BRUSSELS — The EU has struck a political agreement to overhaul the bloc’s foreign direct investment screening rules, the Council of the EU announced on Thursday, in a move to prevent strategic technology and critical infrastructure from falling into the hands of hostile powers. The updated rules — the first major plank of European Commission President’s Ursula von der Leyen’s economic security strategy — would require all EU countries to systematically monitor investments and further harmonize the way those are screened within the bloc. The agreement comes just over a week after Brussels unveiled a new economic security package. Under the new rules, EU countries would be required to screen investments in dual-use items and military equipment; technologies like artificial intelligence, quantum technologies and semiconductors; raw materials; energy, transport and digital infrastructure; and election infrastructure, such as voting systems and databases. As previously reported by POLITICO, foreign entities investing into specific financial services must also be subject to screening by EU capitals. “We achieved a balanced and proportionate framework, focused on the most sensitive technologies and infrastructures, respectful of national prerogatives and efficient for authorities and businesses alike,” said Morten Bødskov, Denmark’s minister for industry, business and financial affairs. It took three round of political talks between the three institutions to seal the update, which was a key priority for the Danish Presidency of the Council of the EU. One contentious question was which technologies and sectors should be subject to mandatory screening. Another was how capitals and the European Commission should coordinate — and who gets the final say — when a deal raises red flags. Despite a request from the European Parliament, the Commission will not get the authority to arbitrate disputes between EU countries on specific investment cases. Screening decisions will remain firmly in the purview of national governments. “We’re making progress. The result of our negotiations clearly strengthens the EU’s security while also making life easier for investors by harmonising the Member States’ screening mechanism,” said the lead lawmaker on the file, French S&D Raphaël Glucksmann. “Yet more remains to be done to ensure that investments bring real added value to the EU, so that our market does not become a playground for foreign companies exploiting our dependence on their technology. The Commission has committed to take an initiative; it must now act quickly,” he said in a statement to POLITICO. This story has been updated.

Iris Ferguson is a global adviser to Loom and a former U.S. deputy assistant secretary of defense for Arctic and global resilience. Ann Mettler is a distinguished visiting fellow at Columbia University’s Center on Global Energy Policy and a former director general of the European Commission. After much pressure, European leaders delayed a decision this week amid division on whether to tighten market access through a “Made in Europe” mandate and redouble efforts to reduce the bloc’s strategic dependencies — particularly on China. This decision may appear technocratic, but the hold-up signals its importance and reflects a larger strategic reality shared across the Atlantic. Security, industry and energy have all fused into a single race to control the systems that power modern economies and militaries. And increasingly, success will hinge on whether the U.S. and Europe can confront this reality together, starting with the one domain that’s shaping every other: energy. While traditional defense spending still grabs headlines, today’s battlefield is being reshaped just as profoundly by energy flows and critical inputs. Advanced batteries for drones, portable power for forward-deployed units and mineral supply chains for next-generation platforms — these all point to the simple truth that technological and operational superiority increasingly depends on who controls the next generation of energy systems. But as Europe and the U.S. look to maintain their edge, they must rethink not just how they produce and move energy, but how to secure the industrial base behind it. Energy sovereignty now sits at the center of our shared security, and in a world where adversaries can weaponize supply chains just as easily as airspace or sea lanes, the future will belong to those who build energy systems that are resilient and interoperable by design. The Pentagon already understands this. It has tested distributed power to shorten vulnerable fuel lines in war games across the Indo-Pacific; it has watched closely how mobile generation units keep the grid alive under Russian attack in Ukraine; and it is exploring ways to deliver energy without relying on exposed logistics via new research on solar power beaming. Each of these cases clearly demonstrates that strategic endurance now depends on energy agility and security. But currently, many of these systems depend on materials and manufacturing chains that are dominated by a strategic rival: From batteries and magnets to rare earth processing, China controls our critical inputs. This isn’t just an economic liability, it’s a national security vulnerability for both Europe and the U.S. We’re essentially building the infrastructure of the future with components that could be withheld, surveilled or compromised. That risk isn’t theoretical. China’s recent export controls on key minerals are already disrupting defense and energy manufacturers — a sharp reminder of how supply chain leverage can be a form of coercion, and of our reliance on a fragile ecosystem for the very technologies meant to make us more independent. So, how do we modernize our energy systems without deepening these unnecessary dependencies and build trusted interdependence among allies instead? The solution starts with a shift in mindset that must then translate into decisive policy action. Simply put, as a matter of urgency, energy and tech resilience must be treated as shared infrastructure, cutting across agencies, sectors and alliances. Defense procurement can be a catalyst here. For example, investing in dual-use technologies like advanced batteries, hardened micro-grids and distributed generation would serve both military needs and broader resilience. These aren’t just “green” tools — they’re strategic assets that improve mission effectiveness, while also insulating us from coercion. And done right, such investment can strengthen defense, accelerate innovation and also help drive down costs. Next, we need to build new coalitions for critical minerals, batteries, trusted manufacturing and cyber-secure infrastructure. Just as NATO was built for collective defense, we now need economic and technological alliances that ensure shared strategic autonomy. Both the upcoming White House initiative to strengthen the supply chain for artificial intelligence technology and the recently announced RESourceEU initiative to secure raw materials illustrate how partners are already beginning to rewire systems for resilience. Germany gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. | Tan Kexing/Getty Images Finally, we must also address existing dependencies strategically and head-on. This means rethinking how and where we source key materials, including building out domestic and allied capacity in areas long neglected. Germany recently gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. Moving forward, measures like this need EU-wide adoption. By contrast, in the U.S., strong bipartisan support for reducing reliance on China sits alongside proposals to halt domestic battery and renewable incentives, undercutting the very industries that enhance resilience and competitiveness. This is the crux of the matter. Ultimately, if Europe and the U.S. move in parallel rather than together, none of these efforts will succeed — and both will be strategically weaker as a result. The EU’s High Representative for Foreign Affairs and Security Policy Kaja Kallas recently warned that we must “act united” or risk being affected by Beijing’s actions — and she’s right. With a laser focus on interoperability and cost sharing, we could build systems that operate together in a shared market of close to 800 million people. The real challenge isn’t technological, it’s organizational. Whether it be Bretton Woods, NATO or the Marshall Plan, the West has strategically built together before, anchoring economic resilience with national defense. The difference today is that the lines between economic security, energy access and defense capability are fully blurred. Sustainable, agile energy is now part of deterrence, and long-term security depends on whether the U.S. and Europe can build energy systems that reinforce and secure one another. This is a generational opportunity for transatlantic alignment; a mutually reinforcing way to safeguard economic interests in the face of systemic competition. And to lead in this new era, we must design for it — together and intentionally. Or we risk forfeiting the very advantages our alliance was built to protect.

