This section describes how circular economy principles are vital for improving resilience in the supply of critical raw materials upon which the economy of most European countries and regions depend.
Why the concern about critical raw materials?
As stated by the European Commission, “raw materials are crucial to Europe’s economy and essential to maintaining and improving our quality of life. Securing reliable and unhindered access to certain raw materials is a growing [economic] concern within the EU and across the globe”11. These ‘critical raw materials’ (CRMs) are chemicals and/or materials that have both a high economic importance and a high risk associated with their supply, either in terms of cost or availability. Examples of CRMs include rare earth elements, cobalt and niobium. Many are used in the electronics industry and some are vital for renewable energy technologies, including batteries for electric motors.
It is generally accepted that physical scarcity in the Earth’s crust is not currently an issue for the majority of the materials considered ‘critical’. In some cases current reserve estimates are small but these recognised “reserves” only represent material resources that are currently economic and legal to extract; this does not mean that materials will actually run out. However, new mineral exploration and mining operations can take 10-20 years to develop, hence there can be a supply risk until these new sources are developed.
There is also the significant environmental impact of the mining and refining of CRMs to consider. In many cases very low grade ores are mined, with high amounts of waste and significant emissions associated with the refining. In addition, future extraction may occur from lower-grade and deeper deposits with potentially greater environmental impact.
The European Environment Agency’s 2014 report (EEA, 2014) on materials resources and waste identifies that the EU has the world's highest net imports of resources per person, and its open economy relies heavily on imported raw materials. In 2010 the share of imports in the EU-27’s consumption of metals ranges from 50 % for copper, 65 % for zinc and about 85 % for tin, bauxite and iron ores, to 100 % for a wide range of hi-tech metals. The EU is responsible for only 3% of world production of metallic mineralsand is almost wholly dependent on imports for the 14 materials labelled critical by the EC. The biggest share of reserves, and therefore worldwide production of those 14 materials comes from a limited number of countries of which China, Russia and Brazil are of particular significance.
Increases and large fluctuations in commodity prices are a major challenge for industries in the EU. International competition for access to materials has intensified due to increasing demand and, in some cases, the limited sources of supply of key materials. The 2008 EU Raw Materials Initiative and the 2011 EU Communication on tackling the challenges in commodity markets and on raw materials sought to address these concerns. More recently, these issues were acknowledged in EUROPE 2020, the European strategy for smart, sustainable and inclusive growth, adopted in March 2010.
The UK Department of Environment, Food and Rural Affairs (Defra) 2010 report ‘Review of the Future Resource Risks Faced by Business and an Assessment of Future Viability’ identified that in the medium (5 – 20 years) to long term (20+ years) the overall trend in the UK is one of increasing resource demand. This will be due to population growth, increasing global economic development and the drive towards a low carbon economy. UK businesses were advised to plan for the future, including how to secure supplies, reduce use or reliance on particular resources or look at potential alternatives.
The UK’s EEF (The Manufacturers’ Organisation) has identified in a 2014 report that raw materials represent around 40 percent of manufacturers’ costs in the UK12. They highlighted increasing raw material costs, price instability, and lack of security of supply of key materials as a threat to growth in manufacturing. The economy of a region such as Wales usually relies on inputs of raw materials, either directly in the manufacturing of components and/or final products, or in terms of imported products that are sold by retailers, and which are used in service industries.
A 2013 report13 identified that CRM issues are potentially significant for Wales’ Advanced Materials and Manufacturing Sector, and may also be significant for the Energy and Environment Sector and the Welsh Government’s ambition to create a sustainable low-carbon economy, particularly if price rises occur in imported finished products such as wind turbines, solar PV cells, electric vehicles and energy efficient lighting (i.e. LEDs), due to the use of rare earths in their production.
The potential benefits of adopting the circular economy approach for critical raw materials
Since most CRMs are contained in electrical products, this is the area that needs the most focus in terms of ensuring resilience in how CRMs are used. The traditional ‘linear economy’ of ‘take, make, use and lose’ (to landfill or incineration) results in the loss of CRMs in electrical products from the economic cycle into landfill or incineration. Even a partial circular approach where end of life equipment waste is exported for recycling in a different part of the world is a concern given it results effectively in the loss of valuable CRMs, especially those contained in cars and electric and electronic appliances.
