Raw Materials in Crisis: Circular Economy as Survival Strategy

Raw Materials in Crisis – Why the Circular Economy Is Becoming a Strategy for Economic

Access to raw materials is becoming the No. 1 risk factor for companies – economically, technologically, and geopolitically. Critical materials such as copper, rare earths, or lithium are not only essential for future technologies – they are also subject to increasing uncertainties: geopolitical tensions, volatile markets, and rising demand are colliding with limited and often highly concentrated production capacities [1].

For companies, this means rising material costs, fragile supply chains, and increasing regulatory pressure. The transformation towards a more resilient, circular economy is therefore not a question of if, but when – and it offers tangible economic benefits.

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Circular Economy as a Strategic Response

The circular economy enables materials to remain in use for longer, reduces the consumption of primary raw materials, and at the same time opens up new areas of innovation and business. It is therefore more than a sustainability issue – it becomes a strategic lever for supply security, cost stability, and long-term competitiveness [2].

A concrete example: Copper is a key material for the energy transition. Europe consumes around 4.4 million tonnes annually [3]. At the same time, huge amounts of copper are already stored in old equipment, infrastructure, and buildings – so-called urban mines. European e-waste alone contains around 780,000 tonnes of copper each year – a theoretical raw material value of over 6 billion US dollars [4].

But only a fraction is actually recovered. Inefficient collection systems, technological losses, and untapped potential mean that only 20–25% of the copper in e-waste is effectively recycled [5]. At the same time, most of the primary supply comes from just three countries: Chile, Peru, and China – together accounting for more than 70% of the market [6]. This concentration brings not only price risks but also strategic dependencies.

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What if Europe strengthened its circular economy?

Two scenarios illustrate the potential:

• Moderate scenario: Recycling rate rises to 50% → additional 440,000 tonnes of copper annually
• Ambitious scenario: Recycling rate rises to 70% → additional 1.32 million tonnes – nearly a third of current demand [7]

The economic effect is significant:

With conservatively estimated savings of 800 USD per recycled tonne, the annual saving potential is up to 1 billion USD – and up to 3.76 billion USD with rising copper prices [8].

At the same time, the ambitious scenario could lead to annual savings of up to 2.8 million tonnes of CO₂ and 11 terawatt-hours of energy – equivalent to the electricity consumption of around 3 million European households [9].

These figures show: Copper recycling is not a niche topic, but a highly relevant economic lever – for material availability, climate protection, and competitiveness.

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Europe's Raw Material Dependency: Not Just Copper

The challenge is not limited to copper – the EU is also highly dependent on imports for many other strategic materials:

• Magnesium is particularly critical: around 93–99% of European demand is sourced from China [10].
• Similar figures apply to rare earths, essential for high-tech applications and green technologies – Europe imports around 94% from China, Malaysia, and Russia [11].
• For lithium, the key material for batteries, import dependency exceeds 80% [12]. The main suppliers are Chile, Australia, and China.
• In the aerospace industry, titanium is a vital lightweight material. Here, there is a high dependency on Russia, especially the world’s largest producer VSMPO-AVISMA [13].
• Even for more conventional metals like aluminum, derived from bauxite, Europe meets over 60% of demand through imports – mainly from Guinea, Brazil, and China [14].

These structural dependencies pose not only economic risks due to price volatility, but also geopolitical vulnerabilities – in the event of trade conflicts, sanctions, or export bans.

Building up recycling and processing capacities in Europe is therefore a strategic imperative – not just to secure supply, but also to strengthen technological sovereignty and crisis resilience.

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Conclusion: The Time to Act Is Now

Circularity is not a cost factor, but a strategic investment in supply security, innovation, and resilience.
Companies that invest in circular approaches today not only secure long-term material availability but also gain a competitive edge through innovation, cost advantages, and access to future markets.

Those who think circular today, will produce more resiliently tomorrow.

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What’s next?

The economic risks of linear raw material strategies are clear – now it’s time for concrete transformation steps.

Which materials and processes in your value chain hold untapped potential?
We support you with analysis, design strategies, and industry-specific expertise.

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References

[1] European Commission (2023). Critical Raw Materials Act – Proposal.
[2] Ellen MacArthur Foundation (2020). Completing the Picture: How the Circular Economy Tackles Climate Change.
[3] European Copper Institute (2023). Annual Copper Use in the EU.
[4] Umicore & UNEP (2023). Urban Mining Factsheet – E-Waste Potential in Europe.
[5] Global E-Waste Monitor (2023). Collection and Recovery Rates of Copper from E-Waste.
[6] International Copper Study Group (ICSG, 2023). World Copper Market Structure.
[7] Own calculation based on ICSG and ECI data: 10–30% additional recycling rate on 4.4 million tonnes demand.
[8] European Copper Institute & IEA (2022). Economic Impacts of Copper Recycling.
[9] Fraunhofer UMSICHT (2023). Energy and Carbon Savings through Copper Recycling in the EU.
[10] Eurostat (2022). EU Imports of Magnesium by Country.
[11] European Commission (2023). List of Critical Raw Materials.
[12] Allianz Research (2023). Securing Raw Materials for Europe’s Battery Supply Chain.
[13] Reuters (2024). Europe’s Titanium Dependency on Russia’s VSMPO.
[14] Eurostat (2023). International Trade in Bauxite and Aluminium.

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