising integrated projects covering several steps in the transformation of raw materials over extraction-only;

14.  Is concerned about Parliament’s lack of involvement prior to the signing of Memoranda of Understanding (MoUs) on CRMs and the associated roadmaps, which has negative consequences, such as those observed in the case of the MoU with Rwanda; insists on the need to move towards binding agreements on CRMs to ensure both long-term security with regard to the EU’s supply and public scrutiny;

15.  Calls on the Commission, in coordination with the Member States, to assess the minimum level for the EU of strategic stocks of REEs listed as SRMs (neodymium, praseodymium, terbium, dysprosium, gadolinium, samarium and cerium) and the corresponding end-use applications, including those linked to the defence industry, and to report to Parliament thereon; highlights the CRMA provisions on monitoring CRM supply risks and conducting stress tests for SRMs and on the monitoring dashboard, which should be regularly updated and published and include general suggestions for suitable mitigation strategies to decrease supply risk; urges the Commission to swiftly put this dashboard mechanism into operation;

16.  Calls on the Member States, with a view to swiftly implementing the relevant CRMA provisions, to request that large companies operating in strategic sectors duly and regularly carry out a risk-preparedness exercise to assess and mitigate the risk of SRM supply shortages, including via stockpiling, in particular in the case of supply chains that are closely linked with and dependent on permanent magnets; highlights, in this regard, the importance of including companies linked with the manufacture of defence equipment;

17.  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 governments and parliaments of the Member States and the Government and Parliament of the People’s Republic of China.