EU critical raw material recycling well below levels needed to reach supply security targets – auditors

The recycling of critical raw materials (CRM) needed for renewable energy technologies in the EU fails to exploit its potential for ensuring greater supply security, the European Court of Auditors (ECA) has said in a new report. From the 26 raw materials the EU defined as critical for the energy transition, seven were found to have recycling rates between 1 and 5 percent, and ten materials are not recycled at all. The EU’s Critical Raw Materials Act from 2024 includes a non-binding commitment to obtain 25 percent of all CRMs needed for the energy transition through recycling.

CRMs are resources considered essential for building a wide range of technical products, including many energy transition technologies, such as batteries, wind turbines, or solar panels. Materials that the EU has defined as critical to its push for a climate neutral economy include minerals such as lithium, cobalt, or nickel.

In light of the EU’s goals of having 42.5 percent of its energy supply coming from renewable sources by 2030, and reaching net-zero emissions by 2050, quickly improving the secure and reliable supply of CRMs is essential, the auditors say. However, these often come from a small group of countries outside the EU, which creates a challenge to the union’s strategic autonomy ambitions. The recycling of CRMs already available in products circulating within the EU therefore constitutes a promising way to reduce dependency on imports, the ECA said.

The current low recycling rates show that the target of sourcing one quarter of CRMs for Europe’s energy transition by the end of the decade is still far away, the ECA report found. Additionally, EU targets for CRMs do not define quotas for individual materials. They therefore do not incentivise targeted recycling and in particular not of minerals that are more difficult to extract from electric waste products, such as rare earth minerals, the auditors said.

They added that market bottlenecks and regulatory obstacles are also limiting recycling’s contribution to industry competitiveness. “European recyclers suffer from high processing costs, the small quantities available, and technological and regulatory barriers which hinder their competitiveness,” the ECA said. 

In addition to the insufficient recycling capacity of CRMs, the EU is currently failing to diversify its imports, as well as to increase its domestic production, the report found. The ECA stated that this makes it unlikely that the union will ensure a secure supply of CRMs by 2030.