Recently, the domain of resource economics has been shaped by headlines arguing about potential acquisitions and invasions of Greenland by the US. As the EU is taking a clear stance behind Greenland in this rather geopolitical discussion, it leaves one question of increasing importance open: How is the EU itself positioned from a resource economic perspective, and what impacts might varying strategic decisions have on the future of our economy as a whole? This briefing examines Europe's deep structural dependency on imported critical raw materials (CRMs), the strategies being pursued to address it, and the geopolitical conflicts of interest that threaten to complicate the paths forward.
The existential importance of resource economics for Europe
The EU's ambitions in its mission to reach climate neutrality, build out its digital leadership, and modernise its military defence all have one thing in common: they require minerals it does not control. Lithium, cobalt, nickel, copper, and other rare earth elements (REEs) form the foundations of key technologies, such as wind turbines, solar panels, EVs, and semiconductors. For the EU to realistically achieve its 2030 targets, it requires vastly growing quantities of such minerals; e.g., each megawatt of offshore wind alone demands an estimated 15 tonnes of minerals, according to the World Economic Forum.
Yet, the EU's own extraction and processing capacity remains tight, as even if all announced mining projects continue according to plan, they would raise European output by around 9% for copper & nickel and 2% for cobalt by 2030. Recycling can partially fill the gap, but recovery rates for REEs remain below 1%. The European Commission itself has acknowledged that market forces alone are incapable of delivering the speed and scale of diversification required.
Where the EU currently sources its critical materials
China is by far the EU's most significant supplier across the CRM value chain. Producing approximately 70% of the world's rare-earth oxides and supplying around 70% of Europe's rare-earth imports, China also controls more than 90% of downstream processing for permanent magnets. As the EU sources 98% of its rare-earth magnet demand from Chinese suppliers — an essential component for EV motors, turbines, and defence applications — a direct structural dependency of Europe on China is evident.
China single-handedly leads in 19 out of 20 strategic energy-related materials, with merely Indonesia surpassing it in nickel refinement. Besides the EU's heavy dependence on China, the war in Ukraine has exposed a second layer of resource vulnerability. Russia remains an unsanctioned supplier of nickel, titanium, and palladium, with Russian nickel still accounting for ~15% of the EU's nickel imports, and Ukraine, once envisioned as a key diversification partner back in 2021, now having over 50% of its critical mineral deposits under Russian occupation, Europe finds itself losing access to the very resources that could have reduced its dependence on Beijing. With Ukraine currently accounting for a mere 2% of the EU's CRM imports in 2023, and the US simultaneously pursuing its own minerals for a security deal with Kyiv, the war has not only disrupted an existing route but also foreclosed what may have been Europe's most geographically convenient path toward resource sovereignty.
The EU's strategy for future resource sourcing
In December 2025, the EC adopted the RESourceEU action plan, its most ambitious resource security initiative to date. Based on the REPowerEU, an energy diversification plan launched after the Russo-Ukrainian invasion, RESourceEU aims to ensure that at least 10% of strategic raw materials are extracted within the EU by 2030, 40% are being processed domestically, 25% are sourced from recycling, and lastly, a dependency cap on any single country at no more than 65% for any strategic material is imposed.
Moreover, 15 strategic partnerships with resource-rich countries, including Ukraine, Australia, Canada, Kazakhstan and Greenland, on top of plans to launch negotiations with Brazil have been announced alongside the RESourceEU initiative.
Conflicts of interest and geopolitical turning points
Back in April 2025, China demonstrated its willingness to use critical minerals as geopolitical leverage, imposing restrictions on exports of seven critical elements and rare earth magnets in retaliation for US tariffs. October followed with further export controls shortly after the Netherlands' government surveillance of the Chinese-owned semiconductor firm Nexperia, which directly impacted the European industry. As tighter magnet export licences hit, several European carmakers were forced to halt production.
The United States presents a different challenge. Under President Trump, the US has pursued an aggressive CRM strategy that both overlaps and competes with EU interests. In 2025, the US struck mineral deals with Ukraine, Australia, Japan and further countries also targeted by Brussels. However, where the two diverge significantly is in their capacity to back their ambitions financially. The US EXIM Bank alone announced $100 billion for CRM and energy investments at the end of 2025, overshadowing the EU's €3 billion RESourceEU allocation — a gap that Brussels sources acknowledge demonstrates "a clear inability on the part of Europe to mobilise sufficient resources".
Nowhere has this competitive tension been more visible than over Greenland, where Trump's attempts to acquire the mineral-rich territory, including threats of military force and 25% tariffs on EU goods, escalated into a full diplomatic crisis in early 2026 before he backed down at Davos. Yet, within weeks, EU officials were in Washington, negotiating a raw materials MoU with the very administration that had threatened them recently — a pivot that, according to critics, undermined the bloc's claims to strategic autonomy.
Outlook and key risks
As the EU faces what analysts at the European Think Tanks Group called a "Sovereignty Paradox", its strategic autonomy ambition is increasingly stuck between US industrial policy and Chinese diplomacy, while a Chinese-driven crash in global lithium and nickel prices (down ~80% from peaks) has led to many Western mining projects in financial turmoil.
This funding asymmetry is compounded by structural weaknesses at home. As Correia and Falck argue, fragmentation and low risk appetite in European capital markets have left mining finance «constrained by an insular and specialised financing universe that has shrunk dramatically in OECD markets over the last decade», meaning that even where political will exists, the capital to act on it may not.
Whether Europe can translate its policy frameworks into actual supply chain resilience will depend on its ability to mobilise capital at a scale competitive with US and Chinese state-backed efforts, maintain political coherence among 27 member states, and navigate an increasingly fragmented geopolitical landscape in which its traditional allies may be as much competitors as partners.
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