China remains a leading supplier of strategic processed minerals to the European Union, but the EU’s Carbon Border Adjustment Mechanism (CBAM) applies unevenly across the materials underpinning industrial production. While Chinese aluminium, covered steel and certain ferroalloys face carbon-border exposure, magnesium, gallium, graphite, rare-earth products, ferro-tungsten and numerous other strategic materials remain outside the mechanism.
Eurostat data for 2025 show that China supplied 92% of EU magnesium imports, 77% of gallium, 68% of ferro-tungsten and 43% of natural graphite by value. China was also the leading supplier of rare-earth products. These materials serve aerospace, defence, batteries, steelmaking, electronics and renewable-energy technologies.
CBAM Covers Only Selected Processing Chains
The current framework creates different conditions for Chinese exporters depending on the product. Aluminium smelters supplying the European market face carbon-accounting requirements, while producers of magnesium metal, rare-earth oxide and natural graphite generally do not face the same direct border mechanism.
This uneven coverage means the incentive to reduce emissions to preserve EU market access varies across China’s processed-mineral industries.
Europe Retains a Need for Supply Diversification
CBAM cannot replace measures to diversify raw-material supply. Expanding the mechanism would not immediately create alternative mines, refineries or substitute technologies.
The EU’s Critical Raw Materials Act (CRMA) partnerships, recycling, stockpiling and strategic procurement therefore remain important tools for reducing reliance on concentrated external supply chains.
Proposed Downstream Extension Could Affect Industrial Goods
The proposed 2028 extension of CBAM to downstream products could bring additional industrial equipment and fabricated goods within its scope, increasing the importance of low-carbon steel and aluminium inputs.
Chinese producers with reliable emissions data may be better positioned to maintain access to the European market than competitors relying on default values.
The wider strategic competition combines Europe’s carbon-pricing framework with its supply-security objectives, while China retains an advantage through the depth of its processing capacity. CBAM affects selected parts of this relationship, but many materials central to European industrial dependence remain outside its current coverage.
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