The Nordic Potential for Critical Raw Material Recycling: Implications for the Environment and Strategic Autonomy
The recent publication of the report "Recycling of Critical Raw Materials in the Nordics" has shed light on the potential for the Nordic countries to become frontrunners in developing a resilient and sustainable supply of these strategic resources. The report, commissioned by the Nordic Council of Ministers’ Working Group for Circular Economy together with Nordic Innovation, and authored by Bergfald Miljørådgivare, provides a comprehensive assessment of the current state, challenges, and opportunities for critical raw material (CRM) recycling in the region.
Discussions around the report launch have underscored the urgency of addressing the vulnerabilities in CRM supply chains, as these materials are essential for the green transition and digital technologies that underpin our future economy and society. It is a well-known fact that CRM production is not evenly distributed over the world. The global production of individual CRMs is often dominated by one or a few nations and is characterised by China's dominant position as a supplier and the corresponding low degree of self-sufficiency of Europe.
On the 18th of March, the European Council gave its final approval on the Critical Raw Materials Act (CRMA), designed to address these concerns. Peter Handley from the European Commission, who has been working behind the new act elaborates on the motivations by stating that the CRMA “is very much driven by Europe realizing that its strategic dependencies are dangerously overexposed and overconcentrated. So the solution to that is diversification. Diversification takes many forms. One is to reduce your import exposure by doing as much as you can yourself and the second is spreading your imports rather than overconcentrating them on a single source of supply.”
The final text of the Act adopted identifies two lists of materials (34 critical and 17 strategic) that are crucial for the green and digital transitions, as well as for the defence and space industries. The CRMA establishes three benchmarks for the EU’s annual consumption of raw materials: 10% from local extraction; 40% to be processed in the EU and 25% to come from recycled materials. The CRMA, together with the Net Zero Industry Act and the Reform of the electricity market design, is one of the flagship legislative initiatives under the Green Deal Industrial Plan.
Reaching the mandated CRM-specific recycling capacity of 25% is a demanding task, and its successful implementation will require a good understanding of existing opportunities and barriers. The "Recycling of Critical Raw Materials in the Nordics" report sets out to provide a broad overview of this in the Nordic context and to describe advantages specific to the Nordic countries when it comes to recycling of CRMs based on available waste streams, industry and technology, together with skills and competence in the Nordic workforce that may result in projects that can help the Nordic region lead the way when it comes to increased CRM recycling. The report’s commissioners are also promising two further more detailed reports by the end of the year, providing an important knowledge base as the region sets out to achieve the EU targets.
Value chains for primary CRMs are facing major challenges
In addition to the geopolitical challenges of securing a supply of critical raw materials, the sector is wrestling with growing levels of consumption and changing social opinions towards extractive industries. Growing populations and economies increase the pressure on remaining geological reserves of elements with already limited availability. The levels of CRMs required are expected to rise 10-100 times in the coming years compared to global consumption today, making this a systematic problem.
Because primary CRM value chains are based on virgin mineral ores, a national strategy to strengthen these value chains often includes measures that aim at ensuring necessary access to central mineral deposits and industrial capacity that can process the ore resources into refined end-user quality raw material products.
A challenge associated with the primary production of some CRMs is also that they are only produced as by-products in the production process of something else. This results in increased supply risk since reduced production of the main product will also result in a proportional reduction in production of the by-products. For the same reason, it is also difficult to increase the extraction of the by-products if demand increases more for these than for the main product. Examples of critical elements and raw materials that are only produced as by-products include helium, indium, gallium, germanium, rhenium, selenium and tellurium.
Another challenge to the primary production of CRMs is a declining societal acceptance of mineral extraction in the local communities surrounding the area where minerals are available, which makes it increasingly difficult to expand the primary production of many critical raw materials. Extraction of CRM minerals is often associated with pollution, noise and dust dispersion, and the mining operation may seize areas and water resources that create conflicts with other interests.
Recycling provides underappreciated opportunities for innovation
One of the key revelations from the report is the staggering amount of CRMs lost annually in Nordic waste streams. Bård Bergfald, one of the report's authors, estimated that nearly 1 million tons of CRMs end up in Nordic waste streams every year, including mining tailings, industrial slag and sludge, electronic waste, batteries, and more. This eye-opening figure highlights the untapped potential for the Nordic countries to develop a robust secondary raw material supply by improving the collection, sorting, and recycling of these waste streams.
Currently, the recycling degree for certain materials, such as gallium, is alarmingly at zero. Considering gallium's essential role in modern technologies, such as LEDs, and its sourcing challenges, this gap in recycling efforts is an eye-opening call to action. It illustrates the urgent need for technological innovations and improved collection systems to bridge this gap, reinforcing the message of seizing untapped opportunities for sustainability. The Nordic region's strengths in mining, metallurgy, and waste management, coupled with its commitment to sustainability and innovation, position it well to become a leader in this field.
However, a lot of aspects are currently missing from us being able to achieve effective CRM recycling. These include insufficient knowledge of CRM content in waste, lack of separate collection systems, technological limitations in sorting and recycling processes, and unfavourable economics due to small volumes and volatile prices. Overcoming these challenges will require concerted efforts from all stakeholders, including targeted R&D programs, technology development, standards and regulations, economic incentives, and collaborative partnerships across value chains. And yet, this is something that has to be addressed fast to meet the new EU targets.
What does the industry say about the new requirements?
It is not only nations who need to react to meet the upcoming targets. Various industries will also need to be acting fast to adapt their production chains to meet the new market conditions. The Nordic region has a long history with the automotive industry. Owain Griffiths, the Head of Circular Economy and Biodiversity at Volvo Cars is supportive of the additional pressure that the recent developments put on the industry to increase recycled content in products and the increased scrutiny on circularity. He points out that Volvo has set a target of 30% recycled content across its fleet by 2030 with a view of increasing this to 35% recycled content beyond that.
When it comes to how the industry will react, we can see crucial roles of eco-design directives, new business models, and strategic partnerships in closing material loops. By designing products with recyclability in mind, exploring service-based models that encourage product return, and fostering close collaboration between manufacturers and recyclers, Nordic companies can pave the way for more efficient and effective CRM recycling. Nordic cooperation can have a key role in tackling these challenges. By pooling their expertise, resources, and best practices, the Nordic countries can develop joint strategies and initiatives to scale up CRM recycling and create a competitive advantage in the global market. This collaboration can span joint R&D projects, technology pilots, standards harmonization, and policy coordination.
In conclusion, the publication of the "Recycling of Critical Raw Materials in the Nordics" report and the ensuing discussions have provided a call for action for governments, industries, and research institutions to join forces and address the outlined challenges. The Nordic countries have a unique opportunity to leverage their strengths and seize the potential of CRM recycling, not only to secure their own raw material supply but also to contribute to Europe's strategic autonomy and sustainable future. By turning this challenge into an opportunity for innovation, collaboration, and leadership, the Nordics can demonstrate to the world that a circular economy for critical raw materials is not only necessary but also achievable.