Toward Sustainable Metallurgy: Managing Critical Raw Materials for a Climate-Neutral 2050

Would you like to predict the future of metallurgy with a high accuracy? It is much simpler to make your own future, or better say our common shared future. While several current approaches toward sustainable metallurgy tend to radically exchange current technologies with completely new and conceptually different processes, this edition of the newsletter “Materials Insights” argues for a gradual and natural evolution of current technologies toward accomplishing an ecological, sustainable, responsible and profitable critical raw materials (CRMs) management as the first main strategy toward sustainable metallurgy and the transition toward a climate-neutral 2050.

As the push towards green and renewable energies increases, the global demand for various critical raw materials has been accelerating scientific, technological, and political efforts to secure current and future needs. These materials are essential for manufacturing various technologies like wind turbines, solar panels, batteries, and electric vehicles. The demand for critical raw materials is therefore expected to continue rising sharply as the world accelerates toward reducing greenhouse gas emissions and achieving climate-neutrality by 2050.

Moreover, recent global innovations as well as resource challenges have increased the need for more resilient and secure supply chains, prompting efficient policies to tackle the resulting risks as well as possible market fluctuations. Nevertheless, as many industries are highly dependent on critical raw materials, extracting, processing, and recycling these materials can have high environmental impacts as well as the risks of global competition on resources, prices fluctuating, and geopolitical tensions. The following are some of several critical raw materials:

1. Lithium and Cobalt: Critical for battery technology, especially in electric vehicles and energy storage systems.
2. Rare Earth Elements (REEs): Used in permanent magnets that are vital for wind turbines and electric vehicle motors.
3. Copper and Aluminum: Extensively used in electrical infrastructure, including power lines, renewable energy systems, and energy-efficient buildings.
4. Silicon: Essential for solar panels.
5. Nickel: This metal is essential for stainless steel and alloys but has gained particular importance in battery technology, especially for electric vehicles (EVs), due to its energy density properties.
6. Graphite: Used primarily in the anodes of lithium-ion batteries, graphite is critical for energy storage technologies that support renewable energy systems.
7. Manganese: Vital for steel production and also plays a role in battery technology. It is used in lithium-ion battery cathodes and is considered an alternative to cobalt
8. Zinc and Lead: Important for corrosion-resistant galvanizing and alloys in the construction and automotive industries. Lead is also crucial for batteries, particularly for backup power and energy storage solutions.
9. Tin: Used in soldering, which is essential for electronic circuitry in various technologies, including renewable energy technologies.
10. Titanium: Known for its strength, light weight, and corrosion resistance, titanium is used in aerospace, military, and also in paints and coatings. It plays a role in offshore wind farms where corrosion resistance is crucial.
11. Platinum Group Metals (PGMs): These metals, including platinum, palladium, and rhodium, are critical for catalytic converters, which reduce vehicle emissions, and are also used in fuel cells for clean energy solutions.

Challenges and Solutions

Creating Material Alternatives

while some industries are dependant on materials that are not abundant on earth, the research on alternative solutions that rely more on available materials. For example replacing lithium and rare earth metals in batteries and magnetic materials with more available elements could not only solve the material scarcity but also reduce the cost of their products and processes.

Creating New Approaches

for metal extraction and metal processing technologies such as the recent development in hydrometallurgy and electrochemical processes that offer alternative solutions. However, some of these technologies increases the demand of energy to achieve their products or require rigorous experimentation to reveal the optimal manufacturing conditions and variables.

Diversifying Supply

diversifying supply sources and building efficient supply chains globally and locally are necessary to reduce various risks resulting from over-reliance on certain regions or trade relations.

Increasing Reuse, Refurbishing, and Recycling Guided by Circular Economy Principles

Increasing products life and Enhancing the capacity to recycle these materials from end-of-life products to reduce dependency on primary materials and decrease environmental impacts.

Research and Development

Investing in alternative materials and technologies that could either replace scarce materials or reduce the quantities needed. Such a transition requires visionary plans and effective change management on the short-term and long term.

Learning from the EU Strategies and Challenges

Regarding the supply of critical raw materials for the green energy transition, the EU current strategies reflect Europe’s sustainable approach for the supply of raw materials essential for the green transition, with several proactive measures being taken.

