Germany's Federal Ministry for Economic Affairs and Energy published plans on Tuesday to diversify the sourcing of crucial components used mainly in offshore wind turbines by 2035 to reduce dependency on China,part of the government's broader"de-risking"strategy,Reuters reported.
Wind generation plants,especially out at sea,need powerful permanent magnets,which nearly all come from China,the ministry said,as it published a road map setting out alternative sourcing options,potentially including Australia and Japan.
Permanent magnets,particularly high-performance ones,are essential components of modern wind turbines.China provides 90 percent of permanent magnets,not just for the wind sector but also for electric cars,machine building and military industries.This advantage is no accident-it stems from its years of efforts to build a complete industrial chain,from rare-earth mining and refining to magnet manufacturing.
Decades of technological accumulation,industrial cluster development,and market validation have endowed Chinese products with an unparalleled comprehensive advantage in terms of performance stability,price competitiveness,and supply reliability.The global reliance on Chinese permanent magnets is essentially the result of long-term market dynamics.
At a critical stage when the global energy transition is accelerating and the wind power industry is booming,Germany's plan,seemingly aimed at securing the supply chain,faces severe practical challenges and may actually bring more risks to the industrial chain.
This is because the construction of a rare-earth magnet industrial chain requires decades of technological accumulation and huge capital investment.If any country attempts to cultivate domestic production capacity or establish a stable alternative supply chain in the short term,it will not only have to bear the uncertainties of technological research and development but also face soaring costs.
Germany's plan seems like a microcosm of the EU's"de-risking"strategy.In March,the European Commission adopted,for the first time,a list of 47 Strategic Projects to boost domestic strategic raw material capacities.It's a major step in the implementation of the Critical Raw Material Act,which attempts to ensure European extraction,processing and recycling of strategic raw materials to meet 10 percent,40 percent and 25 percent of the EU's demand by 2030,the EU claimed.
The European Raw Materials Alliance has declared that the EU should invest up to 200 million euros($232 million)a year to boost its output of specialized rare-earth magnets,as part of a plan for the EU to supply one-fifth of its own rare-earth magnet demand by 2030.
Yet,even if the EU makes significant investments to achieve this goal,it remains technologically and economically unfeasible for the region to reduce its reliance on China in the short term.China has the majority of production capacity for permanent magnets and holds a dominant position in patents for high-performance magnets.Over the past decade,approximately 70 percent of the world's patent output for rare-earth permanent magnets has originated from China.This technological advantage cannot be overcome through politically-motivated,short-term investments.
Should Europe persist with this high-cost"de-risking"strategy,it risks falling behind in the global green energy race while incurring substantial economic and time costs.Rising manufacturing expenses could undermine Europe's competitiveness in renewable energy,directly hindering progress toward carbon neutrality goals.Additionally,offshore wind projects,which typically have development cycles spanning several years,face significant disruption risks due to supply chain restructuring.
On the issue of permanent magnets,the EU must recognize that China's objective is to"regulate exports"rather than"prohibit exports,"and to"facilitate compliant trade"rather than sever normal commercial relations.Instead of being trapped in the anxiety of"decoupling and chain-breaking"or the myth of"strategic weaponization,"it would be better to invest more energy in adopting more positive measures regarding market access for Chinese enterprises and products.
The EU should not repeatedly impose restrictions through tariffs and other means,much less use so-called security concerns to squeeze Chinese enterprises and products out of the European market.In this way,both China and Europe can ensure through honest dialogue and cooperation that this critical resource continues to contribute to global technological progress and green transformation within a peaceful and sustainable framework.
China's door to cooperation is always open,and the key lies in both parties returning to friendly dialogue to openly address issues of mutual concern.Only through constructive dialogue and partnership can both sides ensure that this critical resource continues to drive global technological advancement and the green transformation within a sustainable framework.
