Economy

Can EU’s New China Channel Secure Rare Earths for EV Makers and Tech Giants?

EU and China create a channel to speed rare earth exports, after China’s controls caused supply concerns.

byAndres Castro

November 5, 2025, 6:55 PM

Robotic arms on an automated production line transporting EV battery modules.

Robot arms transport battery modules on an automated line. By IM Imagery / Shutterstock.com.

Executive Summary

The European Union has established a “special channel” with Chinese authorities to ensure the continued supply of rare earth materials critical for EU industries, following China’s export controls.

This communication channel facilitates cooperation to review and fast-track export permits for European companies, with just over half of approximately 2,000 applications already approved.

The EU is actively pressing Beijing for swifter processing of remaining applications while also diversifying its supply chain, including developing new European sources and discussing general export licenses.

The Story So Far

The European Union has established a special communication channel with Chinese authorities to ensure continued rare earth supplies because China implemented export controls earlier this year, raising concerns about potential disruptions to critical EU industries such as electric vehicle and wind turbine manufacturing. This action is part of the EU’s broader strategy to reduce its reliance on China and diversify its rare earth supply chain.

Why This Matters

The European Union’s establishment of a “special channel” with China aims to mitigate immediate supply disruptions of critical rare earth materials for EU industries like electric vehicles and wind turbines, by fast-tracking export permits. However, the EU is simultaneously pressing for swifter processing of existing applications and actively diversifying its supply chain, including developing domestic production, highlighting a broader strategic effort to reduce long-term dependence on China for these essential resources.

Who Thinks What?

The European Union, through Trade Commissioner Maros Sefcovic, is concerned about China’s rare earth export controls potentially disrupting EU manufacturing and has established a “special channel” with Chinese authorities to ensure continued supply and fast-track export permits, while also working to diversify its supply chain.

Chinese authorities have implemented export controls on rare earth materials but are cooperating with the EU through a dedicated communication channel to review and prioritize export applications from European companies.

The European Union has established a “special channel” of communication with Chinese authorities to ensure the continued supply of rare earth materials critical for EU industries, according to EU Trade Commissioner Maros Sefcovic. The initiative comes in response to China’s export controls on rare earths, introduced earlier this year, which raised concerns in Europe regarding potential disruptions to the manufacturing of electric vehicles, wind turbines, and other advanced technologies.

Addressing Supply Concerns

Commissioner Sefcovic stated on Wednesday that he has engaged in multiple discussions with Chinese Commerce Minister Wang Wentao. During these talks, Sefcovic emphasized that poorly managed export procedures could severely impact production and manufacturing within the EU.

The new communication channel facilitates cooperation between officials from both sides to review and fast-track export permits for rare earth materials. Brussels and Beijing have agreed to prioritize applications from European companies.

Application Progress and Diversification Efforts

Since the implementation of China’s export controls, European firms have submitted approximately 2,000 applications to Chinese authorities. Sefcovic reported that just over half of these applications have already received approval.

The EU is actively pressing Beijing for swifter processing of the remaining applications while simultaneously working to diversify its supply chain. This includes developing new sources within Europe, such as rare-earth and magnet production facilities in Estonia. The EU Commission also discussed general licenses with Chinese officials to streamline rare earth exports, mirroring agreements the United States has reportedly secured.

Broader Context

Sefcovic made these remarks in Kuwait, where he was attending the 2025 GCC-EU Business Forum. The EU’s move to secure rare earth supplies is part of a broader global effort, as the European Union, the U.S., and other nations race to build alternatives to the predominantly Chinese rare earth supply chain. A series of deals with Europe and the U.S. earlier this year had already eased some of the initial supply crunch.