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EU and US critical raw materials strategies: EU-US Explainer
EU and US critical raw materials strategies
Nera Kuljanic with Alysia James, European Parliamentary Research Service
Summary
With expanding clean technologies, the boom of data centers, and increased security needs, comes a growth in demand for critical resources. Known as critical and strategic raw materials (CRMs and SRMs) in the European Union (EU), and critical minerals (CM) in the United States (US), these resources are invaluable to both European and American industries. Abundant within the Earth's crust, but controlled by only a handful of countries, high-risk, low-diversity supply chains have raised the alarm globally about how to procure these resources needed to ensure the supply of strategic industrial output.
Statement of purpose
This document is prepared for, and addressed to, the Members and staff of the European Parliament as background material to assist them in their parliamentary work. The content of the document is the sole responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official position of the Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy.
Background: Value chains and resource acquisition
China's dominance in mining and processing of rare earths and other critical resources, paired with its increasingly tight control over exports, is impacting on markets and exposing the dependency of many companies across the globe on a single country as supplier. At the same time, UN Trade and Development projections estimate that global demand for some critical minerals could increase fourfold by 2030, with certain commodities, like lithium, potentially increasing over 1 500 % by 2050. The International Energy Agency envisages supply shortfalls for some of the most vital resources by 2035, such as copper, in high demand for AI data centers. This is paired with significant anticipated shortfalls in global investment for new mining and refinement projects, estimated at between US$180 and US$270 billion by 2030.
The EU and the US share a common strategic vulnerability in processing and refining capacity for CM, compounded by the speed mismatch between supply-chain leverage and industrial policy response and by persistent financing, institutional, and governance challenges. Growing attention to this global value-chain issue over the past decade has led both the EU and US to seek new paths to shore up domestic supplies, expanding global trade agreements, memoranda of understanding (MoU), and public–private partnerships.
European Union efforts to shore up supplySample heading of section
The EU is almost exclusively reliant on imports of 15 CRMs important for the energy transition. This includes rare earths, which are also vital to the defence and tech industries. The EU's CRMs strategy rests on a three-pronged approach, outlined in the 2024 Critical Raw Materials Act (CRMA), setting benchmarks to shore up supplies of 34 CRMs designated based on their economic importance and supply risk, of which 17 are considered ‘strategic' (SRMs) because of their relevance for the green and digital transition, as well as for defence and aerospace, forecast growth in demand and difficulty of increasing production. By 2030, the EU aims to control at least 10 % in extraction, 40 % in processing, and 25 % in recycling respectively of its annual consumption of CRMs resources. This goal will be achieved through developing domestic supply chains, diversifying supply through global partnerships, and fostering sustainable circularity.
The CRM Board, composed of EU Member State representatives and chaired by the European Commission, is tasked with providing opinions on strategic projects and their implementation, developing critical supply chain monitoring, and coordinating strategic CRM stocks. Industry, academic, and institutional partners in the Member States collaborate on innovative solutions to secure supplies and improve the raw materials sector in Europe. A Critical Raw Materials Centre, expected to be established in 2026, will gather intelligence on CRMs value chains and markets to guide investment, stockpiling, and joint purchasing decisions. The CRMA is bolstered by a number of initiatives, projects and strategic partnerships with non-EU countries. So far, these efforts have culminated in 16 MoU, including the EU-US MoU and Critical Minerals Action Plan, signed in April 2026. The 2025 RESourceEU Action Plan further supports these objectives, in particular for batteries, rare earths and raw materials for the defence industry. The Commission is establishing an emergency task force to handle potential crises, including a possible trade dispute with China over rare earths supply, and is working on legislation that could require companies to reduce reliance on a single supplier for key industrial inputs.
