EU supply chains
Following up on my recent posts about global Risk Management, the new EU report on supply. chains is definitely worth reading.
One of its strongest conclusions is that geopolitical uncertainty is no longer treated as a temporary shock. It is becoming part of normal business planning.
Photo: kjpargeter na Magnific
Between 2023 and 2025, EU firms reporting major problems with:
➡️ raw materials fell from 27% to 8%,
➡️ semiconductors from 15% to 3%,
➡️ logistics disruption from 28% to 12%.
But the risk has not disappeared, it has shifted.
➡️20% now point to regulatory compliance as a major obstacle and 18% to customs and tariffs. Among firms trading with the US, 67% expect tariffs to remain a long-term obstacle; for China, it is 60%.
➡️64% of EU firms consider themselves prepared for geopolitical risks. For large companies it is 73%, but among SMEs it remains below 50%. Companies are moving from emergency stockpiling toward diversification, reshoring and partner-shoring.
Some EU dependencies:
Energy — the EU still imports a significant share of the energy it consumes, particularly oil and gas.
Critical Raw Materials — Europe remains heavily dependent on external suppliers for rare earths and materials essential for EVs, wind turbines, electronics, defence and batteries.
Semiconductors — Europe represents only a limited share of global semiconductor production and remains dependent on third countries, particularly for advanced manufacturing.
AI infrastructure and GPU — modern AI depends on highly concentrated global supply chains for accelerators, advanced chips, cloud infrastructure and manufacturing capacity.
Medicines — many critical medicines and active pharmaceutical ingredients continue to depend heavily on production outside Europe.
The EIB report shows how disruption of the Strait of Hormuz can affect not only oil and LNG, but also fertilisers, sulphur, methanol, aluminium and helium, the latter being important for semiconductors and MRI equipment.
Cybersecurity is undoubtedly high on the global risk list. But let’s be realistic: one of the largest systemic risks increasingly comes from the combination of Climate Risk and geopolitical instability.
Drought can affect waterways, agriculture and energy.
Floods interrupt production and logistics.
Heat stresses infrastructure.
Conflicts can close transport routes or restrict access to strategic materials.
Put everything together and we get quite an explosive mixture.
Author: Sebastian Burgemejster
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