Comparative Analysis of Chinese and European Policies on Rare Earth Elements: Implications for the Global Energy Transition and Security of Supply Chains

Rare earth elements (REEs) play a crucial role in modern technological advancements and the global energy transition. These elements are essential for manufacturing high-tech products such as electric vehicles, wind turbines, semiconductors, and batteries, and also play a crucial role in medical and military applications, making them strategic minerals. Despite their relative abundance in the Earth’s crust, REEs are challenging to extract and process due to their complex separation procedures and environmental impact, leading to a highly concentrated global supply chain. China dominates REE production, refining, and export, while the European Union remains heavily dependent on imports, raising concerns over economic, national and environmental security and supply chain resilience. Given the increasing global demand for REEs, their strategic importance has grown, making them a key issue in international trade, industrial policy, and geopolitical relations. This thesis conducts a comparative analysis of Chinese and European policies on REEs, exploring their regulatory frameworks, strategic priorities, and policy tools. China has implemented strict production and export control regulations, reinforcing its dominance in the sector and integrating REEs into its broader industrial and economic policies. The EU, in contrast, has focused on diversifying its supply chains, securing alternative sources, and advancing sustainable mining and recycling initiatives to reduce dependence on a single supplier. The study also examines China’s use of REEs as a geopolitical tool, particularly in light of the 2010 rare earth crisis, and assesses the EU’s vulnerabilities in securing long-term access to these critical materials. The findings highlight the risks of Europe’s continued reliance on Chinese REEs, including potential economic stagnation, industrial slowdowns, and strategic dependence, as well as the risks for the global energy transition to greener energy sources. While some opportunities for collaboration remain, to mitigate supply chain vulnerabilities, the EU must accelerate efforts to develop domestic extraction and processing capabilities, invest in research and innovation, and strengthen international partnerships. The future of REEs will be shaped by global cooperation, technological advancements, and the capacity to diversify supply chains.