A new report proposes the EU to harness circularity and sustainable resource management to safeguard the clean energy transition

The demand for critical raw materials is increasing significantly as countries globally seek to ensure the supply of raw materials to meet the needs of the clean energy transition, defense and space, and the data economy.

The EU is specifically dependent on imported raw materials, especially imported critical raw materials. In 2023, the EU introduced the European Critical Raw Materials Act (ECRMA) to secure its raw material supply through various means. The circular economy was included in the act, but mainly through recycling.

The synthesis report by the Institute for European Environmental Policy examines the European Critical Raw Materials Act and other EU measures from the perspective of the circular economy, for example, in relation to recycling minerals in Member States, but also in terms of safeguarding mineral supply through diversified EU trade and cooperation agreements. The second briefing of the project focused on the EU’s existing trade frameworks and international cooperation, and how these can help achieve the European Critical Raw Materials Act’s objective of diversifying and securing the EU’s external supply of CRMs: Sourcing critical raw materials through trade and cooperation frameworks – IEEP AISBL.

Circular business models have significant potential to reduce the use of natural resources, such as critical raw materials, for example, through extending the lifecycles of products and devices, recovery and reuse of raw materials, and especially by helping to optimize the use of raw materials, for instance by increasing the utilization rates of products, devices, and the built environment.

Here are the four key highlights from the report:

1. The circular economy helps the EU to concentrate on decarbonisation and lowering its material footprint, through various measures.
2. Policy coherence is needed to address circularity gaps. In practice, this would mean circular economy targets and more coherence between the EU’s product policy, waste policy, and natural resources related policies, such as the European Critical Raw Materials Act (ECRMA).
3. It’s important to enhance circular economy globally and safeguard a sustainable mineral supply by building bridges through multilateral cooperation, including through financing, by supporting technological developments, by generating value addition and by supporting capacity building through strategic projects and partners in third countries.
4. The EU needs to assess the overall material footprint and the advantages of a long-term strategy for sustainable resource management as a solution to the triple planetary crises of climate change, biodiversity loss, and pollution.

The project “Review and assessment of EU policies for the use of Critical Raw Materials” has been implemented with the financial support of the Finnish Innovation Fund Sitra.

READ THE IEEP’S REPORT