Highlights
- European researchers identify multiple barriers hindering the development of a rare earth permanent magnet recycling value chain in the EU.
- Key challenges include:
- Lack of policy support
- Economic factors
- Technological constraints
- Exacerbation by China’s market dominance
- Authors recommend:
- Coordinated policy actions
- Regulatory frameworks
- International cooperation
- The goal is to overcome barriers and establish a viable EU recycling chain.
Authors from Belgium and Germany discuss barriers to recycling in the form of rare earth permanent magnets in Europe. Reported in the peer-reviewed journal [Energy Reports](https://www.sciencedirect.com/science/article/pii/S2352484724004463 (opens in a new tab)), the authors first highlight the criticality of rare earth permanent magnets, a necessity for multiple technologies and markets. The development of a European Union (EU) recycling value chain for permanent magnets remains challenging due to a confluence of barriers, from economic factors and policies to supply chains and technology constraints. Needed moving forward, is a coordinated policy action to address such barriers and regulatory gaps and note consequent action must apply to both upstream and downstream across the rare earth elements (REE) value chain. Such a integrated holistic dynamic becomes especially important given China’s dominance.
A confluence of factors of policy, economics, supply chains and technology hinder the establishment of recycling processes for RE magnets in the EU.
The authors come together to find a way for the EU to ultimately leapfrog its current challenged position. Vasileios Rizos, PhD, (opens in a new tab) Centre for European Policy Studies (CEPS), Leuven International and European Studies (LINES), KU Leuven, trained in economic research along with Edoardo Righetti (opens in a new tab), MSc cum laude in Resource Economics and Sustainable Development from the University of Bologna BSc in Economics and Business from the University of Verona and CEPS and Amin Kassab, MSc, CEPS (opens in a new tab) and Paderborn University, Department of Economics, embarked on an intellectual journey involving literature reviews and interviews, finding several policy-related barriers documented in the literature, including the following:
Evidence
| Barriers | |
|---|---|
| Lack of public support in the form of R&D funding and financial incentive | Frost et al., 2021 (opens in a new tab); Ilankoon et al., 2022 (opens in a new tab) |
| Lack of eco-design requirements | Tsamis and Coyne, 2015 (opens in a new tab) |
| Insufficient policies on collection of EoL products with RE magnets | Haque et al., 2014 (opens in a new tab); Gregoir et al., 2022 (opens in a new tab) |
A prime barrier, previously raised by Burkhardt et al., 2020 (opens in a new tab), Burkhardt et al., 2021 (opens in a new tab) relates to the lack of legal rules on providing information in the form of labels about the magnets included in end-of-life (EoL) applications.
The authors both corroborate and emphasize the criticality of this barrier for economic feasibility of recycling processes.
What is some policy-relevant, novel contributions made by the authors?
Importantly a lack of EU targets aimed at boosting both the recovery of REEs from EoL applications and magnet manufacturing with recycled content.
Need for an EU regulatory framework for RE magnets
On the one hand this framework must offer incentives for the development of recycling markets and on the other hand facilitates recycling through transparency obligations.
Are the EU regulatory frameworks to borrow from?
Yes. Batteries offer us an example. The EU has put in place such a regulatory framework with concrete material recovery targets, minimum recycled content shares and information requirements as reported by the Belgium and Germany-based authors.
Also a comparable framework has been put forward for permanent magnets through the new European Critical Raw Materials Act (European Union, 2024 (opens in a new tab)) that anticipates the introduction of secondary legislation setting recycled content obligations and lays down labelling requirements as noted above.
What should be introduced in the form of a regulatory framework in Europe?
Introduce material recovery targets for REEs when the recycling market has matured through product-specific legislation.
So overall what are their empirical findings?
Such policies mentioned above represent potential to support the development of a recycling chain in Europe, though given the time required for their formal introduction and implementation their impact is not expected to be seen in the short-term. Meaning this is more of a longer-term solution.
What are some key barriers not supported in the literature but nonetheless highly relevant?
A lack of credible certification schemes and complex regal rules for shipping EoL products with magnets within the EU for recycling.
Importantly the European authors acknowledge the need for more international cooperation and multilateral solutions for achieving circularity of magnets. This is the case as these supply chains are global.
So, the authors find it’s not a straightforward proposition to create a business environment in Europe conducive to recycling magnets?
No, it is not. Across the board the authorsreport the need for multiple policy intervals across a range of different EU domains, including a policy strategy and program involving differing sustainable products and eco-design, EU laws on waste shipments and product-specific legislation.
Note the evidence bolsters the claim above of the need for a variety of policy instruments supporting sustainability transmissions.
What are some economic challenges associated with this topic?
| Economic Challenges | Evidence |
|---|---|
| Costly extraction of EoL magnets | Sprecher et al., 2014 (opens in a new tab) |
| Volatile RE prices | Müller et al., 2016 (opens in a new tab) |
| The uncertain profitability of the magnet recycling business | Raspini et al., 2022 (opens in a new tab) |
| Competition with cheaper magnets made of virgin materials | Diehl et al., 2018 (opens in a new tab)2 |
What are novel insights infused into the discussion from the European authors?
High energy prices, low REE prices, plus a lack of an established EU market for recycled magnets represent a negative impact on the economic feasibility of recycling processes, meaning uncertainties.
Summary
The authors herein identify major challenges that need to be overcome by the EU to develop a viable recycling chain. Given the extent of identified barriers the calls for policy action on multiple fronts (EU policy and multilateral) are urgent. They need to address current regulatory gaps and create an environment that provides certainty for businesses across different segments of the recycling chain.
The value chain when considering action must be holistic, incorporating both upstream and downstream aimed at recovery of REEs, funding for recycling projects and more.
What are must areas for future research?
- Advanced investigation of existing financial challenges and how to improve the economics of recycling RE magnets in the EU (e.g. batteries).
- A diverse confluence of expertise, wisdom, and know-how, with geographic representation. Meaning local expertise must be composed with others, such as in China, the latter where industry has long been established. This could represent a promising future avenue for similar exploratory research and provide insights about how some of the identified barriers (e.g. lack of multilateral solutions, missing segments in the value chain) could be overcome.
- Assessing the interplay of different recycling technologies for magnets and how they can co-exist to maximize the potential for recovery of REEs from EoL applications.
Daniel
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