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07/11/2024
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Empowering Europe’s green transition: The crucial role of recycling critical raw materials

As discussions in Brussels increasingly center around critical raw materials, the focus often remains on geopolitics and extraction. These minerals are essential for technologies like wind turbines and electric cars—the backbone of the green transition. The European Union’s reliance on foreign suppliers has turned raw materials into a pressing political issue, especially as global demand is expected to quadruple in light of climate commitments. In the rush to secure new supply chains, however, we are overlooking a powerful solution: recycling.

The stakes are high. The EU is almost entirely dependent on foreign suppliers for 14 out of 27 critical raw materials, and over 90% reliant on imports for an additional three. China’s dominance is particularly concerning; it controls around 60% of global lithium refining while only mining 9% of the supply. These figures reveal a fundamental vulnerability in Europe’s industrial strategy.

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The recently introduced Critical Raw Materials Act aims to mitigate these dependencies by setting ambitious targets, such as limiting reliance on any single country to 65% of annual consumption and achieving 25% of domestic needs through recycling by 2030. However, while manufacturing initiatives receive substantial incentives, the recycling industry remains under-supported. Current regulations treat valuable materials as waste, creating barriers for companies trying to establish robust recycling operations.

Untapped potential in recycling

The recycling sector’s potential remains largely unrealized. Although Europe is home to several innovative recycling companies, most operate on a small scale within a market that could expand significantly. Existing regulations complicate the trade of recycled materials between EU member states, and investment in recycling infrastructure lags behind other green economy sectors.

A comprehensive approach is needed to elevate recycling to its rightful place in the green transition.

  1. Invest in recycling infrastructure: We must fast-track investments in recycling infrastructure through dedicated funding and streamlined permitting processes. Developing new recycling operations typically takes less time than mining projects, providing a quicker route to reducing dependencies.
  2. Establish a single market for secondary materials: As supported by Commission President von der Leyen, we need a true single market for secondary materials. This requires revising waste classifications and creating harmonized definitions for secondary materials, alongside targeted tax incentives to stimulate investment in recycling technologies.
  3. Form strategic international partnerships: Building cross-border recycling networks is essential. This includes developing trade frameworks for secondary materials that navigate existing waste shipping regulations. Initiatives like the Global Gateway can facilitate sustainable recycling partnerships globally, generating value in partner countries while securing sustainable material flows.
  4. Simplify recycling of complex products: Making recycling easier for complex products involves clear labeling and digital product passports to enable effective material tracking. This should be coupled with specific recycling targets and comprehensive guidance on technologies.
  5. Ensure coherence in legislation: Aligning the Critical Raw Materials Act with other EU regulations regarding collection targets, eco-design and waste definitions will promote progress toward resource consumption goals within planetary boundaries.

A competitive edge through recycling

The EU can leverage its strengths—such as a unified market, strong rule of law, high environmental standards, and advanced infrastructure—to create competitive advantages in sustainable material recovery. By promoting global environmental standards while building domestic capacity, Europe can establish a resilient supply chain that reduces dependencies and advances environmental objectives.

While critics argue that recycling alone cannot meet all raw material needs, every percentage of materials recycled means fewer imports from potentially competing partners. A robust recycling industry would provide Europe with a competitive advantage in a sustainability-focused world.

The technology to recycle complex materials exists, and European companies lead in expertise. What’s lacking are the market conditions and regulatory frameworks to scale these operations economically. By prioritizing recycling alongside mining and manufacturing, we can build a more resilient supply chain.

Europe’s industrial future hinges on stable supplies of critical raw materials. The solution isn’t an either/or choice between mining and recycling; both are essential. While much attention has been given to securing new raw material sources, we’ve neglected to establish the regulatory and financial frameworks necessary for a thriving recycling industry. It’s time to rectify this oversight. The technology is ready, the expertise is available, and the market is primed. Now, we need the political will to make it happen.

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