(Credit: Volvo CE)Rare earth minerals may be abundant resources, but the pathways by which they arrive globally are limited. It’s a huge problem now that the desire for electric vehicles, solar panels, and windmills is in high demand — an offshoot of national governments trying to electrify their economies.
Some companies such as Ball Beverage Packaging and Volvo Cars think solutions lie with the circular economy.
Indeed, the European Union wants more and more lithium, estimated to rise by a factor of 12 by 2030. And the demand for it will jump 90 times by 2050; lithium is integral to electric batteries — everything from watches to electric vehicles. China, though, controls the refining and processing of these minerals.
According to the U.S. Department of Commerce, China controls 85% of minerals' processing and 60% of rare earth mining.
“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,” said Eliot Whittington, Chief Systems Change Officer for the Cambridge Institute for Sustainability Leadership.
“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 are already implementing a wide range of circular economy solutions – accelerating the EU’s journey to climate neutrality and strategic autonomy,” he added.
CLG Europe’s Materials and 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.
Authors of the report claim 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 the current raw material act proposal must sufficiently address this circularity aspect.
It includes circular case studies from businesses such as Ball and Volvo Cars. The report suggests a circular economy in the EU would help increase supply security for critical raw materials. Circular practices require a more deliberate shift towards a reuse model, which could play a key role in managing supply.
“For aluminum cans, the circularity benefits grow exponentially with increased recycling rates and in a closed-loop scenario,” said Carey Causey, President, Ball Beverage Packaging EMEA.
“This will result in more efficient material use, energy savings, and economic benefits,” he added. “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.”
Linnea Petersson, manager of sustainable materials strategy, at Volvo Cars also 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.”
Just as compelling, the host nation digging for rare earths ends up with scarred land while the more affluent countries develop the end products.
The International Renewable Energy Agency (IRENA), which just released the “Geopolitics of the Energy Transition, concludes that the supply of rare earths and minerals is not an obstacle to achieving net zero. However, the mining techniques must use the best practices while the host countries should grow economically and create value at home.
The rare minerals are concentrated in a few countries, putting the rest of the world at risk, from political unrest to export restrictions to market manipulation. For example, Australia supplies lithium, China has graphite, Chile possesses copper, and the Democratic Republic of the Congo has cobalt. Indonesia is rich in nickel, while South Africa sits atop platinum and iridium. If those countries can succeed at building value, they can train more qualified workers and create more jobs.
IRENA’s premise is that a well-planned energy transition can rehabilitate the extractive industry – activities that carry risks for local communities, such as labor and human rights abuses, land degradation, water resource depletion and contamination, and air pollution. Indeed, stronger international cooperation is necessary to enforce higher corporate standards – something that gives foreign investors a broader social license.
But for some in Europe, enhancing aspects of the circular economy is a more immediate answer.
“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,” said Professor Dr. Manfred Fischedick, President and Scientific Managing Director of the Wuppertal Institute.
“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,” he continued. “A circular economy is the better alternative. 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.”