European Parliament role and responsibilities
The Parliament's Committees on Industry, Research and Energy, and on the Internal Market and Consumer Protection are responsible for several aspects of the EU's CRM agenda and the issues covered by the US-EU policy framework. The swift passage of the CRMA in 2023 demonstrated the Parliament's commitment to ensuring the EU has access to the CRMs it needs to reach its strategic goals. In a July 2025 resolution, the Parliament condemned China's export restrictions and called for accelerated CRMA implementation and supply chain diversification. Currently, the Parliament is considering amendments to the CRMA which would streamline circularity rules to boost recycling capacity and strengthen the secondary market for CRMs. In June 2026, at the 91st Transatlantic Legislators Dialogue interparliamentary meeting, 12 Members of the European Parliament and four Members of the US Congress discussed CM and economic security, among other topics. An informal Working Group on Industrial Policy within the Committee on Industry, Research and Energy oversees the implementation of the CRMA along with the Net-Zero Industry Act and Chips Act. The Parliament also plays an oversight role on the CRMs Board as a permanent observer on the primary board and its subgroups.
United States efforts to shore up supply
The US Administration under President Trump has placed heavy emphasis on de-risking CM supply chains. The US recognises 60 minerals and other materials as critical to the economic and national security of the country. More than 50 % of most of those, at least 12 exclusively, come from foreign sources. President Trump has issued Executive Orders and Proclamations to reduce US dependence on foreign critical minerals. Actions include expanding emergency powers enacted in 2020 due to threats from foreign CM export restrictions, imposing a 50 % tariff on copper imports, fast-tracking certain seabed mining projects and expanding public-private involvement in deep-sea mining operations, prioritising international trade negotiations and agreements to secure American supply of processed CM and their derivative products, and authorising the use of defence funds to expand domestic mineral capabilities.
The US has also enacted several initiatives to secure CM resources for key industries. Project Vault establishes a domestic stockpile of CM, centred on private sector security. The Mine-to-Magnet strategy, established under President Biden, aims to achieve total rare earths supply chain security for the US defence industry by 2027. The Supply Chain Resiliency Initiative will finance projects in partner countries with long-term supply contracts with US companies, facilitating CM access for those businesses. These initiatives are part of a wider focus on public-private and bilaterial partnerships, and an increasing push for plurilateral alliances. One of these plurilateral alliances is Pax Silica, the State Department's 24-member flagship effort on AI and supply chain security, signed by the EU on 25 June 2026. Another, the Forum on Resource Geostrategic Engagement (FORGE), follows the 15-member Mineral Security Partnership established under President Biden in 2022, and seeks to unify the various MoU and partnerships held by its members under one cohesive CM market framework. The US is also developing a CM price floor system to pitch to allies. The US has pursued bilateral partnerships across regions. The 2025 US-Ukraine Reconstruction Investment Fund gives the US privileged partner offtake opportunities for future mineral resources, while Ukraine keeps ownership of its natural assets and extraction policy. A framework with Australia involves billion-dollar mutual investment commitments, joint reserve, and offtake arrangements. Action plan with Mexico focused on coordinated trade policies and potential price floors for CM imports. Agreements with Democratic Republic of the Congo and Rwanda have faced setbacks in those countries.
US Congress role and responsibilities
The key Congressional Committees shaping CM policy are the Senate Committees on Energy and Natural Resources and on Foreign Relations, and the House Committees on Natural Resources (its Subcommittee on Energy and Mineral Resources), on Energy and Commerce, and on Foreign Affairs. In the 119th Congress, the House and Senate have passed legislation allocating defence funding to domestic and foreign projects, increasing stockpiling and supply chain investments, and expanding procurement incentives, all to promote CM value chain de-risking. Ongoing legislative proposals would promote domestic mineral production and codify directives established by some of President Trump's Executive Orders. Hearings have been held to discuss CM strategies, including securing domestic supply chains, commercial diplomacy, and US interests in the Western Hemisphere. The bipartisan Congressional Critical Materials Caucus was formed in 2021 with the goal of advancing CM interests in foreign and domestic policy.
Classification
Policy areas: Energy | Industry | Foreign Affairs | International Trade | Security and Defence
Committees: Foreign Affairs (AFET), International Trade (INTA), Industry, Research and Energy (ITRE), Internal Market and Consumer Protection (IMCO)
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