AEGIS Europe Contribution to the Diversify EU Consultation
Brussels, October 2026
AEGIS Europe welcomes the Commission’s initiative to strengthen EU supply-chain resilience and reduce strategic dependencies. Diversification must go hand in hand with preserving European industrial capacity, ensuring fair competition and strengthening effective trade defence. The European Commission should avoid any mandatory diversification requirements or regulatory obligations imposed on companies. The instrument should improve resilience without creating new vulnerabilities or undermining downstream manufacturers.
Preserve and strengthen European industrial capacity. The EU should not replace dependence on one foreign supplier with dependence on another or allow its own production base to erode. Diversification should support competitive European capacity across primary production, processing, transformation and recycling, including restarting viable curtailed facilities and securing essential raw materials and secondary feedstocks. Investment support and positive incentives should help companies qualify alternative inputs, adapt processes and develop alternative sources in the EU and trusted partner countries. Strengthening Europe’s production capacity and expanding the industrial capabilities required to produce strategic materials in Europe must be central to the EU’s diversification strategy, as diversifying imports alone cannot offset the ongoing erosion of Europe's industrial base.
Use an evidence-based, value-chain approach. The Commission should clarify the instrument’s scope and apply transparent, objective criteria to identify material and harmful dependencies and determine when action is justified. Assessments should consider supplier and geographic concentration, upstream inputs, market distortions, available volumes and prices, technical specifications, substitutability, and the time and cost of switching suppliers. Some materials and grades have no immediately viable alternative; measures must reflect these constraints. Consult affected industries before acting, use existing data where possible, and avoid duplicative reporting and disproportionate burdens, particularly for SMEs.
Tackle unfair competition and circumvention. Diversification cannot succeed while EU producers face dumped or subsidised imports, global structural overcapacity and market distortions that undermine European production and alternative suppliers. The EU should strengthen and apply trade defence and level-playing field instruments swiftly and effectively, including ex officio action where appropriate, anti-circumvention measures in a value chain approach. This should address rerouting, tariff reclassification and third-country subsidiaries, as well as upstream distortions. The EU should also respond effectively to the weaponisation of dependencies, including export restrictions on critical raw materials and inputs.
Ensure proportionate measures and a level playing field. Any measure, including action on excessive supplier concentration, should be evidence-based and assessed across the full value chain. The Commission should consider the availability, affordability and technical suitability of alternatives, and impacts on downstream EU manufacturers competing with finished goods produced abroad using the same inputs. Where justified, measures should cover relevant finished products as well as upstream materials. Diversification is a complex process that often requires time and significant resources. Therefore, transition periods, targeted exemptions and regular reviews should prevent shortages and disproportionate cost increases. Measures should be legally clear and coherent with the EU’s trade toolbox.
Diversification should be assessed by continuity and security of supply, viable alternatives, affordability, sustainability and preservation of EU industrial capacity—not import shares alone. Policies should encourage resource efficiency, recycling and circularity while maintaining access to reliable international partners. Policy efforts should therefore prioritise diversification, viable European investment and expanded production capacity, without imposing purchasing or selling obligations on companies. A coordinated EU approach must ensure diversification, effective trade defence and industrial policy reinforce one another, strengthening resilient supply chains and a competitive European manufacturing base without imposing unrealistic restrictions or shifting costs onto EU producers.
Download the statement here.