Procurement systems track what a company buys by name. They don't track what's inside it. For most large European manufacturers, the majority of their critical raw material (CRM) exposure arrives embedded in components the company buys ready-made and appears on no purchase order and in no risk register. That structural gap is not a data quality problem. It is a methodology problem, and it means most companies are managing a risk picture that is missing its most exposed layer.

The Trigger That Made It Visible

Between 2023 and 2025, China placed export controls on several critical raw materials in rapid succession: gallium and germanium, then graphite, then antimony, then seven medium and heavy rare earths and the permanent magnets built from them. In May 2025, rare-earth magnet shipments to Europe fell by roughly 75%. Several European carmakers idled production lines for lack of stock.

The underlying dependency was not new. What exposed it was speed: a supply constraint at the material level became a production stoppage at the finished-goods level – with no warning signal in any procurement system along the way.

Two Maps, Both Correct, Missing the Same Thing

There are two ways European companies typically look at critical raw material exposure. The EU's 2023 Critical Raw Materials study maps where each material is first applied: rare earths in magnets, graphite in steelmaking, antimony in flame retardants. Procurement systems map what a company buys by name. Both are accurate within their scope. Neither captures the material inside components bought ready-made.

Consider a European machinery manufacturer building conveyor systems, pumps, or industrial drives. It buys steel, aluminum castings, electric motors, and electronic control systems. The silicon in the alloy, the neodymium and dysprosium in the magnets, the graphite in the steelmaking process, the antimony in cable insulation – none of these appear on a purchase order. The risk register operates on tier-1 inputs, not the raw materials inside them.

The machinery manufacturer doesn't appear in the EU's critical raw materials application maps either. Machinery isn't where most of these materials are first processed. The EU map correctly records where a material performs its function. The procurement map correctly records what the company buys. Neither records the material inside components bought ready-made: one maps where a material is processed and first used, the other maps what the company buys by name. Neither was designed to look through a component to the raw materials inside it.”

The Scale of the Gap

The ctrl+s value-chain model – built on OECD ICIO 2025 and USEEIO v2.5 across 402 sectors within an environmentally extended input-output framework – quantifies this downstream exposure across all 33 materials the EU classifies as critical or strategic.

The pattern is consistent: most of these materials carry more than half their EU-27 supply-chain exposure downstream of the sectors that consume them directly. For gallium, 70.5% of EU exposure is downstream of the first application. For graphite: 58.5%. For rare earths: 53.1%. The same pattern holds across all 33 – the full sector-by-sector breakdown is in the white paper.

The European Central Bank found that more than 80% of large European firms sit no more than three intermediaries away from a Chinese rare-earth producer. That reach extends into automotive, machinery, construction, fabricated metals, and chemicals – industries that don't appear in any critical raw materials policy discussion but carry significant indirect exposure.

China is not the only choke point. DR Congo controls roughly 70% of mined cobalt. Indonesia's ore-export ban has tied nickel refining largely to Chinese capital. Niobium supply is dominated by a single company in Brazil. The same downstream exposure pattern holds across the full set of 33 EU-critical materials – the China-controlled eight are the most visible, but not the only ones that matter.

From Exposure to Managed Risk

The challenge is not gathering new data. It is translating procurement spend into raw-material-level supply-chain exposure – an analytical step most companies have not yet taken.

The input is procurement spend the company already holds. The output is a map of where critical raw material exposure sits in the supply chain: which materials, which spend categories, which tiers carry the risk. Spend data in, exposure map out, roughly four weeks to first findings.

That starting point is enough to direct risk, procurement, and sustainability toward the exposures that matter. The whitepaper sets out what that first map shows – and where the deeper work pays off.

The Regulatory Dimension

From January 2027 onward, this exposure also becomes a disclosure requirement for large EU companies. CSRD's draft revised ESRS published 3rd July 2026 retain a materiality-dependent resource-inflows disclosure under ESRS E5 (E5-4) covering critical and strategic raw materials by weight. CRMA Article 24 requires qualifying large companies to assess supply-chain risk for strategic raw materials at least every three years.

Both obligations rest on the same underlying question: where do the critical and strategic raw materials actually sit in the supply chain? A company that has mapped its indirect exposure for operational or strategic reasons holds, in the same dataset, much of what Article 24 and E5-4 would draw on.