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Recycling Critical Minerals: A Key to Sustainable Clean Energy Transitions

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Highlights

  • The IEA report demonstrates how recycling critical minerals could reduce new mining development by up to 40% by 2050.
  • Scaling up recycling could save $600 billion in mining investments and potentially create a $200 billion market by 2050.
  • Global efforts in critical minerals recycling can enhance energy security, diversify supply chains, and significantly reduce greenhouse gas emissions.

A first-of-its-kind report from the International Energy Agency (opens in a new tab) (IEA) highlights the transformative potential of scaling up critical minerals recycling to enhance energy security, diversify supply chains, and reduce greenhouse gas emissions. The report, Recycling of Critical Minerals: Strategies to Scale Up Recycling and Urban Mining, underscores how recycling can complement mining investments to meet the surging demand for materials vital to clean energy technologies.

What are the IEA’s key findings?

  1. Impact on Mining Demand
  • Scaling up recycling could reduce the need for new mining development by 25-40% by mid-century, depending on the mineral.
  • By 2050, recycling could lower new mining needs by 40% for copper and cobalt and 25% for lithium and nickel, critical for solar, wind, electric vehicles (EVs), and batteries.
  1. Cost Savings and Investment Needs
  • Around $600 billion in mining investments is needed through 2040 to meet demand, but without recycling, this figure would rise by 30%.
  • Recycling offers a cost-effective solution to bridge the gap in critical mineral supply.
  1. Policy Momentum and Market Growth
  • More than 30 recycling policy measures have been introduced globally in the past three years, aiming to accelerate material recovery and reuse.
  • If fully implemented, the market value of critical mineral recycling could reach $200 billion by 2050.
  • The market for recycled battery metals has already grown 11-fold in under a decade.
  1. Energy Security and Environmental Benefits
  • Recycling reduces reliance on imports, mitigating supply shocks and price volatility, particularly in regions with limited domestic mineral resources.
  • It cuts greenhouse gas emissions by 80% compared to mining and prevents end-of-life technologies from becoming waste.

Challenges and Regional Variances

  1. Recycling Capacity vs. Feedstock Availability
  • Recycling capacity is growing rapidly, with battery recycling seeing 50% year-on-year growth in 2023.
  • However, feedstock availability is lagging, particularly outside China, with significant gaps projected in Europe, the US, and India by 2040.
  1. China’s Dominance
  • China leads globally, with more than 70% market share in material recovery and pretreatment.
  • The country has further strengthened its position with a state-owned enterprise dedicated to battery recycling.
  1. Policy and Regulatory Barriers
  • Existing policies often lack clarity and long-term vision, particularly in export rules for used batteries and EVs, creating barriers to investment.
  • Regional disparities in policy support are hindering global progress.
  1. Environmental Concerns:
  • Poorly managed recycling processes can lead to pollution and water contamination.
  • strengthened recycling standards and robust environmental safeguards are needed.

IEA Recommendations for Policymakers:

  • Develop clear, long-term policy roadmaps with specific targets and milestones to offer certainty to investors.
  • Expand financial incentives and material recovery targets to more industries and sectors.
  • Improve recycling standards to mitigate environmental and social impacts.
  • Address regulatory gaps, particularly around the export and collection of used batteries and EVs.
  • Invest in building regional recycling capacity to bridge the gap between feedstock availability and demand.

Conclusion

Critical minerals recycling offers a promising pathway to support the global energy transition, reduce dependence on mining, and enhance sustainability. While investments in mining remain crucial to meet rising demand, recycling can maximize existing resources and provide significant cost and environmental benefits. The IEA report calls for coordinated global efforts to scale up recycling initiatives, supported by robust policies and transparent regulations. By doing so, nations can secure critical minerals for the future while mitigating environmental and geopolitical risks.

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