Disclaimer: POLITICAL ADVERTISEMENT * The sponsor is Polish Electricity Association (PKEE) * The advertisement is linked to policy advocacy on energy transition, electricity market design, and industrial competitiveness in the EU. More information here The European Union is entering a decisive decade for its energy transformation. With the international race for clean technologies accelerating, geopolitical tensions reshaping markets and competition from other major global economies intensifying, how the EU approaches the transition will determine its economic future. If managed strategically, the EU can drive competitiveness, growth and resilience. If mismanaged, Europe risks losing its industrial base, jobs and global influence.  > If managed strategically, the EU can drive competitiveness, growth and > resilience. If mismanaged, Europe risks losing its industrial base, jobs and > global influence. This message resonated strongly during PKEE Energy Day 2025, held in Brussels on October 14, which brought together more than 350 European policymakers, industry leaders and experts under the theme “Secure, competitive and clean: is Europe delivering on its energy promise?”. One conclusion was clear: the energy transition must serve the economy, not the other way around.  Laurent Louis Photography for PKEE The power sector: the backbone of Europe’s industrial future  The future of European competitiveness will be shaped by its power sector. Without a successful transformation of electricity generation and distribution, other sectors — from steel and chemicals to mobility and digital — will fail to decarbonize. This point was emphasized by Konrad Wojnarowski, Poland’s deputy minister of energy, who described electricity as “vital to development and competitiveness.”  “Transforming Poland’s energy sector is a major technological and financial challenge — but we are on the right track,” he said. “Success depends on maintaining the right pace of change and providing strong support for innovation.” Wojnarowski also underlined that only close cooperation between governments, industry and academia can create the conditions for a secure, competitive and sustainable energy future.  Flexibility: the strategic enabler  The shift to a renewables-based system requires more than capacity additions — it demands a fundamental redesign of how electricity is produced, managed and consumed. Dariusz Marzec, president of the Polish Electricity Association (PKEE) and CEO of PGE Polska Grupa Energetyczna, called flexibility “the Holy Grail of the power sector.”  Speaking at the event, Marzec also stated “It’s not about generating electricity continuously, regardless of demand. It’s about generating it when it’s needed and making the price attractive. Our mission, as part of the European economy, is to strengthen competitiveness and ensure energy security for all consumers – not just to pursue climate goals for their own sake. Without a responsible approach to the transition, many industries could relocate outside Europe.”  The message is clear: the clean energy shift must balance environmental ambition with economic reality. Europe cannot afford to treat decarbonization as an isolated goal — it must integrate it into a broader industrial strategy.  > The message is clear: the clean energy shift must balance environmental > ambition with economic reality. The next decade will define success  While Europe’s climate neutrality target for 2050 remains a cornerstone of EU policy, the next five to ten years will determine whether the continent remains globally competitive. Grzegorz Lot, CEO of TAURON Polska Energia and vice-president of PKEE, warned that technology is advancing too quickly for policymakers to rely solely on long-term milestones.  “Technology is evolving too fast to think of the transition only in terms of 2050. Our strategy is to act now — over the next year, five years, or decade,” Lot said. He pointed to the expected sharp decline in coal consumption over the next three years and called for immediate investment in proven technologies, particularly onshore wind.  Lot also raised concerns about structural barriers. “Today, around 30 percent of the price of electricity is made up of taxes. If we want affordable energy and a competitive economy, this must change,” he argued.  Consumers and regulation: the overlooked pillars  A successful energy transition cannot rely solely on investment and infrastructure. It also depends on regulatory stability and consumer participation. “Maintaining competitiveness requires not only investment in green technologies but also a stable regulatory environment and active consumer engagement,” Lot said.  He highlighted the potential of dynamic tariffs, which incentivize demand-side flexibility. “Customers who adjust their consumption to market conditions can pay below the regulated price level. If we want cheap energy, we must learn to follow nature — consuming and storing electricity when the sun shines or the wind blows.”  Strategic investments for resilience  The energy transition is more than a climate necessity. It is a strategic requirement for Europe’s security and economic autonomy. Marek Lelątko, vice-president of Enea, stressed that customer- and market-oriented investment is essential. “We are investing in renewables, modern gas-fired units and energy storage because they allow us to ensure supply stability, affordable prices and greater energy security,” he said.  Grzegorz Kinelski, CEO of Enea and vice-president of PKEE, added: “We must stay on the fast track we are already on. Investments in renewables, storage and CCGT [combined cycle gas turbine] units will not only enhance energy security but also support economic growth and help keep energy prices affordable for Polish consumers.”  The power sector must now be recognized as a strategic enabler of Europe’s industrial future — on par with semiconductors, critical raw materials and defense. As Dariusz Marzec puts it: “The energy transition is not a choice — it is a necessity. But its success will determine more than whether we meet climate targets. It will decide whether Europe remains competitive, prosperous and economically independent in a rapidly changing world.”  > The power sector must now be recognized as a strategic enabler of Europe’s > industrial future — on par with semiconductors, critical raw materials and > defense. Measurable progress, but more is needed  Progress is visible. The power sector accounts for around 30 percent of EU emissions but has already delivered 75 percent of all Emissions Trading System reductions. By 2025, 72 percent of Europe’s electricity will come from low-carbon sources, while fossil fuels will fall to a historic low of 28 percent. And in Poland, in June, renewable energy generation overtook coal for the first time in history.  