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Rare Earth Elements (REE) and Rare Earth Minerals (REM) have quietly become the backbone of modern technology—and now, they’re at the center of a geopolitical chess game. In 2025, China’s tightening grip on REE exports has raised red flags across the globe, prompting urgent regulatory responses and supply chain overhauls.
Let's understand what China’s restrictions mean for manufacturers, what actions the EU and U.S. are taking, and how companies can adapt using tools like the EU Critical Raw Materials Act (EU CRM Act) and REE traceability frameworks.
What Are REEs and REMs?
REEs are 17 critical elements (lanthanides plus scandium and yttrium), while REMs refer more broadly to their naturally occurring mineral forms. These materials are essential for:
- EV motors
- Wind turbines
- Smartphones
- Military guidance systems
- Semiconductors and sensors
China’s 2025 Export Controls for REEs: What Changed?
In early 2025, China intensified its export licensing regime for REEs and rare earth magnets. Key changes include:
- Stricter approvals for overseas shipments
- Quotas on magnet-grade Neodymium, Dysprosium, and Terbium
- Mandatory end-use disclosure for foreign buyers
This effectively gives China greater control over downstream applications of REMs—and positions REEs as a tool of foreign policy.
“This is no longer about economics. It’s about leverage.” — U.S. Department of Commerce official, April 2025
India’s EV and electronics sectors have already reported production delays due to REE shipment blocks, calling for urgent policy interventions and domestic sourcing plans.
In Europe, the automotive supply chain is already facing plant shutdowns and halted production lines as inventories run dry. According to CLEPA (the European Association of Automotive Suppliers), only a quarter of the hundreds of export license applications submitted to China have been approved. Licensing inconsistencies, IP disclosure risks, and a lack of transparency are creating a fragile situation for combustion and electric vehicle production alike. CLEPA has publicly urged the EU and China to establish clearer and fairer trade terms to prevent long-term damage to Europe's industrial base.
Global Reaction for REE: Policy, Panic & Procurement
- EU: Critical Raw Materials Act (EU CRM Act)
The EU CRM Act, now in force since May 2024, places REEs and REMs in the strategic raw materials list.
- Targets 10% EU domestic extraction
- 40% local processing and 25% recycling by 2030
- Mandates risk mapping and reporting by companies in strategic sectors
- U.S.: Defense-Driven Acceleration
- Invoked the Defense Production Act to scale domestic REE supply
- Commerce Department investigating REE import dependency (Q2 2025)
- U.S.-Ukraine mineral deal signed to diversify REM sourcing
- Canada & Allies
- Launching public-private partnerships for rare earth mining
- Streamlining permitting for domestic REM operations
Business Impact: Why You Can’t Ignore This
If you rely on REEs/REMs for production—even through Tier 2 or 3 suppliers—you are now:
- Exposed to price volatility and delivery delays
- Expected to declare REE origin and presence in product-level disclosures
- At risk of non-compliance under EU, U.S., or ESG frameworks
Action Plan for Compliance Leaders
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Map REE Exposure Across Products
- Identify critical components (magnets, capacitors, sensors)
-
Collect REE Supplier Declarations
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Track Country of Origin
- Focus on China-origin declarations and alternatives
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Align with the EU CRM Act
- Build reporting mechanisms for risk, recycling, and substitution
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Monitor Regulatory Shifts
- Set up watchlists for China’s MIIT announcements, U.S. DoD notices, and EU CRM updates
How Acquis Helps
Acquis offers a purpose-built REE Module with:
- Supplier outreach workflows for REE presence & origin
- Country-of-origin tracking and China-origin flagging
- Support for digital traceability (FMD, PEC systems)
- Pre-built dashboards for EU CRM Act, U.S. DoD, and ESG compliance
Reflections
China’s restrictions have redrawn the map on Rare Earth Elements compliance. What was once a niche sourcing question is now a strategic business risk.
If your compliance team isn't tracking REEs yet—start now.
Rare Earth Elements (REE) and Rare Earth Minerals (REM) are more than just materials. In 2025, they're a measure of sovereignty, security, and sustainability.
