When absence becomes strategy: Europe’s strategic blind spot on supply chains

Wars rarely stay confined to the battlefield. As Jamie Shea argued in his recent analysis, the ripple effects of conflict travel far beyond the given theatre. Today, disruptions in the Gulf, particularly around the Strait of Hormuz, are not only driving up oil and gas prices, but are beginning to choke off fertiliser supplies, with potentially devastating consequences for global food production, an often-overlooked dimension.

The numbers are stark. The Gulf region accounts for roughly a third of globally traded fertiliser components such as urea and ammonia. Blockages in maritime routes, rising energy prices and production disruptions are already pushing fertiliser costs sharply upward. For large, subsidised agricultural systems, this is a manageable shock. For hundreds of millions of smallholder farmers across Africa and Asia, it is existential. Lower fertiliser use translates directly into lower yields, higher food prices and ultimately hunger.

Yet if this crisis feels sudden, it is anything but unforeseen. Any credible planning should have anticipated such consequences. They were predictable and, for decision-makers, probably seen as collateral damage. What is worse, no backup options were drawn up to mitigate the consequences of the Strait’s closure or to cushion its worst effects.

More broadly, this points to a structural weakness: Europe does not sufficiently design its critical supply chains to withstand disruption. In a world of recurring shocks, from war to climate stress, it is essential to crisis-proof supply chains: resilience must be built in advance, not improvised in crisis. Yet beyond the immediate crisis lies a more uncomfortable question: why does Europe repeatedly end up exposed to risks it not only foresaw – but chose not to mitigate?

The uncomfortable truth is that Europe has repeatedly had opportunities to reduce precisely these kinds of vulnerabilities – from rare earth to fertiliser inputs – and has chosen not to act. The problem is not simply one of crisis response. It is a deeper, structural failure to think and act strategically about supply chains before they become chokepoints.

A warning from Eritrea

In 2022, as the global food system was already under strain following the launch of Russia’s all-out war against Ukraine, a clear opportunity emerged for Europe and the West more broadly in Eritrea, where I served at the time, to strengthen resilience in fertiliser supply.

In Eritrea’s Danakil depression lies one of the world’s largest and most easily exploitable sulphate of potash (SOP) deposits. Potash is a critical ingredient in fertiliser production, and the deposit – estimated to last for more than two hundred years – offered a rare chance to diversify global supply away from existing concentrations.

Colluli, a joint venture between Danakali, an Australian company, and the Eritrean state, was set up in 2015 to extract and process the country’s extremely rich potash reserve. According to the plan, the operation should have started in 2019, but the project suffered several delays – in part because of Colluli’s failure to raise the final USD 50mn to 100mn in funding. For context: this was a decision measured in tens of millions, in a sector worth hundreds of billions, with implications lasting decades.

The underlying reason behind investors’ reluctance to provide final-stage financing stemmed from long-standing human rights concerns, namely the use of Eritrean workforce, which, as in all state-owned companies in Eritrea, relied heavily on the country’s widely criticised national service. This compulsory service extends to practically the entire society and, primarily because of its indefinite duration, was labelled by several international human rights organisations and UN bodies as a form of enslavement. This, understandably, made investors think twice before engaging in a business that could provoke international condemnation and cause serious reputational risk. Potential investors were further deterred when in 2021 the US imposed unilateral sanctions on Eritrea for its involvement in the Tigray war. None of these concerns were trivial. But neither were they insurmountable.

The much-expected missing strategic investment never came. After potential Western investors withdrew, the Australian company had to sell its share in Colluli. The Eritrean government was not willing to wait any longer either: the Covid pandemic left its deep marks on the Eritrean economy, and the government was eager not to sit any further on a major but unused source of revenue, which Colluli clearly was with its estimated overall income value of USD 150bn over its full 200-year life. The window for action was narrow, measured in weeks rather than years. In the absence of Western resolve to take over the project, the mine, as anticipated, was bought by China for USD 121mn in 2023. Unlike Europe and America, China does not follow a policy of strict conditionality and does not come with strings attached to human rights policies or substantive reforms. At a time when many Africans do not want to be told how to do their business, China’s approach, no doubt, offers a compelling alternative – even if that engagement is not risk-free.

