17 July 2023 - CLG Europe’s Materials & Products Taskforce has released a new report in partnership with the Wuppertal Institute on the urgent need for more circularity in the EU critical raw materials market.
The report, Embracing circularity: A pathway for strengthening the Critical Raw Materials Act, is a direct response to the EU’s proposal for the Critical Raw Materials Act (CRMA) published in March 2023.
Circularity is far more than just recycling - it also involves looking at how to keep the value of materials in the system more effectively and for longer. The report maintains that this aspect of circularity is not sufficiently addressed by the current CRMA proposal.
Centring around three key materials - aluminium (bauxite and magnesium), lithium and rare earth elements (REE), the report builds on evidence-based research. It includes circular case studies from businesses such as Ball and Volvo Cars and provides recommendations to policymakers.
Raw materials play a crucial role in the green transition, in the manufacturing of solar panels, wind turbines and electric cars. As a result, demand in the EU is set to soar over the coming years - lithium demand in particular is expected to be 12 times higher in the EU by 2030 and, globally, 90 times higher by 2050.
But with 24 of the materials listed in the CRMA imported from China, plus the environmental damage and societal impact of more domestic mines in Europe, the importance of the EU’s strategic autonomy has come into sharper focus.
The report suggests a circular economy in the EU would help to increase security of supply for critical raw materials. Circular practices require a more deliberate shift towards a reuse model, which could play a key role in managing supply.
The report showcases the challenges, opportunities and business best practices of embracing more circular practices in CRM use, using case studies from members of the Materials & Products Taskforce and other identified company stakeholders along the value chains of lithium, aluminium and REE.
From materials technology company Umicore who have developed battery recycling technology with capacity for 7,000 tonnes per year, to aluminium packaging giant Ball’s target to achieve 90% recycling and an 85% recycled content target by 2030.
The report’s recommendations to policy-makers include how to:
- Implement a more comprehensive circular approach within the CRMA, rather than focusing only on recycling.
- Set a flexible approach towards circularity within the CRMA that recognises the need for a case-by-case approach.
- Deploy forward-looking infrastructure to enable a systems-wide circular economy.
- Set a clear overall vision on a European Industrial Strategy that combines circularity, carbon neutrality and further sustainability aspects.
- Create more environmentally and socially sustainable supply chains by diversifying supply chains and promoting responsible mining practices.
- Implement financial incentives and support schemes to ensure faster the commercial viability of a shift towards green technologies.
Quotes on the report
Eliot Whittington, Chief Systems Change Officer, CISL said: “Global competition is heating up around key materials and the climate is heating up in response to our carbon emissions, but by adopting a more circular economy Europe can turbocharge its response to both challenges in one go. As the EU negotiates its Critical Raw Materials Act, it should seize the opportunity to scale up circularity. European policymakers should look to learn from how leading businesses across sectors are already implementing a wide range of circular economy solutions in critical raw materials use, and facilitate the finance flows and flexible, targeted policies needed to take these approaches to scale – accelerating the EU’s journey to climate neutrality and strategic autonomy.”
Professor Dr Manfred Fischedick, President and Scientific Managing Director of the Wuppertal Institute said: “Russia’s war on Ukraine and the Covid-19 pandemic have highlighted Europe’s high vulnerability – especially in the supply of raw materials, which today is largely import-based. In principle, the EU has the potential to become more independent. However, this would entail higher raw material prices, and mining activities inevitably encroach on nature and landscapes. Circular economy is the better alternative. It can help provide needed materials efficiently and keep extraction of primary raw materials to a minimum. If policymakers set a clear framework for this, it can be the basis for high security of supply and a greener and socially responsible economy.”
María Mendiluce, CEO, We Mean Business Coalition said: “Shifting to circular economy is vital in achieving a climate neutral and a more competitive EU by 2050. Enhanced circularity should also be applied to the growing usage of critical raw materials, given their essential role in the green and digital transitions. The EU’s Critical Raw Materials Act is a welcome development, but it needs to go beyond the narrow focus on recycling, and it needs to be properly embedded into the broader industrial and sustainability strategy of the EU. Policymakers should aim to enable a systems-wide circular economy that fully harnesses the economic, environmental and social benefits of circularity – and this report provides essential recommendations on this matter.”
Carey Causey, President, Ball Beverage Packaging EMEA, said: “For aluminium cans, the circularity benefits grow exponentially with increased recycling rates and in a closed-loop scenario. This will result in more efficient material use, energy savings and economic benefits. In addition, the circular economy provides more jobs than the linear economy. Circular economy practices in critical raw materials use can help decouple environmental and social benefits, supporting an inclusive and green transformation towards climate neutrality.”
Helge Haakon Refsum, Director Business Development, Hydro said: “We’re at a global crossroad, where we must enable industrial development in accordance with the limits for climate and nature. It is key to enable sustainable growth. We must explore industrial synergies – as already done today in the production of synthetic graphite. In addition, by recycling and reusing critical raw materials, we’ll strengthen security of supply, but also limit the need for greenfield mining projects.
To succeed, we need not only to come together on how to manage end-of-life products and how to reuse these precious minerals, but we also need a coherent public policy supporting the entire value chain.”
Harry Verhaar, CLG Europe Chair and Head of Global Public & Government Affairs and a Vice President at Signify said: “Incorporating better circular economy practices into how we use critical raw materials brings numerous benefits. It can pave the way for new and more circular business models and solutions. This is parallel to increasing energy and resource efficiency. With the Critical Raw Materials Act, the EU has the opportunity to enhance the pivotal role circularity can play. This will provide businesses with the certainty needed to scale up their action.”
Wouter Ghyoot, Vice President Government Affairs, Umicore, said: “To secure access to critical raw materials, diversified access to primary raw materials, expansion of refining capacity and closing the loop by recycling will contribute. Speed, scale and efficiency are essential for Europe's green and digital transition to succeed.”
Linnea Petersson, Manager Sustainable Materials Strategy, Volvo Cars said: “This is a comprehensive report on critical raw materials covering a multitude of vital aspects such as geopolitics, policies and business case studies. The message is clear: The European economy needs increased focus on all circular economy aspects to produce and use critical raw materials more sustainably.”