EU and NATO Allies must keep, process and recycle critical materials for defence
10 November 2026
Europe is exporting scrap containing the critical materials its defence industry needs, just as China tightens its grip on supplies for weapons and military equipment, according to a new report from the European Initiative for Energy Security (EIES).
The report calls for Europe to build defence-purposed recycling so that it keeps recovered materials for military use and can provide resilient supplies for strategic industries.
China produces 70% of the world's rare earths, processes 90% and makes 93% of the magnets used in motors and guidance systems.
Critical raw materials such as rare earths, tungsten and titanium are essential to fighter jets, missiles, radar, drones and armoured vehicles.
In October 2025, Beijing announced that it would in principle refuse rare-earth exports to foreign military users. The rule was suspended (now to January 2027) under the US-China trade truce. But in July, China put Rheinmetall and 13 other European organisations on its export control list.
Recovering raw materials from scrap such as factory offcuts, old batteries, electronics and military equipment offers Europe a secure alternative source of supply. Yet much of it is exported:
- Aluminium scrap exports reached a record 1.26 million tonnes in 2025, with foreign buyers paying up to 26% more than European processors.
- At least 60% of the material recovered from used batteries (known as black mass) is exported.
- Up to 96% of titanium used to machine aerospace parts ends up as offcuts, much of it exported.
- Less than 1% of rare earths are recycled, with magnet scrap increasingly shipped abroad, even as recycling could meet 20% of the EU's 20,000-tonne annual demand for permanent magnets.
“Europe cannot rearm on materials it gives away. Recycling allows us to turn scrap into supply for European security and defence. Scrap must be treated as a strategic asset, backed by investment in domestic recycling.”
Petya Barzilska, Head of Policy at EIES and co-author of the report
The United States has already acted: since August, black mass and tungsten scrap must be sold to US buyers, US defence rules now accept recycled material processed at home or by allies, and the Pentagon is funding magnet recyclers. Europe risks being caught in the middle, supplying materials others compete for instead of securing its own.
Plowshares into Swords: Recycling for Security and Defence calls on the EU and NATO Allies to:
Move feedstock to European plants.
Introduce an EU fast-track regime for rare-earth waste and phased export restrictions on magnet scrap and magnet-bearing waste, tied to new processing capacity.
Design for European recycling.
Set recycled-content requirements for permanent magnets and defence steel and use defence procurement to create demand for recycled material.
Make plants viable.
Fund grid access and lower power costs for strategic recyclers through dedicated power purchase agreements.
Build defence traceability.
Explore blockchain-based traceability, set clear rules on when material counts as European, and build an Allied supply chain for defence-grade recycled steel.
Establish defence-grade closed loops.
Recover magnets securely from decommissioned vehicles and equipment, with long-term offtake deals returning them to Allied supply chains.
These critical materials are also essential for wind turbines, EVs, batteries and power grids. Recycling them in Europe would increase security of supply and drive innovation in clean energy, automotive and other industries to reduce dependence on China.
Europe has begun to act. The EU's Critical Raw Materials Act aims for recycling to meet 25% of strategic raw material needs by 2030, and negotiations on the final text, which opened on 4 November, include proposals to restrict exports of magnet scrap.
However, these measures alone won't create new defence supply, and the proposals to water down the Industrial Accelerator Act's local content requirements would result in weak demand signals and so weak investment.
In addition, EU regulations restrict the movement of recycling feedstock across Europe, helping to incentivise exports, while strict certification and sourcing rules limit the use of secondary materials in defence and other supply chains.
“China has made clear that its materials are not for Europe's armies. Recycling our own is a secure route to scale up European and NATO defence.”
Albéric Mongrenier, Executive Director at EIES
Media contact
Philip Armstrong, Communications Director: media@secureenergy.org