1. The Critical Raw Materials Act

Europe has identified 30 critical raw materials that are essential for the green and digital transition. This includes lithium, which is crucial for e-mobility, and rare earth elements vital for technologies like electric vehicle motors and wind turbines. The Act aims to reduce dependency on imports, particularly from countries like China, by diversifying supply sources and boosting domestic production and recycling capabilities .

https://ec.europa.eu/newsroom/growth/item-detail.cfm?item_id=686079

2. Supply Chain Challenges

Europe is exploring ways to diversify its supply sources and increase its own production and processing capacities .

https://www.euronews.com/business/2023/03/10/explainer-where-are-the-critical-raw-materials-the-eu-needs-for-its-green-transition

3. Mining and Recycling

Europe faces challenges in scaling up mining due to high energy costs, volatile commodity prices, and environmental concerns. However, the recycling of critical raw materials like copper and rare earth elements is seen as a key area for development. The EU has set ambitious targets to increase recycling capacities to meet a significant portion of its raw material needs by 2030 .

https://www.intereconomics.eu/contents/year/2023/number/2/article/the-eu-s-quest-for-strategic-raw-materials-what-role-for-mining-and-recycling.html

4. Strategic Partnerships and Domestic Development

Europe is looking to form strategic partnerships with mineral-rich countries and to develop simultaneously its domestic mining and processing capacities. Innovative and sustainable mining technologies are being promoted to address environmental and sustainability concerns .

https://www.eurelectric.org/news/ps23_rawmaterials

5. Future-Proofing Supply Chains

working to sustainable supply chains is highly important to mitigate current and future risks, to develop alternative sources, and to increase EU resilience in raw material value chains.

https://ec.europa.eu/newsroom/growth/item-detail.cfm?item_id=686079

Implementing Strategic Roadmaps and Action Plans

Foresight Studies

The foresight studies are necessary to project the needs and challenges up to 2030 and 2050, helping for long-term strategic technologies and sectors. This forward-looking approach is crucial for anticipating future material needs and preparing the supply chains accordingly.

Strategic Resilience and Alliance

No one can innovate alone. Global collaboration and share of knowledge is necessary to accelerate the global transition toward a better future. While business competitiveness are necessary, it requires a degree of coexistence with cooperation because we all share the same future on Earth. While we need to increase local capacities in extraction, processing, and recycling, we also need to create and maintain global alliances in which developing and developed countries can work together on securing Raw Materials through alliance, experience exchange and international fair trade approaches. This alliance aims to consolidate efforts across various stakeholders and reinforce globally organized supply chains. The alliance can potentially expand to include other critical materials and base metals in the future, while also adhering to international trade obligations and promoting sustainable and responsible sourcing practices.

Increasing Awareness of Supply Risks

It is crucial to fully inform and explain policymakers, business leaders, investors, and trade negotiators about the supply risks associated with critical raw materials. This awareness is crucial for risk management and for encouraging the development of alternative materials and supply chain diversification strategies. This also aligns with the broader global agenda of sustainable development, supporting several SDGs, including responsible consumption and production, industry, innovation, and infrastructure. Moreover, public awareness campaigns are supportive for driving behavioral change and nudging consumer choices that favor sustainable and responsibly sourced products.

Technological Innovation

Investing in R&D to find innovative ways for mining extraction, processing, collecting and recycling CRMs is necessary to secure a sustainable future. This includes support for projects that focus on improving the efficiency of resource use and reducing the environmental footprint of extraction and processing activities. Such innovations can also involve the development of substitutes for the most critical materials to reduce dependency.

Environmental and Social Governance (ESG)

responsible sourcing of CRMs are necessary to minimize ecological disruption and promote sustainable practices. This covers the environmental impact as well as the social implications of raw material extraction, including fair labor practices and local communities affected by mining operations. Environmental, Social, and Governance (ESG) standards are, therefore, necessary to guide companies on sustainable practices and responsible management.

• Environmental Standards (Resource Management, Pollution Control, Energy Efficiency, and Biodiversity Conservation)
• Social Standards (Community Engagement and Impact, Labor Rights, Indigenous Rights, and Conflict-Free Sourcing)
• Governance Standards (Corporate Governance, Compliance and Anti-Corruption, Risk Management, and Reporting and Disclosure of ESG practices)

Strategic Partnerships and Geopolitical Engagement

Beyond trade agreements, building strategic partnerships with countries rich in CRMs is wise in order to secure stable and ethical supply chains. This also involves diplomatic engagement to ensure that global supply chains are not disrupted by any geopolitical tensions in the current and future political climate. These partnerships are crucial in diversifying supply sources and reducing supply risks.

