TL;DREU trade chief Šefčovič wants a new law forcing companies in sensitive sectors to have at least three suppliers, modelled on the Energy Union.
EU trade commissioner Maroš Šefčovič has called for a new “diversification instrument“ to reduce Europe’s dependence on single suppliers of chips and rare earths. He made the proposal at the European Policy Center’s Brussels Economic Security Forum on Friday. The tool would force companies in sensitive sectors to source from at least three different suppliers.
“If it’s critical supplies, you have to have three different suppliers to make sure that you cannot be punished because of a political reason,” Šefčovič said. He cited the Energy Union as his model, an initiative he previously led to wean Europe off Russian energy after the 2014 annexation of Crimea.
The urgency is real. The EU relies on China for more than 90% of its rare earth supplies. Beijing imposed export controls on rare earth magnets last October during a tariff dispute with the United States, and halted chip shipments from Chinese-owned Nexperia after the Dutch government seized control of the company.
Those disruptions hit European carmakers and exposed the bloc’s vulnerability. “Recent industrial cases, in particular supplies of chips and rare earths, have reinforced my conviction that a step change is necessary,” Šefčovič said. “Every high-risk sector must be weaned off single-supplier dependence.”
