CRITICAL RAW MATERIALS: THE KEY CHALLENGE OF THE CIRCULAR ECONOMY

Green and digital make Europe a continent in double transition. Thanks to the Green Deal – the package of measures sought in 2020 by the EU Commission for post-pandemic recovery – these two pillars carry the weight of a clear goal that can no longer be postponed: to drive the Union's sustainable development and have member states achieve carbon neutrality by 2050. A transformation that, in the short term, will not however allow Brussels to decouple economic growth from the use of some of the scarcest and most globally disputed materials. The very lifeblood of the now-initiated decarbonisation process, lithium, copper, cobalt and rare earths are in fact irreplaceable in the production of solar panels, wind turbines, electric vehicles and digital technologies that Europe will not be able to live without. That is why the European Union has launched a circular action plan that aims to diversify supplies by recovering critical raw materials already present in WEEE, waste from electrical and electronic equipment.

The global scenario and the EU Commission's list

Critical Raw Materials (CRMs) play a pivotal role in laying the foundations for a competitive circular economy. This is known by the EU Commission, which has been updating the list of raw materials considered critical on a European level every three years since 2011. "The criteria that are used to make this list are mainly twofold: the economic importance of these materials is assessed – and the first cause now is the energy transition – and the security of supply, which in the global context is threatened", as Sarah Gordon, CEO and co-founder of Satarla, a mining industry consulting firm that has been working on ESG parameters and risk management for years, explains to the authors. "This happens because most materials come from one country, because demand is very high or because they are simply rare".

Even the most common metals could be considered critical from now on. In July 2022, S&P and IHS Markit released a report on the future importance of copper, a resource that typically does not appear on these lists. The analysis makes it very clear that we need to at least double our copper production between now and 2050 if we are to even begin to have a chance of meeting emission reduction targets. And indeed, the European list of Critical Raw Materials has over the years been getting longer and longer. The 30 special materials identified in 2020 by the EU Commission also include lithium, natural graphite and cobalt. Crucial to the production of storage systems, the International Energy Agency estimates that global demand for these "energy materials" will increase by 42, 25 and 21 times respectively over the next two decades. Quo vadis, Europe?

The European Action Plan for Critical Raw Materials: not just new mining

Certainly, the EU Commission's list serves to stimulate research and innovation, but more importantly, it allows them to tie availability to their own needs so as to conduct better trade negotiations with international partners, especially those where the largest supplies are concentrated. Europe imports 98% of rare earth elements from China, 98% of borate from Turkey and more than 71% of metals such as platinum, iridium and rhodium from South Africa. Reducing dependence on third countries is therefore a matter of strategic security. In 2020, Europe therefore launched the Action Plan on Critical Raw Materials. The plan included the establishment of ERMA – the European Raw Materials Alliance, of which Italy’s Ministry of Ecological Transition and Ministry of Economic Development have been part since early 2022. It was also decided to invest in flow monitoring and new technologies. To diversify supplies, Brussels has instead started AfricaMaVal, a Europe-Africa cooperation project – already launched in Namibia – which aims to invest in infrastructure for extraction, processing and transport. Destination? Straight to Europe, an economy that wants to build new resilience through reliable and preferably less value chain concept partners. "We prefer to source from third countries and turn a blind eye to the environmental and social impact, not to mention the carbon footprint of imports. But mining in Europe should not be a dirty business", EU Internal Market Commissioner Thierry Breton said recently.

It's difficult to debate new extractions here in the increasingly protected EU territory. Complementary measures are needed. Thus, Europe has chosen the path of introspection: to bring the trade scale back into balance, the European Action Plan focuses primarily on the recovery of critical raw materials already contained in WEEE, the electrical and electronic waste produced by the 27 member states.

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WEEE, urban mines

"While it cannot totally replace the global supply chain as of today, the recovery of critical raw materials – especially some of them – is crucial," Valeria Frittelloni, Manager of the National Centre for Waste and the Circular Economy at Ispra, explains to the authors. "This makes it possible to mitigate speculative pressures in the markets and pave the way for parallel supplies that can serve at least temporarily as an alternative, a sort of lung of expansion to offset the reductions and bottlenecks that are created in the global supply chain".

Worldwide, the amount of WEEE is increasing at a very rapid rate. Otherwise destined for landfill, these types of waste are accessible and available: veritable open portal mines that Brussels does well to look out for. "According to a recent study carried out by the European House Ambrosetti, WEEE production will reach almost 75 million tons in 2030, and, in this context, Europe is the continent that generates the largest amount of WEEE per capita, with 16.2 kg. Already these numbers provide insight into the potential offered by the proper recycling of end-of-life technology products", Fritelloni concludes.

The Italian case

The latest official data reported to Eurostat and the European Commission for the year 2019 show that Italy collected a total of 461,969 tons of WEEE, representing 39.35% of the average amount of equipment put on the market in the previous three years. The collection target set by European and national regulations would have been 85%¹. This figure is fortunately counterbalanced by data on the share of WEEE that once collected, is properly recovered. In 2019, of the 461,969 tons collected, 394,158 were recycled.

If this is happening, it is mainly thanks to circular economy platforms. "What is coming from WEEE is a necessary supply for our country. And, above all, we believe a lot in the recovery of those raw materials that have uses in a market contiguous to the waste market", explains Michele Priori, head of compliance at Cobat, the largest consortium for the circular economy in Italy. "In Abruzzo, in the new Cobat Ecofactory plant that will become operational over the next year, through an innovative treatment process, we will recover all the raw materials in lithium batteries, including the lithium itself. This example of a proximate supply chain, perhaps, could be extended to rare earths in the future. At country level, their reuse is still experimental, but we could invest in this branch to create an Italian market of power board manufacturers. In this way, we could make ourselves independent from eastern supplies".

So global supply chains will no longer and not only be based on long distances. But a parallel, internal channel, a closed circuit that will also need new alliances and new paradigms to function. "We have recently formed UNIRAEE, an association that aims to be truly representative of the sector," says Giuseppe Ziliani, administrator of SEA SpA. "There will be treatment plants, collection operators and haulers. Ours will be an association with a strong technical focus. All comments made by individual members will be shared internally, so that everyone can voice their opinion and can actually participate in the operational movement of the new steering committee. That is the complete opposite of what is happening now in Italy".