Still, ambition alone is not enough. In his closing remarks, Marcin Laskowski, vice-president of PKEE and executive vice-president for regulatory affairs at PGE Polska Grupa Energetyczna, stressed the link between the power sector and Europe’s broader economic transformation. “The EU’s economic transformation will only succeed if the energy transition succeeds — safely, sustainably and with attractive investment conditions,” he said. “It is the power sector that must deliver solutions to decarbonize industries such as steel, chemicals and food production.”  A collective European project  The event in Brussels — with the participation of many high-level speakers, including Mechthild Wörsdörfer, deputy director general of DG ENER; Tsvetelina Penkova, member of the European Parliament and vice-chair of the Committee on Industry, Research and Energy; Thomas Pellerin-Carlin, member of the European Parliament; Catherine MacGregor; CEO of ENGIE and vice-president of Eurelectric; and Claude Turmes, former minister of energy of Luxembourg — highlighted a common understanding: the energy transition is not an isolated environmental policy, it is a strategic industrial project. Its success will depend on coordinated action across EU institutions, national governments and industry, as well as predictable regulation and financing.  Europe’s ability to remain competitive, resilient and prosperous will hinge on whether its power sector is treated not as a cost to be managed, but as a foundation to be strengthened. The next decade is a window of opportunity — and the choices made today will shape Europe’s economic landscape for decades to come. 

An emerging U.S.-China detente gives European leaders breathing room to find a strategy on trade, raw materials and the war in Ukraine — but the thaw between the two great powers risks pushing European interests to the side.   President Donald Trump and his counterpart Xi Jinping agreed to a significant de-escalation in their trade spat during a head-to-head Thursday in South Korea, pausing export controls on rare earth magnets and other critical raw materials for 12 months.   While the move is good news for European companies that have been caught in the crossfire, other sticking points in the Europe-China relationship will be harder to resolve, even with the gift of time.  Brussels, under pressure from Trump and in pursuit of its own strategic interests, is trying — without notable success — to sway Beijing from supporting Russia in its war on Ukraine.   At the same time the EU is doing its best to keep the temperature down in its longstanding trade standoff with China, whose intensity has ratcheted up recently with the imposition of limits on exports of critical raw materials and microchips. Both measures have had an immediate negative impact on European industry, particularly automakers which were already struggling prior to the restrictions.  Fears of lasting, irreversible damage to Europe’s industries have led the EU to take a more conciliatory stance in its trade standoff, emphasizing engagement and dialogue rather than punitive measures.  Yet Chinese officials have balked at the slow and uncoordinated pace of discussions with the EU, leading Beijing to drop Europe down its list of priorities, according to Jeremy Chan, a senior analyst at Eurasia Group.  “The EU is a secondary at best, maybe a tertiary or a non-consideration for both Washington and Beijing in these negotiations,” Chan told POLITICO.  ‘LET THEM FIGHT’ The top political priority for the EU is ending the war in Ukraine — something that Trump while on the campaign trail promised to do within his first 24 hours in office. Almost a year into his term, the fighting continues, aided by China propping up Russia’s economy through investments and oil purchases.  At the urging of the White House, the EU included Chinese banks and refineries in its two latest rounds of sanctions targeting Russia, arguing the entities were helping Moscow evade sanctions. This prompted an angry response from top Chinese officials including Prime Minister Li Qiang, who branded the sanctions “unacceptable” during a meeting with European Council President Antonio Costa in Asia this week, per an EU official.  European Commission President Ursula von der Leyen and the bloc’s top diplomat, Kaja Kallas, have both called out Beijing’s support for Moscow in explicit terms, with the former saying in July that it has a “direct and dangerous impact on European security.”  The EU’s latest sanctions prompted an angry response from top Chinese officials including Prime Minister Li Qiang, who branded them “unacceptable” at a meeting with European Council President Antonio Costa, per an EU official. | Pool photo by Vincent Thian via AFP/Getty Images Ukraine had hoped Trump would pressure Beijing to stop buying Russian oil, but the American president told media on Air Force One that the issue was not on the table — although he did say the war in Ukraine “came up very strongly,” with both sides hoping to find an end to the fighting.   “He’s going to help us and we’re going to work together on Ukraine,” Trump said, referring to the Chinese president. INDUSTRIES HELD HOSTAGE While China’s export controls were not directed at the EU, the bloc’s companies faced long delays and sharp price hikes in contending with the subsequent shortage of raw materials and magnets. China accounts for 98 percent of the EU’s rare earth permanent magnets.  The geopolitical firestorm sent the European Commission into overdrive to secure its own supplies of the magnets and launch a plan to diversify Europe’s supply chain by the end of the year.   But the EU has been here before. Just two years ago it passed the Critical Raw Materials Act to solve this exact problem, and yet all the deals that have been signed have failed to deliver actual products. Its latest scheme is big on ideas and short on specifics.   The one-year pause on export controls agreed between Trump and Xi affords the EU some time to put that plan into action and leverage its other alliances — including efforts unfolding at the G7 this week with Canada, along with the U.K., Italy, France and Germany seeking to diversify away from China’s grip.  But for companies looking for clarity, the catch is that none of the agreements made between Trump and Xi are binding.  “As long as we don’t see any details hammered out and put on paper it leaves a lot of room for both sides backtracking and applying various other conditions, so I don’t think that this is really settled,” said Alexander Gabuev, director of the Carnegie Russia Eurasia Center.  SECURITY CONCERNS  In the U.K., pressure is expected to build for policymakers to use the temporary U.S. truce to minimize the risks from China.  