Germany plans to set up a state fund worth between €500 million and €1 billion ($546 million to $1.1 billion) to support the mining of raw materials critical to accelerate the country’s green transition, Economy Minister Robert Habeck said.

The amount is around half that previously being considered, however, reflecting new spending constraints as the government tries to slash its budget for next year. People familiar with the matter told Bloomberg in April it could total as much as €2 billion.

Europe wants to reduce its dependence on China for key commodities by diversifying supply chains and working more closely with like-minded partners. The European Union expects its green and digital transitions to lead to exponential demand for critical metals and minerals such as those used in photovoltaic cells, wind turbines and electronic equipment.

“We’re discussing the option of using equity capital,” Habeck told a news conference in Berlin following a meeting with French Finance Minister Bruno Le Maire and Italian Industry Minister Adolfo Urso. Germany’s KfW Development Bank could take part in projects or even take stakes, he said.

The Economy Ministry has finalized the concept but not yet reached an agreement with other ministries, he added. Finance Minister Christian Lindner wants to cut the 2024 budget by €20 billion, with reductions in expenditure in all departments except defense.

Habeck said Germany must be able to offer similar financing instruments to those available in France or Italy, warning that “otherwise German companies would be disadvantaged against others.”

In its Critical Raw Materials Act launched in March, the European Commission, the EU’s executive arm, proposed that member states should extract 10% of the critical raw materials the bloc needs domestically by 2030.