The strategic implications of the acquisition were clear even at the time. China and Russia already controlled a significant share of global fertiliser production (the two combined controlled around one third). Acquiring a major new potash source pushed that dominance further, beyond the 50% mark, consolidating control over a supply chain that underpins global food security.

To compete effectively with China on the global stage and limit its ability to acquire dominance in strategic supplies, the consolidation of our presence and engagement in these countries and sectors is essential. Walking away and thus leaving the field to global competitors, such as China or in some areas Russia, only to later complain about their assertiveness is hardly a strategy but an abdication.

Some strategic thinking and a relatively modest, time-sensitive investment could have prevented this outcome and secured long-term influence.

A familiar pattern

The Eritrea potash case is not an isolated episode. It fits into a broader pattern of European behaviour across strategic sectors. To illustrate, let me cite a few examples: the story of the rare earth elements supply chain is well known. Over several decades, Western countries gradually exited mining and processing activities, driven by environmental concerns and cost considerations. China, by contrast, invested heavily, accepting trade-offs and building a vertically integrated supply chain. Today, it dominates processing capacity, giving it significant leverage over industries ranging from renewable energy to digital technology and defence.

The same pattern is visible in emerging sectors such as the lithium-ion battery supply chain. While Europe kept on debating regulatory frameworks and state aid constraints, China secured upstream assets and built dominant refining capacity. When somewhat belatedly the EU responded with initiatives like the European Battery Alliance to strengthen downstream capabilities, structural dependencies had already been formed.

In energy, despite clear warnings in 2006 and 2009, European reliance on Russia for natural gas has actually deepened over the years, and projects such as Nord Stream 2 went ahead, even after the 2014 annexation of Crimea. Strikingly, even after Russia’s full-scale invasion of Ukraine in 2022, this trend was not reversed and some member states – such as Hungary, Slovakia and Austria – even deepened their dependence on Russian energy. It highlights important deficiencies in strategic foresight and shows how short-term economic (or political) considerations may override quite predictable geopolitical risk.

The collapse of Europe’s solar manufacturing is another powerful case. Despite early European, notably German leadership in photovoltaics, Europe lost its top position in this area. Key reasons include Europe’s failure to coordinate industrial policy (which is quite symptomatic in a number of other areas too), and inconsistently reduced subsidies across Europe. Meanwhile, China scaled massively with state backing. As a result, today Europe imports the vast majority of the panels it needs, despite solar being central also to an earlier flagship, the European Green Deal.

Last, but not least, a few words on China’s Belt and Road Initiative (BRI) and its European response, the EU’s Global Gateway. Here too, China woke up earlier and moved systematically into regions where Europe proved to be overly risk-averse, slow and very strict on conditionality – targeting ports, rail, mining and energy infrastructure across Africa, Central Asia and the Balkans. The more modest interest toward EU’s Global Gateway can be explained by several factors, notably speed, conditionality and logistical connectivity – as well as the lack of a coherent strategy and prioritisation across its many projects. It reinforces the point: greater geopolitical influence (which was a key consideration at its launch) follows infrastructural investments and rapid delivery more than declarations and complex sets of criteria do.

How Europe talks itself out of action

Three mechanisms consistently turn awareness into inaction.