The EU’s Raw Materials Initiative suggested reducing the EU's consumption of primary raw materials by increasing resource efficiency, improving eco-efficiency, the wider use of recycled materials, the prevention of leakage of valuable resources through exports of end-of-life products and increased use of renewable materials – all of which form part of a circular economy approach. Increasing product longevity, durability, ease of repair, remanufacture and disassembly and increasing reuse are also key options under a circular economy approach that will result in greater resilience in the use of CRMs.
The eco-design of electrical products in terms of materials efficiency is not as progressed as eco-design in respect of energy efficiency. Using as little CRM as possible in products and designing products so that CRMs are in active ‘live’ use for as long as possible in a given product are part of the challenge that needs to be addressed. High demand for many CRMs is maintained because there are few or no substitutes currently available that will offer the same level of performance in a product for the same price. This is particularly true for rare earths such as neodymium used to make high power magnets for use in electric cars and wind turbines.
For many CRMs and the products that contain them, reuse and recycling operations are poorly established in EU member states and regions, despite the best endeavours under the WEEE Directive. The recycling rate of rare earths in Europe for example is less than 1%14. The main barriers to recycling come from the dispersal of the materials, where very small quantities exist in large numbers of products, making concentration low and separation of the materials expensive. This is particularly the case for small electrical devices used by the general public that are discarded in the household waste stream. WRAP research has shown that nearly 40% of electrical products in the UK go to landfill when they are disposed of.
Every year in Europe, around 9 million tonnes of WEEE and 7-8M tonnes of ELVs are generated, and over 1 million tonnes batteries are sold. These products are a rich source of secondary critical raw materials (CRMs) in the urban mine. For example, 99% of world Gallium consumption is in integrated circuits and optoelectronic devices, 74% of Indium in flat panel displays and 27% of cobalt in rechargeable batteries.
Currently, CRM ‘rich’ waste streams are insufficient partly due to the fact that many products that use critical materials are relatively new and still in use. There is also a lack of information on the amounts of CRMs present in components and products produced in or entering the UK and Wales. Until now, the data on CRMs has been produced by a variety of institutions including government agencies, universities, NGOs and industry and lies scattered in different databases, formats and reports which is difficult to compare or aggregate.
The current approaches to extracting CRMs from WEEE need to be improved. There is too much reliance on a mixed WEEE shredding approach, often carried out outside of the EU, with potential environmental harm. It also involves the economic loss of the CRMs from the EU. New approaches are needed to extract the CRMs within the EU.
For countries and nations/regions such as the UK and Wales that have very little mining or refining capabilities for CRMs, policies aimed at improving resource efficiency of, improving recovery rates of and the development of substitutes for CRMs are important. Resource efficiency measures such as reducing usage of materials are commonly cited by studies as an opportunity for businesses to reduce costs and environmental impacts.
By reducing material usage through eco-design, eco-innovation or similar actions, businesses can also reduce their exposure to material risk, potentially leading to unrealised financial and environmental benefits. Opportunities may also exist for collaboration between industry and academia in the development of new or improved recycling and recovery processes with the aim of extracting critical materials from waste, as well as initiatives aimed at the development of direct substitutes for critical materials, or the eco-design of new products that are less reliant on critical materials.
In the long term, the most effective strategies to deal with uncertain supply from key primary supply countries are to look for alternative supply chains and to reduce the need for critical materials in renewable technologies15. The EU is promoting research (e.g. Replacement and Original Magnet Engineering Options (ROMEO), Suprapower project, INNWIND.EU and EcoSwing to develop renewable-energy technologies that do not depend on critical raw materials.
Recycling of waste products containing CRMs is one way to mitigate against supply risks for these materials. Recycling is currently more promising for indium and gallium than for tellurium and is currently not feasible for neodymium and dysprosium. There is already some good practice guidance available, for example the 2014 WRAP report - ‘Techniques for Recovering Printed Circuit Boards (PCBs)’16. WRAP has also published the results of five case studies of waste electrical and electronic equipment (WEEE) collection trials17. These tested options to increase the collection of WEEE for re-use and gain maximum value from it.
