Recycling Critical Minerals: How the EU and U.S. Turn Waste into Supply
- Anonymous
- 1 day ago
- 6 min read
Refining concentration by geography and ownership, 2024 (IEA, Global Critical Minerals Report 2025).
As clean energy and high-tech industries expand, demand for critical minerals is rising fast, while supply, especially at the refining stage, remains highly concentrated. Because new mining and processing projects are slow and costly to build, both the EU and the U.S. are turning to recycling as a faster way to strengthen supply security. The EU follows a rule-based, target-driven model, while the U.S. relies more on funding and technology programs. Recycling can reduce dependence and create jobs, but its impact will stay limited in the near term and cannot replace primary mining.
Why This Matters
Concentration Risk: If critical minerals remain concentrated in a few refining hubs, then supply chains will stay exposed to geopolitical shocks and export controls.
Supply Chain Efficiency: If countries fail to build recycling systems now, then they will miss the chance to turn waste into a strategic supply advantage.
Commercial Constraints: If recycling is overestimated as a short-term solution, then policies will be built on unrealistic expectations and weak results.
Why has recycling become an indispensable pillar of critical minerals strategies?
As the global economy shifts toward clean energy, demand for critical minerals is rising fast. Clean energy technologies, such as electric vehicles, wind turbines, solar panels, and energy storage systems, all rely heavily on minerals like lithium, nickel, cobalt, rare earths, and graphite. However, global supply of critical minerals is highly uneven, not only in the geographical distribution of mineral reserves and primary production, but also in the concentration of refining and processing capacity that turns primary products into refinery-grade materials. China’s dominant position in refinery production in various critical minerals has created strong strategic leverage; thus, export controls can be used as a strong policy tool during times of geopolitical tension. This raises serious concerns for countries that depend heavily on critical minerals but lack strong domestic supply and processing capacity.
In this context, many solutions on the supply side are difficult to achieve in the short term. Rapid expansion of domestic mining and development of processing technologies are constrained by long permitting processes, resource endowment limits, and technical barriers. Because new supply is slow and expensive, attention has shifted towards recovering and recycling critical minerals from waste and scrap.
Recovering and recycling critical minerals from scrap and waste (like e-waste and batteries) involves advanced pyrometallurgy (smelting) and hydrometallurgy (acid leaching) to extract valuable metals (lithium, cobalt, rare earths, etc.), creating a vital secondary supply chain that reduces reliance on mining, boosts energy security, and lessens environmental impact, though challenges remain in collection and processing infrastructure.
What policy instruments are being deployed to support critical minerals recycling?
Policy momentum is building rapidly, marked by a wave of new regulations. The International Energy Agency (IEA)’s Critical Minerals Policy Tracker shows over 30 new measures on critical mineral recycling introduced since 2022. Four main categories emerge: strategic plans, extended producer responsibility (EPR), financial incentives, and cross-border trade regulations. Certain policies add regulatory mandates like industry-specific targets for material recovery, collection rates, and minimum recycled content, yet truly comprehensive approaches are scarce. Among the 22 countries and regions examined, only three have built out broad systems combining clear targets, implementation mechanisms, monitoring systems, and economic incentives.
With the European Union (EU) and the United States (U.S.) as two of the major economic blocs leading in the recycling of critical minerals , examining their policies and outcomes can offer valuable lessons for other countries seeking to strengthen supply security and build resilient recycling systems.
The EU approach: rule-based and target-driven
The EU has set clear and ambitious quantitative targets for critical minerals recycling. Under the Critical Raw Materials Act (CRMA), secondary supply is formally integrated into the EU’s broader raw materials strategy. By 2030, the EU aims to produce at least 25% of its annual consumption of strategic raw materials through domestic recycling, making recycling a core pillar of supply security rather than a peripheral environmental tool.
To reach these targets, the EU relies on a comprehensive and layered policy toolkit, combining producer responsibility rules, financial incentives, and cross-border trade controls.