1. Indirect self-deterrence. Regulatory frameworks, accountability, due diligence requirements and sanctions are essential tools of European policy. Yet their indirect effects often extend far beyond their intended targets. In Eritrea, the mining sector was not formally sanctioned, yet Western investors chose nonetheless to stay away. The chilling effect was enough.
2. Risk asymmetry. European companies and institutions operate under strict legal, reputational and political constraints. Competitors often do not – or are willing to manage these risks differently. In fast-moving, high-stakes environments, this asymmetry becomes decisive. If a relationship or specific opportunity carries risks, it is often preferred to disengage out of fear that in the end “the pain may be greater than the gain”. Citing Eritrea’s example again, this contributed to the European Commission scaling back practically all development programmes in the country, ceding its place to strategic competitors, while turning its back on millions of Eritreans in dire need of assistance now.
3. Time mismatch. Strategic opportunities in supply chains are fleeting. Decisions about investments, ownership, and control are often made in compressed timeframes. European decision-making, by contrast, is deliberative, multi-layered, and slow. By the time an agreement is reached, the opportunity has usually passed.

The combination of these factors produces a predictable outcome: Europe hesitates, others act, and structural dependencies deepen.

The paradox of values

None of this suggests that Europe should abandon its commitment to human rights, transparency, sustainability and the rule of law. These are fundamental values, not optional extras, and they are part of Europe’s identity.

But the current approach that requires everybody else to be like us, ideally as of tomorrow, often produces a paradoxical effect.

When strict conditionality leads to disengagement, it does not improve conditions on the ground. It simply transfers influence to actors with fewer constraints. In sectors such as cobalt mining, or in cases like Eritrea, reduced European presence has meant reduced ability to shape labour practices, environmental standards or governance outcomes.

Values without presence do not travel.

From crisis management to strategic positioning

The fertiliser shock is not just a consequence of war – it also is the consequence of accumulated strategic omissions. Recent disruptions in the Gulf demonstrate how quickly supply chain vulnerabilities can translate into global instability. Efforts to reopen shipping routes, stabilise markets and mobilise humanitarian aid are essential and urgent.

But they are also reactive.

If disruptions in a single maritime chokepoint can threaten tens of millions with hunger, the strategic question is unavoidable: why has Europe not done more to diversify and secure alternative sources of supply when the opportunity existed.

Answering this question requires a change in our mindset – from managing crises to shaping the underlying structures that produce them.

What needs to change

The issue is not a lack of tools, but a lack of strategic prioritisation in using them. A more strategic European approach to supply chains would not (and should not) abandon values but would embed them in a more pragmatic framework of engagement.

• First, presence in difficult environments. Strategic sectors require engagement, not withdrawal. This may involve operating in complex political contexts, but absence guarantees loss of influence.
• Second, public de-risking of private investment. Where private actors are deterred by political or reputational risk, public institutions – such as development banks – must step in with guarantees, equity participation or blended finance mechanisms.
• Third, smarter sanctions design. Sanctions should be calibrated to avoid unintended spillover effects that undermine strategic sectors not directly targeted.
• Fourth, faster decision-making. The EU needs mechanisms capable of acting within narrow strategic windows, particularly in sectors where control can shift rapidly.
• Fifth, upstream focus. Security of supply begins with access to resources, processing capacity and logistics infrastructure – not with downstream regulation.

Five strategic lessons Europe must confront

• Absence is a strategic decision – with irreversible consequences. Walking away does not freeze the situation; it reshapes it in favour of others.
• Conditionality without strategy is self-deterrence. If conditions lead to disengagement, they reduce influence rather than extend it.
• Security of supply starts upstream. Without control over key resources and processing, resilience remains an illusion.
• Timing matters more than perfection. Delayed decisions in strategic sectors are often equivalent to no decision at all.
• Values need power to travel. Without economic and industrial presence, European standards cannot shape outcomes.

The disruption of fertiliser flows through the Gulf is a warning. But it is also a reminder of something deeper. Crises do not only expose vulnerabilities. They expose missed opportunities.

The Eritrea potash project was one such opportunity – a relatively small investment with the potential to influence a critical global supply chain for decades. Europe saw it coming. It understood the stakes. And it still chose not to act.

The next time such a moment arises, the cost of hesitation may be even higher.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.