Supply Chain Transparency and Risk Management

Increasing transparency in supply chains is another critical aspect. This involves tracking the origin and flow of materials to ensure that they are sourced responsibly with tools and methodologies to assess and manage risks associated with the supply of CRMs.

Recent Publications

Several recent publications on ESG standards in the raw materials industry, highlight current trends, challenges, and regulatory developments:

ESG Integration and Challenges

A report from BCG outlines a six-step process for businesses to identify and mitigate ESG risks in global supply chains. This includes creating transparency, setting up an ESG center of excellence, and fostering collaboration among stakeholders to embed ESG into core business operations .

https://www.bcg.com/publications/2023/managing-esg-issues-in-global-supply-chains

Automotive Industry Standards

Drive Sustainability’s 2023 Progress Report discusses the automotive industry’s advancements in sustainable raw material extraction, workforce wellbeing, and carbon neutrality. It also emphasizes the development of a common standard recognition framework to assess the maturity of ESG standards in responsible sourcing .

https://www.drivesustainability.org/mediaroom/drive-sustainability-launches-its-2023-progress-report/

Legislative Developments

The Critical Raw Materials Act (CRM Act) proposed by the EU aims to secure the supply of raw materials crucial for Europe’s green and digital transition. This includes efforts to reduce dependency on imports by boosting domestic mining and recycling, and diversifying supply sources .

https://www.twobirds.com/en/insights/2024/global/esg-outlook-proposals-for-net-zero-industry-act-and-critical-raw-materials-act

ESG Disclosure Trends

The article from Skadden, Arps, Slate, Meagher & Flom LLP notes the increasing legal and shareholder scrutiny on companies’ ESG disclosures and initiatives, especially in the U.S. It mentions the challenges faced by companies in meeting these evolving standards and the potential legal risks involved.

https://www.skadden.com/insights/publications/2023/07/esg-in-2023-a-mid-year-reviewsee

International ESG Standards

The article from Harvard Law School Corporate Governance discusses the rise of international ESG disclosure standards, noting efforts to consolidate various global sustainability disclosure frameworks under the new International Sustainability Standards Board (ISSB) .

https://corpgov.law.harvard.edu/2023/06/29/the-rise-of-international-esg-disclosure-standards/

Strategic Importance and Challenges

The publication, “Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability,” sets a comprehensive framework for addressing the strategic importance and challenges associated with securing a sustainable supply of critical raw materials (CRMs) for Europe. The integration of ESG (Environmental, Social, and Governance) standards, recent legislative developments, and industry-specific ESG challenges and advancements can significantly influence and be influenced by the strategies outlined in the document. The publication also interacts with various ongoing global initiatives and discussions around sustainability and raw materials management which are part of a larger global dialogue about how to manage the planet’s natural resources responsibly. These efforts are interconnected with advancements in technology, international law, economic policies, and environmental protection strategies that are shaping the future of sustainable development worldwide.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0474

Innovation and Research Focus

The publication “The need for joined-up thinking in critical raw materials research” Shows an emphasis on innovation in the extraction and processing of CRMs to reduce environmental impacts and enhance efficiency. Recent publications suggest that research is increasingly aligned with geopolitical interests, which could affect global collaboration efforts. This highlights the need for a more inclusive approach to CRM research that supports sustainable development goals worldwide .

https://pubs.geoscienceworld.org/geoenergy/article-abstract/doi/10.1144/geoenergy2023-001/621642/The-need-for-joined-up-thinking-in-critical-raw

Conclusion

The shift toward a climate-neutral future requires global cooperation and responsible actions and policies to secure that the transition can be applied globally and not only in specific regions. In addition, achieving a sustainable and resilient future in metallurgy requires a strategic evolution that balances technological innovation, responsible resource management, and global collaboration. With such a rising demand for critical raw materials, driven by the transition to renewable energy and circular economy, our needs shift to calls diversifying supply chain, improving processing technologies, researching alternative materials, developing efficient recycling, and advancing extraction technologies.

By integrating environmental, social, and governance (ESG) principles, and fostering partnerships, we can navigate the challenges of critical raw materials, paving the way for an ecologically responsible and economically viable shift toward a sustainable 2050.