Highlights

• A peer-reviewed study reveals Europe's dangerous dependency on Chinese rare earth element exports, with 98% of imports coming from China.
• China's growing domestic economy is limiting rare earth element exports to Europe, potentially compromising solar, wind, and electric vehicle industries.
• European policymakers must urgently develop diversification strategies to secure rare earth supplies and protect green energy ambitions.

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A  peer-reviewed study published in Renewable Energy (Volume 238, January 2025) delivers a stark warning to European policymakers: China’s control over rare earth element (REE) exports is not just an economic liability, but a geopolitical vulnerability that threatens the continent’s clean energy transition. Authored by Oleg Mariev (Ural Federal University, Russia) and Dmitri Blueschke (Alpen-Adria University, Austria), the study uses a sophisticated gravity model to examine the dependency between Chinese REE exports and Europe’s renewable energy output—focusing on solar and wind—between 1990 and 2020.

Key Findings

The data show an unmistakable link between Chinese REE exports and solar and wind energy growth in Europe. For solar, the supply correlation intensifies under high geopolitical risk, affirming that European demand for Chinese REEs spikes during market or political uncertainty. Wind energy shows similar dependency but is more sensitive to transportation costs and supply shocks. The most provocative finding: as China’s own economy grows, its REE exports to Europe decline—suggesting that domestic consumption or strategic withholding may be limiting foreign access.

Implications for Europe

Europe's energy ambitions—enshrined in the Green Deal and the Critical Raw Materials Act—remain dangerously exposed. Despite decades of rhetoric around diversification, the study reveals that 98% of Europe’s rare earth imports still come from China. This leaves critical sectors like electric vehicles, solar PV, and wind turbine manufacturing hostage to Chinese economic cycles and policy decisions. Even more troubling, the study finds that Europe’s economic growth has no statistically significant influence on REE import volumes from China—reinforcing its reactive, not proactive, position in this trade relationship.

Methodology

The authors employed the “quantiles via moments” (QvM) panel technique to account for economic, geographic, and geopolitical variables across 14 European nations. Key controls included rare earth prices, oil prices, and global vs. Chinese geopolitical risk indices. The results held across multiple quantiles, suggesting systemic vulnerability, not just episodic fluctuation.

Limitations

While rigorous, the study is retrospective, ending in 2020—just before the pandemic supercharged energy and mineral markets. Furthermore, it does not model substitution, recycling, or Western rare earth development projects that have emerged since 2021. However, these factors are likely insufficient to dislodge the underlying structural dependence on Chinese REE.

Conclusion

This study delivers a loud wake-up call: Europe’s green energy transition is structurally entangled with China’s mineral exports. Policymakers must treat rare earth security as a cornerstone of energy policy—not an afterthought. Without credible diversification—including domestic mining, Western-aligned partnerships, and price transparency—Europe’s renewable ambitions may be compromised before they’re realized.

SOURCE: Mariev, O., & Blueschke, D. (2025). Interplay of Chinese rare earth elements supply and European clean energy transition: A geopolitical context analysis. Renewable Energy, 238, 121986. https://doi.org/10.1016/j.renene.2024.121986 (opens in a new tab)