\n<\/p>\n
The EU is considering legally forcing industries to reduce purchases from China to insulate Europe from future hostile acts, the industry commissioner, St\u00e9phane S\u00e9journ\u00e9, says.<\/p>\n
He made his remarks as the European Commission unveiled a \u20ac3bn (\u00a32.63bn) strategy to reduce its dependency on China for critical raw materials amid a global scramble caused by Beijing\u2019s \u201cweaponisation\u201d of supplies of everything from chips to rare earths.<\/p>\n
The ReSourceEU programme will seek to de-risk and diversify the bloc\u2019s supply chains for key commodities with a funding initiative to support 25-30 strategic projects in the sector.<\/p>\n
It will include new rules to stop scrap aluminium leaving the bloc, recycling of magnets used in car batteries and a new \u20ac2bn a year fund backed by the European Investment Bank to support industries diversifying away from cheap Chinese supplies.<\/p>\n
Underlining the threats posed by over dependency on China, S\u00e9journ\u00e9 <\/strong>said if industry did not respond, the commission reserved the right to introduce legislation.<\/p>\n \u201cWe would force European companies legally to diversify their sources of supply. That is not the case now, and it is not what is proposed in the plan [ReSourceEU] but this is a wake up call, a strong wake up call,\u201d said S\u00e9journ\u00e9.<\/p>\n The EU said the strategy was designed to reduce the impact of \u201cmarket shocks\u201d such as the disruption to the car industry caused by the recent, now lifted, ban on exports of chips by China in response to the Dutch government taking control of the Chinese-owned chip firm Nexperia.<\/p>\n The EU trade commissioner Maro\u0161 \u0160ef\u010dovi\u010d said Brussels remained committed to the concept of open access to its markets but that was being repeatedly exploited to the disadvantage of European industry, leaving it \u201cfire fighting\u201d a succession of crises.<\/p>\n S\u00e9journ\u00e9 said that \u201cfor the time being\u201d the EU wanted to \u201cremind\u201d companies as part of the strategy, procurement bosses must communicate with their board of directors on \u201chow they plan to diversify\u201d.<\/p>\n \u201cThis is a way for us to gently encourage them to diversify \u2026 if this were not the case \u2026 We reserve the right to use legislation to simply oblige companies to diversify a certain percentage of their supplies,\u201d he said.<\/p>\n Senior EU officials said that \u201cwhile the direction is clear\u201d there was a need to \u201caccelerate the process\u201d as China continued to \u201cweaponise\u201d its hold on raw materials for \u201cgeopolitical purposes\u201d.<\/p>\n To kickstart the implementation of the strategy, two projects, a molybdenum extraction in Greenland and a lithium mine in Germany will get immediate funding.<\/p>\n The EU will also look at financial support to enable companies to buy from more expensive sources than China and it will set up a \u201craw materials platform\u201d that will pool company orders and build joint stockpiles.<\/p>\n New restrictions will be introduced on scrap exports in 2026 of the metal and of scrap copper if necessary.<\/p>\n <\/span>Demand for lithium is expected to increase nearly sixtyfold by 2050. More than 78% of the EU\u2019s lithium needs in 2020 came from Chile. <\/span> Photograph: Luis Bustamante\/The Guardian<\/p>\n Illustrating the scale of the reliance on Beijing, EU officials revealed that the bloc buys about 20,000 tonnes of permanent magnets a year, used in everything from car and fridge doors to MRI machines.<\/p>\n skip past newsletter promotion<\/p>\n Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n Of that, \u201c17,000 to 18,000\u201d tonnes come from China, 1,000 are produced in the EU with the remainder from other countries.<\/p>\n Up to \u20ac3bn in funding will be mobilised within the next 12 months, with \u20ac2bn a year made available by the European Investment Bank in the form of loans, venture debt and private debt plus financing such as loans already issued to a Finnish lithium mine project Keliber.<\/p>\n This dwarfs the \u00a350m announced last month by Keir Starmer for a similar initiative in the UK.<\/p>\n Efforts by the US, the EU and the UK to reduce dependency on China for supplies took on a fresh urgency in October when China threatened to introduce fresh global restrictions exports of rare earths from December.<\/p>\n That threat was lifted as part of the tariff deal struck between Xi Jinping and Donald Trump in South Korea six weeks ago, but the reprieve holds for only 12 months, preserving China\u2019s future leverage on supply chains.<\/p>\n Europe\u2019s only lithium hydroxide factory, operated by AMG Lithium in Germany, cost \u00a3150m to build, and the company was already in the mining business.<\/p>\n Earlier this year, its chief executive, Stefan Scherer, said that the EU might as well \u201capply to be a province of China\u201d so little was being done in practice to cut reliance.<\/p>\n Quick Guide<\/span><\/p>\n <\/span>Show<\/span><\/span><\/p>\n The best public interest journalism relies on first-hand accounts from people in the know.<\/p>\n If you have something to share on this subject, you can contact us confidentially using the following methods.<\/p>\n Secure Messaging in the Guardian app<\/strong><\/p>\n The Guardian app has a tool to send tips about stories. Messages are end to end encrypted and concealed within the routine activity that every Guardian mobile app performs. This prevents an observer from knowing that you are communicating with us at all, let alone what is being said.<\/p>\n If you don’t already have the Guardian app, download it (iOS\/Android) and go to the menu. Select \u2018Secure Messaging\u2019. <\/p>\n SecureDrop, instant messengers, email, telephone and post<\/strong><\/p>\n If you can safely use the Tor network without being observed or monitored, you can send messages and documents to the Guardian via our SecureDrop platform.<\/p>\n Finally, our guide at theguardian.com\/tips\u00a0lists several ways to contact us securely, and discusses the pros and cons of each.\u00a0<\/p>\n Illustration: Guardian Design \/ Rich Cousins<\/p>\n Thank you for your feedback.<\/p>\n","protected":false},"excerpt":{"rendered":" The EU is considering legally forcing industries to reduce purchases from China to insulate Europe from future hostile acts, the industry commissioner, St\u00e9phane S\u00e9journ\u00e9, says. He made his remarks as the European Commission unveiled a \u20ac3bn (\u00a32.63bn) strategy to reduce its dependency on China for critical raw materials amid a global scramble caused by Beijing\u2019s<\/p>\n","protected":false},"author":1,"featured_media":35889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[2153,3146,13292,20146,1094,19907,1533],"class_list":{"0":"post-35888","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-china","9":"tag-forcing","10":"tag-industries","11":"tag-legally","12":"tag-mining","13":"tag-purchases","14":"tag-reduce"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/35888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=35888"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/35888\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/35889"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=35888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=35888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=35888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Contact us about this story<\/h4>\n