How circularity can secure Europe’s critical raw materials future
By Professor Dato Dr Ahmad Ibrahim
The circular economy is gaining traction worldwide. This is driven by global concerns on climate and material shortages. New rulings on decarbonisation call for the adoption of effective emission reduction practices in businesses. But a bigger concern relates to the security of supply of the materials that feed the global economy. There are signs of key materials reaching the limits. For businesses these days, having resilient supply chains is more critical than efficiency. The EU is among those treating circularity as a matter of urgency.
The EU’s Critical Raw Materials Act (CRMA) is a bold and necessary response to a stark geopolitical reality: Europe’s green and digital transitions depend on materials it largely does not mine. While the Act rightly focuses on diversifying supply and boosting domestic extraction, a myopic focus on sourcing new tonnes of material is a strategic and environmental trap. As a new analysis from the University of Cambridge Institute for Sustainability Leadership (CISL) underscores, the true pathway to resilience lies not just in digging more, but in using what we already have. Embracing circularity is the key to strengthening the CRMA and securing Europe’s industrial future.
The logic is compelling, yet underprioritised. The CRMA sets ambitious benchmarks for recycling and material efficiency, but these are often viewed as secondary to the primary goal of new supply. This is a critical error. Circular strategies are not a complementary add-on; they are a foundational pillar for sovereignty, competitiveness, and sustainability.
First, circularity directly mitigates the supply risk for businesses. Recycling permanent magnets from end-of-life vehicles or recovering lithium from batteries reduces immediate dependence on imports from a handful of third countries. It creates a domestic, “urban mine” that is politically stable and can be strategically managed. The CISL report highlights that boosting recycling and closed-loop systems must be accelerated through urgent standards for product design, clearer definitions of waste-derived materials, and incentives for secondary material use. The CRMA’s recycling targets are a start, but they must be backed by a regulatory framework that makes circular business models the most economically viable choice for the industry.
Second, using materials more efficiently is a multiplier for strategic autonomy. This is the unsung hero of the resilience agenda. Through smarter design, lightweighting, manufacturing innovation, and product-life extension, we can drastically reduce the volume of critical raw materials needed per unit of economic output. This lessens the scale of the supply challenge, buys time for responsible mining projects, and reduces environmental footprints. The Act should champion material efficiency with the same vigour applied to mining permits, embedding it in eco-design regulations and supporting R&D for disruptive innovations.
Third, substitution and innovation can turn vulnerability into leadership. Where possible, substituting scarce materials with more abundant or circular alternatives is a direct risk reducer. More importantly, it positions European industries at the forefront of next-generation, sustainable technologies. The CRMA’s focus on strategic projects must explicitly prioritise and fund R&D into alternative materials and circular process technologies, turning a defensive strategy into an engine for green industrial leadership.
The barriers are significant—entrenched linear business models, underdeveloped recycling infrastructure, and complex supply chain logistics. Overcoming them requires the CRMA to be implemented not as a narrow sourcing directive, but as a catalyst for systemic change. This means: Linking permits to principles: Tying domestic mining and processing permits to strict environmental standards and demonstrable commitments to integrate recycled content and design for circularity. Creating markets for circularity: Implementing ambitious and mandatory green public procurement for circular products, alongside tax advantages for secondary materials to level the playing field with virgin ones. Fostering unprecedented collaboration: Enabling the cross-sectoral partnerships—from miners to manufacturers to recyclers—that CISL’s work exemplifies, ensuring materials are recovered and flow back into the economy.
The CRMA is a pivotal piece of legislation. Its success, however, will not be measured by how many new mines it enables, but by how effectively it reduces Europe’s absolute vulnerability. By placing circularity at the heart of its implementation—treating recycling, efficiency, and innovation as non-negotiable strategic imperatives—the EU can build a resilient, sovereign, and truly sustainable industrial base. The message is clear: Europe’s security and competitiveness will be won not only in the ground, but in the loop.
There is no denying that going circular would warrant strategic initiatives. They can be categorised as game changing and enabling. The game changers are those initiated by the business and industry. These include new circular business models such as EPR, product-as-a-service, digital product passport, and designing for circularity. The government will create such enablers as procurement, ecosystem, supporting regulations to incentivise the change. There must be buy-in from consumers through awareness and education.
The author is affiliated with the Tan Sri Omar Centre for STI Policy Studies at UCSI University and is an Adjunct Professor at the Ungku Aziz Centre for Development Studies, Universiti Malaya. He can be reached at ahmadibrahim@ucsiuniversity.edu.my.