The EU rare earth metals supply is at the centre of a new €3 billion investment package that aims to cut dependence on China and secure critical materials for Europe’s green and digital transition. Over the next year, the European Commission plans to channel fresh funding into mining, refining and recycling projects, while tightening rules on exports of waste containing rare earth elements.
Why rare earth metals have become a strategic EU priority
Rare earth elements are essential for permanent magnets used in wind turbines, electric vehicles, consumer electronics and defence technologies. Today, the EU relies heavily on imports from China for both raw materials and processed magnets, leaving European industries exposed to price shocks and export controls.
With the Critical Raw Materials Act already in force, the Commission now wants to accelerate its implementation and reduce the risk that one external supplier can disrupt key supply chains. The new package is presented as part of a broader economic security strategy, alongside trade defence tools and closer coordination with like‑minded partners.
How the RESourceEU plan will spend €3 billion
The new REsourceEU Action Plan bundles together EU budget resources, guarantees from the European Investment Bank and other financial instruments into a dedicated €3 billion envelope. The goal is to support projects that can quickly increase the availability of critical raw materials within or close to Europe.
Funding is expected to prioritise:
- Mining and processing projects in Europe and in partner countries that commit to high environmental and labour standards.
- Recycling facilities for rare earth elements, permanent magnets and battery materials, so that more value is kept inside the EU.
- Innovation in substitution and efficiency, including research on alternative materials and technologies that require fewer rare earths.
According to the Commission, the combination of public support and private investment should help reduce the EU’s most risky dependencies for critical raw materials by the end of this decade.
Export restrictions on rare earth magnet waste from 2026
A central element of the plan is to keep more rare earth‑rich waste inside the EU. Brussels plans to introduce export restrictions on scraps and waste from permanent magnets containing rare earth metals, with proposals expected in 2026.
Today, a significant share of end‑of‑life products and industrial waste that contain rare earths leaves the EU as scrap. For the Commission, this is a missed opportunity: with the right infrastructure, recycling could cover a sizeable share of Europe’s permanent magnet demand, reducing the need for new imports and cutting environmental impacts linked to mining.
The planned restrictions will be accompanied by further measures, such as clearer product labelling, rules to facilitate dismantling and targets for the use of recycled materials in new magnets. The export limits on waste lithium‑ion batteries and black mass are meant to follow a similar logic, ensuring that valuable resources are processed in Europe instead of being shipped abroad.
Nordic and Arctic raw materials in the EU’s diversification strategy
The new plan explicitly encourages member states and companies to invest in diversified supply chains, including projects in the Nordic and Arctic regions. In recent years, Sweden’s discovery of large rare earth deposits in Kiruna and renewed interest in mining projects in Greenland have illustrated how northern Europe could contribute to the EU’s raw materials security.
Nordic governments are already debating how to balance local environmental concerns, Indigenous rights and the demand for new mines that supply the green transition. Under the EU’s framework, projects that seek support will have to comply with strict environmental rules and engage local communities, while demonstrating that they strengthen European strategic autonomy.
Implications for industry, trade partners and the green transition
For European manufacturers, the EU rare earth metals supply strategy is meant to provide more predictable access to critical inputs over the medium term. Companies in sectors such as automotive, wind energy and electronics may be encouraged to sign long‑term offtake agreements with EU‑based or allied suppliers, even if costs are initially higher than imports from China.
At the same time, the combination of investment support and export restrictions is likely to be scrutinised by trade partners. Brussels insists that the measures will respect World Trade Organization rules and international agreements, but some exporting countries may perceive them as protectionist.
Environmental organisations will also follow how the €3 billion plan translates into concrete projects. They warn that new mines and processing plants must not simply shift ecological pressures from one region to another, and call for strong safeguards on biodiversity, water use and local communities.
What comes next for Europe’s critical raw materials agenda
The RESourceEU package is designed as the operational arm of the Critical Raw Materials Act, turning high‑level benchmarks into specific projects and regulatory changes. Over the next few years, the EU will define detailed export restrictions, update permitting rules for strategic projects and expand funding for recycling and substitution.
Whether the initiative succeeds will depend on how quickly new projects come online, how attractive Europe becomes for investors, and how global suppliers react to the shift. For the Nordic region and for the EU as a whole, the next decade will show whether a mix of diversification, circular economy and innovation is enough to secure rare earth supplies without undermining environmental and social standards.
