Why Europe should bid for Greenland

Europe is a prisoner of geology – here’s how it can break free.

In the 1950s, two-thirds of the UK’s oil supply passed through the Suez Canal, a narrow 200-meter-wide gap that quietly dictated Britain’s energy security and economic growth.

When Egyptian President Gamal Abdel Nasser nationalised the canal in 1956, it kicked-off the Suez Crisis. The UK faced fuel shortages as policymakers scrambled to reroute supplies, uncovering the dangers of a system that leaned heavily on a single chokepoint.

Looking back, it feels insane that an entire country’s supply chain could hinge on one narrow passage.

Yet today, Europe faces its own ‘Suez Crisis’ –?not over oil or a canal this time, but critical metals.

China’s chokehold on critical metals

The transition to renewable energy has created a new dependency. The metals used in solar panels, wind turbines, and batteries are irreplaceable – and almost every road leads to China.

China’s dominance is pretty staggering: they control production of over 29 key commodities, supplying over 90% of many critical metals. Even when materials are mined elsewhere, they typically flow through Chinese refineries, which process two-thirds of the world’s lithium and cobalt.

In short, Europe’s climate ambitions?are overwhelmingly tied to minerals controlled by a single source. Sound familiar?

To be clear, this is not an anti-China argument. For years, the West has benefited from China’s ability to refine metals at scale and at low cost. Nor does it dismiss China’s progress in renewable energy – last year, they added more solar panels in 2023 than the US did in its entire history.

Instead, it’s about the lesson that China has long mastered: the supply of one nation’s energy should never depend entirely on another.

China understands that ‘climate’ isn’t just about emissions –?it’s about sovereignty. Access to domestic resources reduces economic coercion and strengthens national security.

Europe is a prisoner of geology

Europe's answer to this challenge is the Critical Raw Materials Act, which aims to:

• Source 10% of critical metals domestically
• Process 40% within the EU
• Ensure no more than 65% of any material comes from a single source

But there are two big problems:

Europe doesn’t have the geological goods: Despite once producing 40% of global mining output in the early 1900s, the continent lacks centralised deposits of many critical minerals. What reserves exist are concentrated in the Nordics, or are scattered in low concentrations across the continent.

Permitting is a bottleneck: Opening a new mine already takes up to a decade, while global exploration success rates hover at just 0.5%. Add in a healthy dose of NIMBYism, and the process in Europe could take even longer.

The EU is attempting to fix this, setting maximum approval timelines of 27 months for mining and 15 months for processing and recycling. Meanwhile, France, Germany, and Italy are pooling resources into a €2.5 billion fund to secure access to critical metals.

The EU also plans to use its trade balance to build new partnerships with countries in Africa, although competing with China’s multi-billion-dollar investment will be difficult.

This is a start, but it doesn’t go far enough.

Enter Greenland

Greenland’s population is just 60,000 people, but the island has an enormous geopolitical significance.

A former Danish colony, Greenland joined the EEC in 1973 before voting to leave in 1985 over its sovereignty and fishing rights. Today, Denmark provides it with $500 million a year in support, and its economy is largely based on fishing. This is likely to change.

Greenland has 43 of the 50 minerals deemed ‘critical’ by the US government, including what may be the largest rare earth deposits outside China. The island is estimated to hold 42 million tonnes of rare earth oxides –?just under China’s entire global reserves.

As climate change melts Arctic ice, these resources are becoming more accessible, drawing the attention of the US. Europe should be seriously interested too –?this a rare opportunity to access a stable, long-term supply of critical minerals.

While I realise the irony of capitalising on resources uncovered by climate change, Europe cannot afford to sit on the sidelines.

Greenland’s reserves could single-handedly help the EU hit its Critical Raw Materials Act targets, reducing reliance on China while strengthening Europe’s industrial base.

What can Europe offer?

To win Greenland’s trust, Europe’s approach must be different. It won’t be able to outspend the US, but it can offer something more valuable: economic security without compromising Greenland’s sovereignty –?something the US might not guarantee.

Instead of a resource grab, Europe should position itself as Greenland’s most reliable customer, providing access to a vast market but without a controlling stake.

It’s unclear on which direction Greenland wants to go –?69% want more cooperation with the US, while 68% want more cooperation with Denmark.

But here’s what I think Europe should offer:

1. A Greenland wealth fund: Modelled after Norway’s trillion-dollar oil fund, the EU could help establish a sovereign wealth fund to ensure long-term prosperity – protecting Greenland from commodity cycles and reinvesting in infrastructure and social programmes.
2. EU hybrid membership (with exemptions): Greenland could be granted Norway-style EU access: full participation in the single market for minerals and trade, but exemptions on fishing rights and other sensitive areas.
3. Infrastructure & financial support: The EU should multiply Denmark’s $500 million annual funding –?both to somewhat outbid US influence and to help Greenland develop the initial infrastructure needed to mine and refine its resources.
4. A new mining standard: Most of Greenland’s deposits lie under untouched Arctic environments. The EU should provide access to next-generation mining technology –?precision drilling, automation, and AI-driven exploration –?to minimise ecological damage and set a new standard of mining.

Final thoughts

Trump’s ongoing argument is that Europe should shoulder more of its own security and economic burdens, so he should in theory support this move (spoiler alert: he won’t).

By developing Greenland’s resources, the EU would reduce its dependence on China, strengthen its autonomy, and bring a new balance to geopolitics in the Arctic.

The lessons are there from the Suez Crises – the EU should make an offer.

In the words of Anthony Eden, the UK’s Prime Minister at the time of the crises, “It cannot be left in the unfettered control of a single power which could exploit it for purely national purposes.”