Economy

EU Secures Rare Earths: How a New China Channel Shields Tech from Supply Shocks

EU sets up a special channel with China to ensure rare earth supplies after export controls.

November 5, 2025, 6:20 PM

Large, old mining haul truck loaded with rocks in a quarry extraction site.

An old, oversized haul truck is loaded with rare earth minerals in an open-pit quarry. By Maksim Maksimovich / Shutterstock.com.

Executive Summary

The European Union has established a “special channel” of communication with Chinese authorities to ensure a consistent supply of rare earth materials.

This initiative aims to expedite export permits for EU companies following China’s earlier implementation of export controls on these critical materials.

Alongside the special channel, the EU is also pursuing long-term strategies to diversify its rare earth supply, including developing new sources within Europe.

The Story So Far

The European Union has established a “special channel” with Chinese authorities due to China’s implementation of export controls on rare earth materials earlier this year. These materials are critical for EU industries, including the production of electric vehicles and wind turbines, and the controls sparked significant concern over potential supply chain disruptions vital for the bloc’s green and digital transitions.

Why This Matters

The European Union’s establishment of a “special channel” with Chinese authorities is a direct response to China’s rare earth export controls, aiming to mitigate immediate supply chain risks that could disrupt European production of critical technologies like electric vehicles and wind turbines. This initiative is crucial for safeguarding the EU’s green and digital transitions, though it simultaneously highlights Europe’s ongoing reliance on China for these vital materials even as it pursues long-term diversification strategies.

Who Thinks What?

The European Union, through its Trade Commissioner Maros Sefcovic, is concerned about potential disruptions to the supply of critical rare earth materials due to China’s export controls and has established a “special channel” to ensure consistent supply, expedite export permits, and mitigate negative impacts on EU manufacturing, while also pursuing long-term diversification strategies.

Chinese authorities introduced export controls on rare earth materials but have agreed to collaborate with the EU through a new “special channel” to review and expedite export permits for European companies, prioritizing their applications to address European supply chain concerns.

The European Union has established a “special channel” of communication with Chinese authorities to ensure the consistent supply of rare earth materials critical for EU industries. EU Trade Commissioner Maros Sefcovic announced the initiative on Wednesday, following China’s introduction of export controls earlier this year, which had sparked concerns in Europe over potential disruptions to the production of key technologies like electric vehicles and wind turbines. Sefcovic, speaking in Kuwait, emphasized the necessity of efficient export procedures to prevent negative impacts on European manufacturing.

Addressing Supply Chain Concerns

China’s export controls on rare earths, implemented earlier this year, prompted significant worry among European manufacturers reliant on these materials for permanent magnets and other high-tech components. The EU’s proactive engagement seeks to mitigate these supply chain risks, which are vital for the bloc’s green and digital transitions.

Commissioner Sefcovic confirmed that he has held multiple discussions with Chinese Commerce Minister Wang Wentao regarding the issue. He stressed that poorly managed export procedures could have a “very negative impact on production and manufacturing in the EU.”

New Communication Mechanism

Through this new communication channel, officials from both sides are now collaborating to review and expedite export permits for European companies. Brussels and Beijing have agreed to prioritize applications from European firms.

Since the controls took effect, European firms have submitted approximately 2,000 applications to Chinese authorities, with just over half reportedly approved. The EU continues to press Beijing for quicker processing of the remaining applications, while also pursuing long-term strategies to diversify its supply.

These diversification efforts include developing new sources within Europe, such as rare-earth and magnet production in Estonia. The establishment of this special channel follows earlier discussions between EU and Chinese officials about implementing general licenses to streamline rare earth exports, similar to arrangements the United States has secured.

Strategic Resource Management

The creation of this dedicated communication channel underscores the EU’s strategic efforts to safeguard its industrial supply chains against geopolitical risks. By engaging directly with Beijing and simultaneously exploring domestic and alternative sources, the EU aims to secure its access to vital rare earth materials, crucial for its economic stability and technological independence.