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The EU has unveiled a €3bn (£2.63bn) strategy to reduce its dependency on China for critical raw materials amid a global scramble triggered by Beijing’s “weaponisation” of supplies of everything from chips to rare earths.

The ReSourceEU programme will seek to de-risk and diversify the bloc’s supply chains for key commodities with a funding initiative to support 25-30 strategic projects in the sector.

The EU said the strategy was designed to reduce the impact of “market shocks” such as the recent disruption to the car industry caused by the recent, now lifted, ban on exports of chips by China in response to the Dutch government taking control of the Chinese-owned chip firm Nexperia.

Senior EU officials said that “while the direction is clear” there was also a need to “accelerate the process” as China continued to “weaponise” its hold on raw materials for “geopolitical purposes”.

These projects cover rare earths – a group of 17 heavy metals that are actually abundant but difficult and costly to extract – as well as the elements gallium, germanium, cobalt and lithium, used in batteries for electric vehicles.

The plan centres on creating a European hub for critical materials that would pool company orders and build joint stockpiles for key projects including urgent defence programmes, an effort driven by the EU industry commissioner, Stéphane Séjourné

The discussion comes as the French president, Emmanuel Macron, visits China, which has threatened to expand its controls on the exports of rare earths, including magnets used in everything from car and fridge doors to MRI scanners.

As part of the new strategy, the EU will redouble efforts to recycle aluminium with fresh restrictions on scrap exports in 2026 of the metal and of scrap copper if necessary.

It will also build a raw materials trading platform that can “aggregate demand” and procurement across the bloc and launch a stockpiling pilot in early 2026.

Brussels has long complained that no matter how many defence measures it puts in place to protect against dependency on China, industry suppliers still buy from the country because it is cheaper than Chile, Brazil, Australia and Canada.

The EU will also look at financial supports to bridge the cost of buying from pricier alternative locations.

The strategy is designed to reboot the 2024 Critical Raw Materials Act that set targets for supplies for 2030 including capacity to extract 10% of the bloc’s needs locally, process 40%, and recycle 25%.

Illustrating the scale of the reliance on Beijing, EU officials revealed that the bloc buys about 20,000 tonnes of permanent magnets a year, used in everything from car and fridge doors to MRI machines.

Of that “17,000 to 18,000” tonnes come from China, 1,000 are produced in the EU with the remainder from other countries.

Up to €3bn in funding will be mobilised within the next 12 months with €2bn a year made available by the European Investment Bank in the form of loans, venture debt and private debt plus financing such as loans already issued to a Finnish lithium mine project Keliber.

This dwarves the £50m announced last month by Keir Starmer for a similar initiative in the UK.

Concerns that Europe could fall behind the US, Japan, Canada and Australia are widespread in industry, with large American car companies already working with mining conglomerates to reduce reliance on Beijing.

Efforts by the US, the EU and the UK to reduce dependency on China for supplies took on a fresh urgency in October when China threatened to introduce sweeping controls on global exports of rare earths from December.

That threat was lifted as part of the tariff deal struck between Xi Jinping and Donald Trump in South Korea six weeks ago, but the reprieve only holds for 12 months, preserving China’s future leverage on supply chains.

The commission has previously estimated that the demand for rare earths and lithium alone is expected to increase five to 12 times and nearly 60 times, respectively, by 2050. In 2020, more than 98% of the EU’s rare earths imports came from China and 78% of its lithium needs were sourced from Chile.

ReSourceEU is part of a wider package being unveiled on Wednesday that the commission calls its economic security doctrine, intended to make European firms more self-sufficient.

Europe’s only lithium hydroxide factory, operated by AMG Lithium in Germany, cost £150m to build, and the company was already in the mining business.

Earlier this year, its chief executive, Stefan Scherer, said that the EU might as well “apply to be a province of China” so little was being done in practice to cut reliance. “Europe has to become independent of China, otherwise it’s just blah blah blah,” he said.