British PM Keir Starmer has thus far failed to resolve longstanding tensions between “securocrats” in parliament and Whitehall, who want to see a tougher stance toward Beijing, and those who argue for a closer embrace in order to boost inward investment. Prominent members of the government have traveled to Beijing in pursuit of strengthened ties since Starmer took office, despite his overriding foreign policy aim of cleaving close to Trump.  China has become a particular sore point for Starmer in recent weeks due to the collapse of the prosecution of two men accused of spying for Beijing, while ministers have yet to decide the fate of a planned Chinese “super-embassy” in London.  Back in the EU, divisions among member countries over how to counter China’s power — and any subsequent retribution — make a unified stance toward Beijing on trade or dumping measures unlikely.   Brussels got a glimpse of its internal factions when it slapped duties on made-in-China electric vehicles following an anti-subsidy investigation. Automakers and their political benefactors fear Chinese brands will dump their overcapacity in the European market, bringing a severe price war to Europe’s shores.   Yet for all the handwringing over how to protect domestic automakers, the votes of EU capitals on the duties revealed how economically exposed each is to China, with Germany launching a last-minute appeal to stop the duties.  The Netherlands is the latest EU member on the outs with China after Dutch authorities seized control of chipmaker Nexperia, prompting Beijing to hit back with export controls on Nexperia’s Chinese-produced chips. The shortage could halt production lines across Europe in less than a week, showcasing just how economically dependent Europe has become on China.  LET’S BE FRIENDS From the jump, Trump framed his sojourn to Asia as a “G2” summit, stoking fears that any deal would sideline other countries or that “British and European trade priorities could be overlooked or traded away without consultation,” said David Taylor, director of policy and programs at Asia House.  Sensing its declining influence in the Trump-Xi bromance, the EU is looking to bolster its trade ties elsewhere.  Trade chief Maroš Šefčovič is traveling to Australia in late November to chair an inaugural dialogue between the EU and the 12 members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership bloc, two diplomats told POLITICO. The dialogue is meant to deepen economic and political ties between the EU and countries keen to maintain established global trade rules.  Brussels, under pressure from Donald Trump and in pursuit of its own strategic interests, is trying to sway Beijing from supporting Russia in its war on Ukraine. | Jim Watson/Getty Images Brussels will have a chance to do just that when it hosts a delegation of high-level Chinese officials on Friday. They’re expected to meet with the Commission’s trade deputy-director general, Denis Redonnet, and other senior officials.  Experts caution that Europe will need to maintain pressure on Beijing to get any movement on its priorities.   “Europe cannot just simply be waiting to see what happens on talks between [the] United States and China,” said Ignacio Garcia Bercero, a former director at the Commission’s trade department. “It needs to develop its own channel of dialogue with China.” 

BRUSSELS — In the midst of a geopolitical storm, Brussels is racing to put together a new plan by the end of this year to diversify European supply of so-called critical raw materials — such as lithium and copper — away from China.  The thing is: We’ve been here before. So far, the European Commission has provided few details on its new plan, beyond that it would touch upon joint purchasing, stockpiling, recycling of resources and new partnerships. It already addressed those measures two years ago in its first initiative on the issue, the Critical Raw Materials Act.  Commission chief Ursula von der Leyen has been forced to act by Beijing’s expansion and tightening of export controls on rare earths and other critical minerals this month, as trade tensions with Washington escalated. Europe was caught in the crossfire — China accounts for 99 percent of the EU’s supply of the 17 rare earths, and 98 percent of its rare earth permanent magnets. The new “RESourceEU” plan is expected to follow a similar model to the REPowerEU plan, under which the Commission in 2022 proposed investing €225 billion to diversify energy supply routes after Russia’s illegal invasion of Ukraine.  That has European industry daring to hope that Brussels will do more than just recycle an old initiative and address the main obstacles to diversifying the bloc’s supply chains of minerals it needs for everything from renewable energy to defense applications. The biggest of them all? A lack of cash to back new mining, processing and manufacturing initiatives, both within and outside the EU. “It’s all still very much in its infancy,” said Florian Anderhuber, deputy director general of lobby group Euromines. “We hope that there will be a bigger push that goes beyond the implementation of the Critical Raw Materials Act,” he added. “It doesn’t help anyone if this is just a label for things that are already in the pipeline.” CODEPENDENT RELATIONSHIP The EU should not count on any trade reprieve that may result from U.S. President Donald Trump’s meeting with Chinese counterpart Xi Jinping on Thursday. After all, Beijing has shown time and again that it has no reservations about weaponizing economic dependencies. The key question is whether, this time around, pressure will remain high enough for the EU to mobilize brainpower and assets at the kind of scale it did when it sought to break the bloc’s decades-old reliance on Russian oil and gas. “Europe cannot do things the same way anymore,” von der Leyen said as she announced the initiative last weekend. “We learned this lesson painfully with energy; we will not repeat it with critical materials. So it is time to speed up and take the action that is needed.” “Europe cannot do things the same way anymore,” von der Leyen said as she announced the initiative last weekend. | Costfoto/NurPhoto via Getty Images In the here and now, the EU wants to persuade a visiting Chinese delegation at talks in Brussels on Friday to speed up export approvals for its top raw materials importers. In parallel, energy and environment ministers from the G7 group of industrialized nations are slated to wargame how to de-risk their mineral supply chains in Toronto, Canada, on Thursday and Friday. MONEY, MONEY, MONEY When the Commission unveiled its first grand plan to break over-reliance on China in 2023 — the Critical Raw Materials Act (CRMA) — industry leaders and analysts mostly lamented one thing: a lack of funding on the table.  “Money has been a real bottleneck for Europe’s raw materials agenda,” said Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations. “Mining, processing, recycling, and stockpiling all need serious financing.” If the EU fails to free up more resources, experts warn that it is bound to fall short of the goal set in the CRMA, of extracting at least 10 percent of its annual consumption of select minerals by the end of the decade, with no more than 65 percent of some raw materials coming from a single country. It’s a steep target — especially for rare earths, where Beijing has over decades built up a de facto monopoly. While the EU executive has selected strategic projects both within and outside the EU that should benefit from faster permitting than their usual lead times of 10 to 15 years to production, those efforts are yet to bear fruit. “To finance such projects, the next EU budget must provide substantial, dedicated [Critical Raw Material] funding, and financial institutions must deploy innovative de-risking and financing tools,” the European Initiative for Energy Security argues in a new report, calling for a “permanent European Minerals Investment Network.”  “To finance such projects, the next EU budget must provide substantial, dedicated [Critical Raw Material] funding, and financial institutions must deploy innovative de-risking and financing tools,” the European Initiative for Energy Security argues in a new report. | Aris Oikonomou/AFP via Getty Images The REPowerEU plan — a package of documents, including legal acts, recommendations, guidelines and strategies — was mostly financed by loans left over from the bloc’s pandemic recovery program. Similarly, RESourceEU must become “resource strategy backed by real funding,” said Hildegard Bentele, a member of the European Parliament who’s been working on critical minerals for years.  “This requires a European Raw Materials Fund, modelled on successful instruments in several Member States, to support strategic projects across the entire value chain, from extraction to recycling,” the German Christian Democrat said. THAT’LL COST YOU It’s about more than just throwing money at the problem: The Commission’s haste in rolling out its plan is raising doubts that it will meet the needs of a highly complex market — along with concerns that environmental safeguards will be neglected. “As long as European industries can buy cheaper materials from China, other producers do not stand a chance,” warned Gehrke.  In Toronto, G7 ministers will launch a new Critical Minerals Production Alliance (CMPA), a Canadian-led initiative that seeks to secure “transparent, democratic, and environmentally responsible critical minerals,” and also to counter market manipulation of supply chains, said a senior Canadian government official.  This would suggest creating so-called standards-based markets that are ring-fenced to protect critical minerals produced responsibly, to agreed environmental and social standards. A price floor would be set within that market, while minerals produced elsewhere — at lower prices but also lower standards — would face a tariff.  Beyond the immediate funding issues, ramping up mining in the EU and its neighbourhood also comes at a high societal cost. With local resistance to new mines, usually linked to environmental and social concerns, being one of the key obstacles to new projects, investors are often hesitant to pour money into a project that risks being derailed shortly after. “The EU is choosing geopolitical expediency over human rights and ecological integrity, sacrificing frontline communities for a strategy that is neither sustainable nor just, instead of building a durable and values-based autonomy that invests in systemic circularity and rights-based partnerships,” said Diego Marin, a senior policy officer for raw materials and resource justice at the European Environmental Bureau, an NGO.  Jakob Weizman and Camille Gijs contributed reporting from Brussels. Zi-Ann Lum contributed reporting from Toronto, Canada.

The European Commission will present a new plan to break the EU’s dependencies on China for critical raw materials, President Ursula von der Leyen announced on Saturday. The EU executive chief warned of “clear acceleration and escalation in the way interdependencies are leveraged and weaponized,” in a speech Saturday at the Berlin Global Dialogue. In recent months, China has tightened export controls over rare earths and other critical materials. The Asian powerhouse controls close to 70 percent of the world’s rare earths production and almost all of the refining. The EU’s response “must match the scale of the risks we face in this area,” von der Leyen said, adding that “we are focusing on finding solutions with our Chinese counterparts.” Brussels and Beijing are set to discuss the export controls issue during meetings next week. “But we are ready to use all of the instruments in our toolbox to respond if needed,” the head of the EU executive warned. This suggests that the Commission could make use of the EU’s most powerful trade weapon — the Anti-Coercion Instrument. This comes after French President Emmanuel Macron called on the EU executive to trigger the trade bazooka at a meeting of EU leaders on Thursday. His push has not met with much support from the other leaders around the table. NEW BREAKAWAY PLAN To break the EU’s over-reliance on China for critical materials imports and refining, the Commission will put forward a “RESourceEU plan,” von der Leyen said. She did not provide much detail about the plan, nor when it would be presented. But she said it would follow a similar model as the REPowerEU plan that the Commission introduced in 2022 to phase out Russian fossil fuels after Moscow’s illegal invasion of Ukraine. Under REPowerEU, the Commission proposed investing €225 billion to diversify energy supply routes, accelerate the deployment of renewables, improve grids interconnections across the bloc and boost the EU hydrogen market, among other measures. The EU executive also put forward a legislative proposal, which is currently under negotiations with the European Parliament and the Council, to ban Russian gas imports by the end of 2027. The aim of RESourceEU “is to secure access to alternative sources of critical raw materials in the short, medium and long term for our European industry,” von der Leyen explained. “It starts with the circular economy. Not for environmental reasons. But to exploit the critical raw materials already contained in products sold in Europe,” she said. She added that the EU “will speed up work on critical raw materials partnerships with countries like Ukraine and Australia, Canada, Kazakhstan, Uzbekistan, Chile and Greenland.” “Europe cannot do things the same way anymore. We learned this lesson painfully with energy; we will not repeat it with critical materials,” von der Leyen said.