One important example is Regulation (EU) 2024/1781, the Ecodesign for Sustainable Products Regulation (ESPR), which sets sustainability requirements for products sold in the EU market. The ESPR requires the tracking of material content, documentation of recycled content, and standardized protocols for material recovery. These requirements apply not only to EU-made goods, but also to imports from third countries, ensuring that recycling-related standards shape both internal production and external trade.
Alongside regulatory obligations, the EU also uses strong financial incentives to accelerate recycling capacity. As part of the CRMA implementation, the European Commission has selected 47 Strategic Projects covering extraction, processing, recycling, and substitution of raw materials. These projects enter the implementation phase from 25 March 2025 and are expected to run through 2030, with a total estimated investment of about €22.5 billion. By labeling projects as “strategic,” the EU gives them priority access to finance, faster permitting, and political support, including recycling-focused facilities.
Trade policy forms the third pillar of this framework. To prevent valuable secondary materials from leaving the EU, the Commission has updated the List of Waste and classified shredded battery waste (known as “black mass”) as hazardous. This strengthens oversight of shipments and effectively bans exports of black mass to non-OECD countries. By tightening export controls on recyclable waste, the EU seeks to retain critical secondary resources within its own industrial system and support the build-up of domestic recycling and processing capacity.
The U.S. approach: funding-driven and technology-led
Compared with the EU, one of the most distinctive features of the U.S. approach is its funding programs to accelerate recycling and supply-chain technologies. Rather than building a single, unified regulatory framework, the U.S. has launched a large number of targeted funding initiatives, especially through the Department of Energy (DOE). These initiatives show that the U.S. treats critical minerals recycling primarily as a technology and investment challenge, using public funding to stimulate innovation, scale up projects, and attract private capital.
Beyond domestic policies, the U.S. has also used corporate partnerships to shape global recycling technology ecosystems and extend its influence outside its borders. U.S.-based American Battery Technology Company (ABTC) has worked with Canada’s BASF on battery recycling technologies, while U.S. resource company ReElement has partnered with India’s Exigo to create a joint venture using ReElement’s advanced chromatographic separation technology.
Legislative proposals introduced since late 2024 show a growing willingness to restrict exports of certain recyclable materials, especially magnet scrap and battery black mass, to China, signaling an emerging securitization of recycling inputs. These efforts include bills and amendments introduced in Congress by members such as Representative Rob Wittman (R-VA) and Senators Jeanne Shaheen (D-NH) and Todd Young (R-IN).
Economic and industrial impact: what recycling can and cannot deliver
Despite policy advances, recycled materials have not yet grown fast enough to match rising overall material demand. For copper, which is essential for electrical uses, the share of secondary supply (including direct-use scrap) in total consumption declined from 37% in 2015 to 33% in 2023. A similar trend appears for nickel, where the recycled share fell from 35% to 31% over the same period. Aluminum stands out as an exception: supported by mature waste management systems and favorable regulation, its recycled share rose slightly, from 24% to 26%.
There is also a wide gap between advanced and developing economies in current recycling performance. China, Europe, and North America show the highest levels of secondary production and recycled input rates across minerals, reflecting their more developed refining and recycling industries. Taking electronic waste (e-waste) as an example, collection rates are much higher in advanced economies than in emerging and developing ones. In Asia and Latin America, collection rates in developing economies remain below 5%, and only 1% in Africa, with little progress since 2010. By contrast, rates reach about 30% in Japan and Korea and 40-50% in Europe and North America.
Despite these limits, recycling offers clear economic and industrial value. It can lower import dependence, create skilled jobs in processing and chemical engineering, and help countries retain more value rather than exporting scraps. At the same time, its constraints are significant. Large volumes of recyclable material from EVs, batteries, and wind turbines will only become available after 2040, when today’s assets reach the end of their life. Advanced recycling technologies are also concentrated in only a few countries. Overall, recycling can improve supply security and support industrial development, but it cannot substitute for primary mining and will remain a partial solution rather than a complete one.
Take Action
Build recycling policy around real waste flows and product lifetimes, not political targets alone.
Invest in collection systems alongside recycling technology.
Combine regulation, funding, and trade tools instead of relying on only one policy lever.