Have you ever wondered what we actually mean when we talk about raw materials?

According to Degryse (2005:140), raw materials can be defined as substances in unprocessed or minimally processed states, as well as any matter coming from agriculture, forestry, fishing or mineral in its natural form or which has undergone the transformation required to prepare it for the international market in substantial volumes. Just to give you an example, The metal used to manufacture canned consumer goods would be a raw material for a packaging manufacturer. In short, raw materials are commodities that are bought and sold on commodity exchanges worldwide. Traders buy and sell raw materials in the factor market since these are factors of production, as also are labor and capital.

We can divide the term into two categories: 

The term is subcategorized in a dichotomous framework. Primary Raw Materials (PRMs), are naturally occurring substances that have not been subjected to manufacturing transformation or chemical changes after being recovered. Natural gas and crude oils are a clear example of basic raw materials for the manufacture of petrochemicals (Hatch, 2001). Secondary Raw Materials (SRMs) have no clear legal definition in the European Union: they can be identified as materials that can be recycled and then brought back into the economy as new raw materials (COM, 2015:614). SRMs are regularly extracted either from production waste or from end-of-life products, and then sent to the recycling plants. In a circular economy view, SRMs can be exchanged and transported instead of primary raw materials from conventional extractive resources, reducing the exctraction cost and expanding the security of supply.

Raw materials form the basis of Europe’s economy and they are essential for maintaining and improving our quality of life. These are linked to all industries across all supply chain stages. They are also essential to foster change and innovation through digital technologies and sustainable mobility, in which they are currently irreplaceable. Because of this, some of these raw materials are of more importance than others in terms of a safe and sustainable supply. Thus the list of critical raw materials (CRMs) for the EU is a key instrument in the context of the European raw materials political strategy and in a Circular Economy agenda. CRMs are of high economic importance for the EU and have a high risk of supply disruption. Examples of CRMs include lithium, magnesium, or titanium (Mathieux et al, 2017).

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What can a circular economy approach do for the realm of critical raw materials? 

SRMs confront a variety of obstacles in competing with PMRs, not only in terms of safety, but also in terms of performance, supply, and affordability. Circular economy could increase the efficiency of PRMs consumption across Europe and the whole world. 

How? By keeping materials embodied in high-value products, or returning waste to the economy as high-quality SRMs, a circular approach would reduce the demand for PRMs. As a result, Europe’s reliance on imports would be reduced, thus alleviating pressure on procurement chains in many industrial sectors caused by price volatility on international commodity markets and supply uncertainty related to shortage and geopolitical issues.

When considering CRMs, although some of them have a high recycling potential, and despite the encouragement from the European member-states to move towards a circular economy, the end-of-life recycling input rate of CRMs – which  measures how much of the total material input into the production system comes from recycling of scrap products –  is generally low (Blengini et al., 2017). This can be explained by several variables: 

  • Sorting and recycling technologies for many CRMs are not yet competitively priced; 
  • It is hard to recover materials that have been dissipated during use; 
  • Many CRMs are now locked up in long-life assets, meaning delays between manufacture and scrapping and therefore directly impacting the recycling input rate;
  • Many CRMs are in high demand in a variety of industries, yet recycling contributions are typically insufficient to fulfill the demand (Matthieux et al., 2017).

The increasing demand causes price and market instability, besides risking supply rupture. Therefore, the EU is making a shift on this development pathway by implementing several strategies concerning raw materials such as the European Innovation Partnership on Raw Materials (EIT) and, as one of the main building blocks of the European Green Deal, the new Circular Economy Action Plan (CEAP) – adopted in the first quarter of 2020. The latter notably introduces requirements for recycled content in products, which will contribute to preventing a mismatch between supply and demand of SRMs and ensure the smooth expansion of the recycling sector in the EU.

Despite this, the use of raw materials in the EU economy is somewhat far from being fully circular and there are several improvement opportunities. Many more steps must be taken to ameliorate the situation. Policy initiatives, for example, should strengthen the legislative framework governing processes that promote the extraction of CRMs from input flows. Preventive policy initiatives concerning products to be put on the market should also be developed further. It is also critical to promote public awareness, to emphasize the importance of raw materials in modern lifestyles, and to encourage the collecting of numerous end-of-life products and materials. (Mattieux et al., 2017).

Such policies have the capacity to contribute to a paradigm of regenerative growth that gives back to the planet more than it takes, keeping its resource consumption within the planetary systems boundaries and therefore countering the destructive effects of climate change.

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References:

Mathieux, F., Ardente, F., Bobba, S., Nuss, P., Blengini, G., Alves Dias, P., Blagoeva, D., Torres De Matos, C., Wittmer, D., Pavel, C., Hamor, T., Saveyn, H., Gawlik, B., Orveillon, G., Huygens, D., Garbarino, E., Tzimas, E., Bouraoui, F. & Solar, S. (2017) Critical Raw Materials and the Circular Economy. Background report, EUR 28832 EN, Publications Office of the European Union, Luxembourg. Available at: https://publications.jrc.ec.europa.eu/repository/handle/JRC108710

Blengini, G. A., Blagoeva, D., Dewulf, J., Torres de Matos, C., Nita, V., Vidal-Legaz, B., Latunussa, C. E. L., Kayam, Y., Talens Peirò, L., Baranzelli, C., Manfredi, S., Mancini, L., Nuss, P., Marmier, A., Alves-Dias, P., Pavel, C., Tzimas, E., Mathieux, F. & Ciupagea, C. (2017), Assessment of the Methodology for Establishing the EU List of Critical Raw Materials. Publications Office of the European Union, Luxembourg. Available at: https://publications.jrc.ec.europa.eu/repository/handle/JRC107008

European Comission (2018). A new European Circular Economy Action Plan: For a cleaner and more competitive Europe, Brussels. Available at: https://eur-lex.europa.eu/resource.html?uri=cellar:9903b325-6388-11ea-b735-01aa75ed71a1.0017.02/DOC_1&format=PDF

Hatch, L. F. (2001). Chemistry of Petrochemical Processes, 2nd Edition. Global Spec. Available at: https://www.globalspec.com/reference/22880/203279/chapter-one-primary-raw-materials-for-petrochemicals

Degryse, C. (2005). L’économie en 100 et quelques mots d’actualité. De Boeck, p. 140.

European Comission (2015). Closing the loop – An EU action plan for the Circular Economy. Brussels. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52015DC0614

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