BRUSSELS — Brussels and Beijing will discuss China’s recent restrictions on exports of rare earths and magnets next week, the European Commission said on Friday. “We can confirm that both in-person and virtual high-level technical meetings will take place next week,” trade spokesperson Olof Gill told reporters. The talks will not include Commissioner for Trade and Economic Security Maroš Šefčovič or his Chinese counterpart Wang Wentao just yet. “Teams will engage under the Export Control Dialogue which was upgraded after EU-China summit in July,” Gill added. It is unclear if restrictions on chips will also be discussed. Germany Foreign Minister Johann Wadephul on Friday postponed a trip to China due to start next week. Beijing’s export controls came up in the talks during Thursday’s meeting of EU leaders, according to two EU officials, with some leaders expressing their concerns. One said the EU’s most powerful trade weapon, the Anti-Coercion Instrument, was mentioned, but didn’t garner much interest around the table. The EU, which imports many of its critical raw materials, almost all rare earths and permanent magnets from China, is caught in the crossfire between Beijing and the Trump administration in the U.S. “A crisis in the supply of critical raw materials is no longer a distant risk,” European Commission President Ursula von der Leyen said earlier this week in a speech to European lawmakers.

BRUSSELS — As Beijing further weaponizes its control over the flow of minerals that Western countries need for their green, defense and digital ambitions, Europe has to face an uncomfortable truth: It won’t escape China’s dominance anytime soon. The Chinese government’s shock imposition earlier in October of sweeping export controls on rare-earth magnets and the raw materials needed to make them has escalated a running trade feud with the United States. The embargo threatens vast — and rapid — collateral damage on the European Union and has forced its way onto the agenda of a high-level summit on Thursday. “A crisis in the supply of critical raw materials is no longer a distant risk. It is on our doorstep,” European Commission President Ursula von der Leyen said in a pre-summit speech to European lawmakers. “Now, we must accelerate decisively and urgently. We need faster, more reliable supply of critical raw materials, both here in Europe and with trusted partners. I will be ready to propose further measures to ensure Europe’s economic security and I will accelerate what we have already put in motion.” Beijing’s announcement this month drew a fierce rebuke from U.S. President Donald Trump, who threatened to hike tariffs on Chinese goods to 100 percent. Trump is due to hold a high-stakes meeting with Chinese President Xi Jinping on the sidelines of an Asia-Pacific summit at the end of October. The EU, which imports nearly all of its rare earths and permanent magnets from the Middle Kingdom, is caught in the crossfire. “We have no interest in escalation,” Maroš Šefčovič, the EU’s trade chief, told reporters Tuesday. “However, this situation casts a shadow over our relationship. Therefore, a prompt resolution is essential.” China and the EU will “intensify contacts at all levels” on the issue, Šefčovič added. Wang Wentao, the Chinese trade minister, has accepted an invitation to come to Brussels in the coming days to discuss the restrictions, Šefčovič said after a two-hour call between the two. The EU is also consulting with the G7 group of industrialized nations on a coordinated response on critical minerals ahead of an Oct. 30-31 ministerial meeting in Canada. Yet, behind the talk of adequate diplomatic responses and potential retaliation there is no escaping the dominance in rare earths that China has built up over decades. For now at least. “In the short term there’s nothing you can do, except try and negotiate with the Chinese,” said Philip Andrews-Speed, senior research fellow at the Oxford Institute for Energy Studies.  HIT WHERE IT HURTS Beijing dominates the entire supply chain of rare earths — a group of 17 minerals used in permanent magnets found in everything from electric vehicles and wind turbines, to F-35 fighter jets and naval vessels. Under its new export controls, importers will need a government license to access not only those permanent magnets, but also the refined metals and alloys that go into them. China already weaponized its leading position in producing and refining critical raw materials — and specifically rare-earth elements like scandium, yttrium and dysprosium — in response to Trump’s first wave of punitive tariffs back in April. Eventually, the White House caved in. This time, again, the Chinese export controls are “a tit-for-tat for U.S. policy,” said a person from the Chinese business sector, granted anonymity to speak candidly. The EU is being hit, too: “The effects are direct and enormous, particularly for the defence sector,” Tobias Gehrke and Janka Oertel of the European Council on Foreign Relations wrote in a commentary. “The EU defence industry risks grinding to a halt as inventory shortfalls could leave it struggling to produce and deliver enough weapons for the war in Ukraine.” China accounts for 61 percent of rare earths extraction and 92 percent of refining, according to the International Energy Agency. It provides nearly 99 percent of the EU’s supply of the 17 rare earths, as well as about 98 percent of its rare earth permanent magnets. UNDERDOG DIPLOMACY  In addition to its minerals monopoly, Beijing has built a legal foundation to capitalize on it — through an export control toolbox that mirrors the one Washington has used to cap exports of leading-edge technology to China. The EU lacks a comparable armory that would allow it to respond in kind. Whereas export controls are now a go-to option in Washington’s and Beijing’s trade negotiation strategies, to Brussels, protecting national security remains the sole legitimate justification to deploy such measures.  “The EU will need to find a way to live in this new reality,” said Antonia Hmaidi, senior analyst at think tank Merics, adding that the bloc may have to give up its belief in the rules-based trading system that characterized the post-World War Two era. “It could also mean that the EU chooses not to play that game, but then the EU needs a different game to play,” she said, adding that weaponizing EU market access could be a powerful alternative. Ahead of Thursday’s summit, calls are growing to ready the EU’s Anti-Coercion Instrument (ACI), the only trade policy tool the EU can wield against economic coercion. Working mostly through deterrence, the bloc’s so-called trade bazooka seeks to prevent foreign powers from pressuring European countries — but only foresees action as a last resort. “It’s the usual sabre rattling from the usual subjects, but activating the ACI is not seriously under consideration at this stage,” said one EU diplomat, who was also granted anonymity. Asked whether the EU executive is looking at the ACI, the Commission’s deputy chief spokesperson Olof Gill said: “Right now we’re focused on engagement, and we’re not going to go down the road of speculating about any other possibility.” That engagement is delivering scant results. In June, Beijing agreed to set up a “green channel” for European companies to speed the approval of export licenses. And yet, Šefčovič said, only half of the 2,000 priority applications submitted by European companies to the Chinese authorities had been “properly addressed.” CATCHING UP  Moving forward, the EU needs to dramatically ramp up its diversification efforts. At a meeting with industry leaders on Monday, Industry Commissioner Stéphane Séjourné said the EU’s response must build on two pillars, according to his cabinet: a diplomatic solution and a more resilient supply chain. China accounts for 61 percent of rare earths extraction and 92 percent of refining, according to the International Energy Agency. | VCG/Gett Images That, however, won’t happen overnight. Especially since the EU executive unveiled its grand plan to diversify its supply of raw materials away from China two years ago, officials have been stressing the need to stockpile more of the metals and minerals, ramp up domestic mining and production and seal new partnerships. But concrete action is still lagging, with experts and industry alike lamenting the lack of funding being put on the table. James Watson, director general at metals lobby Eurometaux, welcomed the EU executive’s decision to award “strategic project” status to some 60 mines and refineries inside and outside the bloc, but added: “We still need dedicated funding for the sector, as well as addressing structural issues, such as higher energy costs and heavier administrative burdens, that put as at a competitive disadvantage compared with our global competitors.” Camille Gijs and Koen Verhelst contributed reporting.

Follow all the action as it unfolds on POLITICO’s live blog. BRUSSELS — European leaders meeting Thursday are hoping to stop the march of populists, help Ukraine win its war, and work out what the EU’s identity actually is. (Most of them, that is.) Easy, right? Much of the agenda concerns themes typically seen as the turf of the continent’s right-wing and far-right forces, from migration to social media limits to cutting red tape. But the EU’s mainstream leaders are in a race to prove they can deliver on those issues and to claw back lost political ground.  One of the toughest tests of unity will be shoring up support for Ukraine, with Belgium still holding out on the plan to use frozen Russian assets to back a €140 billion loan for Kyiv. But fault lines — or canyons — persist across a plethora of issues, from the future of Europe’s climate agenda to how to face down the U.S. on its Big Tech dominance. Here’s your cheat sheet as the summit unfolds.  1. Climate — but call it competitiveness Leaders will talk “climate and competitiveness,” a deliberately vague subject line that conceals a high-stakes debate on the bloc’s 2040 emissions-reduction target. Some fear the bloc’s green targets could leash their economies. European Commission President Ursula von der Leyen defended the target but vowed to change the EU’s carbon pricing, among other things, in a bid to get everyone on board, in a letter to leaders obtained by POLITICO. The question that remains is whether leaders can agree on useful guidance for ministers to approve the 2040 target in time for next month’s COP30 climate summit — without weakening the EU’s green laws in the process. Von der Leyen and European Council President António Costa surely hope so. But with views diverging widely across the bloc, the debate is set to be fractious. 2. Critical minerals Grappling with the uncomfortable reality of China’s increasing control over the flow of the minerals Western countries need for their defense, digital and green ambitions, some governments have made a final-hour push to get Beijing’s unfair practices on the agenda — stopping short of calling out China by name, of course. “A crisis in the supply of critical raw materials is no longer a distant risk. It is on our doorstep,” von der Leyen said in a pre-summit speech to European lawmakers. European Commission President Ursula von der Leyen defended the target but vowed to change the EU’s carbon pricing, among other things. | Philipp von Ditfurth/Getty Images Heavyweights France, Poland and — more surprisingly — Germany have taken a more belligerent stance toward Beijing since it expanded its export bans on rare earths earlier in October, and are expected to bring it up. (Officials told POLITICO there’s resistance to this idea from other capitals, as the summit is already set to be a long one.)  3. Frozen assets hang in the balance … At the heart of the summit is the question of how to support Ukraine’s war effort as Russia’s invasion drags into a fourth winter.  Belgium is still holding out on giving its thumbs-up to a dramatic proposal to seize €140 billion in frozen Russian cash to fund a major new tranche of aid for Kyiv.  Prime Minister Bart de Wever has voiced serious reservations because the assets are held in a Brussels-based financial depository. On Wednesday morning, Belgium said it won’t decide on whether to give the green light for the Commission to draw up the full legal proposal until after Thursday’s discussions. As one senior EU official put it to POLITICO, “the devil is in the details.” 4. … but not Russia sanctions. Leaders will be cheered by the knowledge that one measure to help Ukraine was unlocked Wednesday night after Slovakia lifted its veto on the EU’s latest raft of sanctions aimed at draining Moscow’s war chest. The bulk of the package — the 19th to be imposed on Moscow since the start of its full-scale invasion of Ukraine more than three years ago — focuses on sapping the Kremlin’s income by imposing restrictions on energy traders and financial institutions, many of them in third countries. 