EU lawmakers vote to create raw materials agency to cut reliance on China

The European Parliament has voted to strengthen the bloc's Critical Raw Materials Act (CRMA), backing the creation of a dedicated EU agency and a €2 billion fund designed to reduce Europe's dependence on foreign suppliers of minerals essential to the clean energy, defense and digital transitions.

The amendments, adopted by 470 votes to 83 with 108 abstentions, are designed to accelerate extraction, processing, recycling and substitution across the full critical raw materials value chain, with direct implications for commodity trade flows as the EU seeks to diversify away from dominant suppliers — particularly China — for inputs ranging from rare earth elements to lithium and cobalt.

"Critical raw materials have become the currency of geopolitical power. Those who control them control our industrial future, our energy transition and our security," lead MEP Mohammed Chahim, of the Socialists and Democrats group from the Netherlands, said.

Supply security

At the heart of the proposed amendments is the creation of a critical raw materials center as a self-standing EU agency, equipped with dedicated funding, clear governance and democratic accountability. The center will consolidate market intelligence, resilience planning, stockpiling coordination, joint purchasing, stakeholder engagement and financial instruments under one roof.

MEPs have proposed funding the center through a € 2 billion Critical Raw Materials Fund, earmarked under the EU's 2028-2034 long-term budget framework. The fund will provide revenue certainty to developers of extraction, processing and recycling projects through price-stabilization mechanisms, including contracts for difference, a tool already used in the European power sector to de-risk low-carbon investment.

To keep recyclable materials within the EU and support domestic processing capacity, MEPs are calling for a conditional export-control clause that would allow the European Commission to restrict exports of permanent-magnet scrap and waste. Permanent magnets — which rely heavily on rare earth elements such as neodymium and dysprosium — are critical components in electric vehicle motors and wind turbines, sectors at the core of the EU's energy transition strategy.

The Commission, rather than individual member states, will be responsible for identifying large companies whose use of critical raw materials in strategic sectors — including batteries, hydrogen equipment, aircraft, drones, satellites and advanced chips — triggers resilience obligations. Those obligations would include supply chain mapping and measures to reduce vulnerability to disruption.

MEPs also want the Commission to open applications for strategic projects at least twice a year, providing companies with clear and predictable timelines for investment decisions.

Defense dimension

The EU Parliament's amendments explicitly link critical raw materials security to European defense capability, calling for the forthcoming European Defence Industry Program to be mobilized to finance strategic raw material projects vital to EU security. The move reflects growing concern among policymakers that supply concentration risks extend beyond economic disruption to national security vulnerabilities.

The joint purchasing mechanism already available under the existing CRMA framework would be expanded under the proposed amendments to facilitate coordinated strategic stockpiling of critical raw materials by both member states and private-sector participants.

The original CRMA was adopted by Parliament in December 2023, establishing an EU-wide framework to guarantee industry access to raw material inputs essential for the clean energy, digital, defense and aerospace transitions. The Commission proposed amendments to the law in December 2025, stemming from the RESourceEU Action Plan, citing the need to accelerate implementation and strengthen the EU's strategic autonomy in the face of intensifying global competition for mineral resources.

Parliament is now ready to begin negotiations with member states on the final text.