Some examples of work currently underway
Critical Raw Material Closed Loop Recovery
There is a €2.1 million EU LIFE funded Critical Raw Material Closed Loop Recovery (‘CRM Recovery’) project to map out effective recovery of raw materials from electrical products involving a partnership of WRAP, the UK Knowledge Transfer Network (KTN), Wuppertal Institute, ERP UK Ltd, and EARN18. The project is exploring new and commercial opportunities for harvesting critical raw materials and precious metals including gold, silver and platinum group metals, from everyday unwanted electronic products and is believed to be the first-of-its-kind to link collection methods with recovery success. (See www.criticalrawmaterialrecovery.eu)
Over the course of the three and a half year project, the CRM Recovery project aims to increase the recovery of a range of CRMs by 5% from products such as consumer electronics, ICT equipment and small household appliances. The project will link collection methods, such as kerbside collections, retailer take-back schemes or postal returns, to how the material components of these products can be efficiently dismantled, recovered and returned to the market. This will present environmental benefits by keeping materials in the loop for longer, and by demonstrating the potential to economically recover these materials from Waste Electrical and Electronic Equipment (WEEE). Findings will be fed back to the European Commission in the form of policy recommendations and proposals for infrastructure development for the cost effective recovery of these precious and critical raw materials. Four countries are participating – UK, Germany, Italy and Czech Republic, with each country representing varying maturity stages of recovery development, allowing cross-comparison so that a European-wide framework can be developed.
Wales based electronics recycler E3 Recycling is a partner in one of the UK trials in the CRM Recovery project. Non-reusable electrical items collected from in-store collection trials in British Heart Foundation and Dixons stores across Greater Manchester are sent to E3 Recycling for dismantling. Data has been collected from this activity that will feed into the evaluation of the trials and this evidence will allow a greater understanding of the considerations required for dismantling as part of any CRM recovery solution.
The ProSUM project19, funded by the European Union (€3.051m) and the Swiss Government (€0.63m), will deliver the First Urban Mine Knowledge Data Platform, a centralised database of all available data and information on arisings, stocks, flows and treatment of WEEE, ELVs, batteries and mining wastes. The availability of primary and secondary raw materials data, easily accessible in one platform, will provide the foundation for improving Europe’s position on raw material supply, with the ability to accommodate more wastes and resources in future. ProSUM will provide data for improving the management of these wastes and enhancing the resource efficiency of collection, treatment and recycling. The project includes the development of a centralised database of all available data and information on arisings, stocks, flows and treatment of waste electrical and electronic equipment (WEEE), end-of-life vehicles (ELVs), batteries and mining wastes.
It is important to regularly review the ‘criticality’ of the CRMs. Many materials now considered critical may be in relatively plentiful supply in the near future due to the discovery of new reserves or the development of substitutes. A course of action needs to be carefully planned and implemented that is appropriate for each country and region. The Commission is committed to updating the CRM list every 3 years. So far this has been 2011 (14 CRMs) and 2014 (20 CRMs).
More work is needed to reduce the use of CRMs in products, and ensure greater durability/longevity of products containing CRMs. New business models need developing to move towards servitisation whereby more products contained CRMs are leased rather than sold/bought, enabling the manufacturer/retailer to retain ownership of the CRMs.
A better understanding is needed of products rich in CRMs and how these can be accessed at end of life – hopefully utilising the results of the ProSUM project identified above. The ability to disassemble WEEE to extract CRM rich components may require the production of disassembly manuals – potentially increasing opportunities for robotics to play a part in extracting CRM components, eg. from circuit boards. Designing cost effective systems for CRM rich waste products (especially small WEEE) that make it economically viable to collect, extract, refine and reuse the CRMs within EU members states needs addressing.
Potential policy options for members states/regions to ensure greater resilience in CRMs include:
The challenge of CRMs can be addressed through applying circular economy principles ensuring a strong focus on reducing the use of CRMs, and then focussing first on the ‘inner’ circles of the circular economy such as increasing longevity, reuse and remanufacture. The ‘outer’ recycling circle is important, but remains a significant challenge that needs addressing.