5. Telling Ukraine to buy European? When it comes to boosting Ukraine’s access to arms, governments are split over whether Kyiv should be urged to buy from Europe, and not the U.S., with the proposed €140 billion loan. Some leaders are insisting European preference should be a condition — with others challenging whether the EU has any right to tell the war-torn country what weapons to buy. 6. Social media ban for kids  While leaders agree more should be done to protect kids online, they’re at loggerheads over what any new rules should look like.  Earlier this month, 25 EU countries plus Norway and Iceland signed a declaration backing a minimum age for children to access social media. The leaders are expected on Thursday to endorse a “possible digital age of majority,” according to the summit’s draft conclusions, obtained by POLITICO. But while France and Slovakia support a full ban before the age of 15 or 16, others, like the Netherlands, Greece and Spain, believe requiring parents to consent regarding their kids is good enough, setting up a fight over the exact settings of such a ban. German Chancellor Friedrich Merz is seizing the moment to urge the European Commission to overturn its de facto combustion engine ban. | John Macdougal/Getty Images 7. Trouble in paradise over U.S. Big Tech reliance EU leaders are set to back a “sovereign digital transition” at the summit, but their words will mask a rift between France and Germany over how to deal with America’s overwhelming dominance in technology. The real talks on that are expected next month at a Nov. 18 gathering between the two in Berlin. 8. Deregulation drive The EU’s 27 member countries might not agree on a whole lot, but cutting red tape is a rare strategy that enjoys almost universal consensus. Thursday’s summit will see countries instruct the Commission to speed up its simplification drive “as a matter of utmost priority,” according to the draft conclusions. It’s an issue close to von der Leyen’s heart — she has made tearing up onerous rules and empowering European firms a core goal of her second term.  The simplification drive is also good news for U.S. President Donald Trump, who has moaned about the EU’s regulatory overreach and its effect on American businesses. Under a trade deal von der Leyen struck with Trump in Scotland earlier this year, the EU promised its environmental regulations would “not pose undue restrictions” (though the Commission has stressed it will not lower the EU’s standards).  9. Can we talk about cars, please German Chancellor Friedrich Merz is seizing the moment to urge the European Commission to overturn its de facto combustion engine ban, with the support of Slovakia, the Czech Republic, Poland and Austria. But France has other ideas, and put forward a proposal with Spain earlier this week that would allow flexibilities on the 2035 legislation — although only for automakers that reach yet-to-be-defined local content requirements. Both capitals want a final chance to influence the Commission’s forthcoming reform of the 2035 legislation. Last week, Slovak PM Robert Fico threatened to block the latest sanctions package if the EU didn’t come up with a plan to help his country’s struggling automotive sector first. But the Slovak leader lifted his veto Wednesday night in return for concessions to be spelled out in the Thursday summit statement. 10. Migration Few issues are as existential for the bloc as migration, a topic that has propelled right-wing and far-right parties (and in some cases Euroskeptics) into government across Europe.  Europe’s home affairs ministers convened in Luxembourg earlier this month to hash out strict new rules, including creating return hubs and solidarity measures for countries under migratory pressure. A plan to decide which countries those are, and how to help them, was due last Wednesday but has been delayed. Slovak PM Robert Fico threatened to block the latest sanctions package if the EU didn’t come up with a plan to help his country’s struggling automotive sector first. | Marco Tacca/Getty Images This summit will see leaders call for that work to be “intensified … as a matter of priority,” according to draft conclusions (and for Europe’s mainstream politicians facing a surging far right, it certainly is a priority). But a Commission official told POLITICO no real breakthrough is expected on Thursday. 11. And finally … another day of talks. When he took up his role, Costa pledged to make European Councils one-day affairs, and not to let them drag over into two. So far, he’s been successful. But with some officials already expecting talks to go late into the night, this time that could be a tall ask. Gabriel Gavin, Hanne Cokelaere, Zia Weise, Louise Guillot, Camille Gijs, Gregorio Sorgi, Jacopo Barigazzi and Jordyn Dahl contributed to this report.

BRUSSELS — China and the EU will “intensify contacts at all levels” on Beijing’s expanded export controls on critical raw materials and magnets, the EU’s Commissioner for Trade Maroš Šefčovič told reporters on Tuesday. Wang Wentao, the Chinese trade minister, has accepted an invitation to come to Brussels to discuss the restrictions, Šefčovič said after the two talked on a call earlier. “Our discussion lasted almost two hours,” he told press briefing in Strasbourg. “And at the conclusion of this discussion, I invited the Chinese authorities to come to Brussels in the coming days to find urgent solutions. Minister Wang Wentao has accepted this invitation.” Beijing earlier this month expanded the list of materials and products for which importers have to request export licenses. Rare earths and magnets, the bulk of this round of restrictions, are essential in any electrification process. Šefčovič said EU companies had submitted around 2,000 “priority applications” to the Chinese authorities, while only half of them “were properly addressed.” He added that he had reupped the lists with Wang. “We have no interest in escalation,” the trade commissioner told reporters. “However, this situation casts a shadow over our relationship. Therefore, a prompt resolution is essential.” In a sign of the seriousness of the supply crisis, the European Commission said in its annual work programme for 2026 on Tuessday that it would start stockpiling critical raw materials that are vital to industries from defense to carmaking. Max Griera Andreu contributed to this report.