After the Russian invasion, Germany seeks to reduce its economic dependence on China

After the Russian invasion, Germany seeks to reduce its economic dependence on China

Germany’s dependence on Chinese raw materials is increasingly attracting the attention of the government, which continues, together with the European Union, to work at full speed to free itself from Russian economic dependence. An analysis by Oliver Noyan, for EURACTIV Germany.

In close cooperation with the EU, Germany wants to shed its unilateral dependence on China, the German government has said.

The country’s economy ministry is already hard at work as it is currently working on a new commodity strategy and aims to expand domestic mining and diversify supply chains.

This new push towards greater strategic autonomy “concerns Russia on the one hand, where we must break away from unilateral dependence on cheap energy, and China on the other hand, with a view to independence from raw materials”Franziska Brantner, a member of the Bundestag and member of the German Green Party, told EURACTIV.

Over the past decades, the EU has become increasingly dependent on China for critical raw materials. Almost two resources say “criticism” out of three now arrive from China.

“For too long we have simply operated on the principle of buying where it is cheapest, and it is often raw materials that come from China”said Ms. Brantner.

Instead of maintaining unilateral dependence on countries like China and Russia, the German government therefore plans to expand cooperation with other non-Western states and encourage German companies to invest in these third countries. .

Growing needs

The demand for essential raw materials is expected to increase rapidly in the near future, and grow by around 500% by 2050, according to World Bank estimates.

“Due to the exponential growth in demand, there is a risk that these existing dependencies will deepen even further”Bernd Schäfer, CEO of EIT Raw Materials, told EURACTIV.

According to him, the EU must now step up its efforts to diversify supply chains and target the extraction of these critical raw materials across the bloc.

The European Commission has already taken some initiatives in this regard. In particular, it has increased investments in the circular economy, which aims to reduce the demand for critical raw materials, while recycling raw materials already transformed into products.

This principle is already enshrined in some EU legislation. For example, in the Battery Regulation, which in its current form stipulates that a certain percentage of the weight of batteries must be recycled for the recovery of raw materials.

A similar approach is also taken in the Ecodesign Directive, currently under review. Rare earths in particular have a current recycling rate of less than 4%, which is why the European Commission sees a lot of room for improvement in the recovery of raw materials, especially in this area.

Commodities Act

However, the real turning point on the issue of raw materials independence is yet to come, as the EU executive is currently working on its own proposal for strategic independence for critical raw materials – the Raw Materials Act.

Although it is not yet clear what form this new legislative proposal will take, it is expected that many of its provisions will be inspired by the European semiconductor legislation. The latter addresses similar issues related to bottlenecks in semiconductor supply.

Among other things, it plans to more than double semiconductor production capacity in Europe by 2030.

“We need a level playing field, so if we apply high sustainability standards to the extraction of raw materials at home, this must also apply to imported raw materials. Also, we need more control tools. »

(Edited by Theo Bourgery)


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