The European Union needs to create a joint strategic reserve of rare earth elements to avoid supply chain disruptions and economic blackmail from China, Stephane Sejourne, European Commissioner for Prosperity and Industrial Strategy, has told German business daily Handelsblatt.
“Nowadays, all European countries have strategic reserves for oil and gas. We should do the same for strategic raw materials,” Sejourne told the German newspaper in an interview published on Monday.
The reserve would make the EU more resilient in the face of Chinese restrictions of exports of rare earths or high-performance magnets, which are key for the automotive and defense industries, the commissioner said.
In April, China added seven rare earth elements and related products to its export control list, making it mandatory for exporters to obtain licenses regardless of the end customer’s nationality. While some licenses have been granted, the complex and lengthy approval process has caused confusion at customs and raised alarms among European Union manufacturers.
Earlier this month, the European Commission approved the first list of 13 Strategic Projects on strategic raw materials located outside of the EU. These projects include strategic raw materials essential for electric vehicle, batteries and battery storage, like lithium, nickel, cobalt, manganese, and graphite, as well as extraction of rare earth elements, which play a key role in producing high-performance magnets.
The EU will issue further calls for projects this year, Sejourne told Handelsblatt, adding that the bloc must act as its competitors do and use preferential EU policies, state aid, and controls on foreign investments to protect itself in a potential trade war.
Last month, China said it was considering easing its recently imposed export restrictions on rare earth elements for European semiconductor companies.
Earlier this month, China signaled it would consider accelerating the approval of rare earths exports to the EU.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- Oil Prices Poised to Soar After U.S. Attacks Iran Facilities
- Why Big Oil Isn’t Afraid of Peak Oil Demand
- Oil Rises 3% After U.S. Bombs Iranian Nuclear Sites
