Responding to the supply crunch for critical materials – a circular economy strategy for cobalt in Europe
Cobalt is a critical material for the transition to electric vehicles and a low-carbon economy. Our paper assesses the supply chain of cobalt in the EU and develops scenarios about future use. By Joris Baars, Teresa Domenech, Raimund Bleischwitz, Hans Eric Melin, and Oliver Heidrich
Worldwide, societies struggle to overcome the economic recession following the outbreak of the Covid-19 pandemic. Yet, there is emerging consensus on the need for a green recovery with a transition to a low carbon economy and meeting net zero carbon goals. Activities are in fact impressive; the Race to Zero Initiative claims to have obtained zero emission pledges from 450 cities, 505 universities (including UCL and Newcastle University) and more than a thousand businesses covering 53% of the global economy and roughly one quarter of global emissions. The next UN climate change conference, dubbed as COP26, is likely to become a landmark bringing together main actors. Shifted from late 2020 to November 2021 in Glasgow, Scotland, it is now a window of opportunities to refresh ambitions and to deliver. UK Prime Minister Boris Johnson, the main host of COP26, calls for a ‘whole systems approach’ to decarbonisation efforts.
The quest is for a rapid acceleration in low carbon technologies and other clean tech, along with a behavioural change adhering to the new normal of less commuting and increased demand for green space and fresh air. However, there is a bottleneck in the expansion of clean tech – critical raw materials, which are characterised by a high dependence on one or just a few suppliers on the world market and by low substitutability, i.e. entire supply chains are being interrupted if the material can’t be delivered on time. The UK and the European Union are especially vulnerable to those risks. Their updated list of critical materials has been expanded to 30 materials, up from 27 in 2017. In order to meet its climate neutrality goal, the EU estimates it will need up to 18 times more lithium and five times more cobalt in 2030. The forecasts rise to 60 times more lithium and 15 times more cobalt by 2050.
So, what can be done to overcome the supply crunch for critical materials in order to transition to a low carbon economy? Raw material partnerships with key suppliers are an option; however, this requires tough negotiations with actors like China and Russia during times when trade talks are already politicised and diplomacy stretched. A more circular economy for those critical materials that could potentially be recovered from tomorrow’s use will be smart. Research is needed to figure out feasible strategies, pathways and outlooks into markets for precious more circular materials.
The case of cobalt
Take the case of cobalt, a material that will be needed five times the amount in 2030 compared to today’s level, if the EU is to meet its decarbonization target. Vital to lithium-ion batteries used in electric vehicles (EV), over 70 per cent of the world’s supply comes from the Democratic Republic of Congo (DRC), one of the poorest countries in the world. A significant percentage comes from small artisanal mining and involves children. Our paper has been looking at the supply chain of cobalt in the EU and developed scenarios about future use. We applied material flow analysis to understand current and future flows of cobalt embedded in electric vehicle batteries across the European Union. A reference scenario is presented and compared with four strategies:
- technology-driven substitution,
- technology-driven reduction of cobalt,
- new business models to stimulate battery reuse/recycling and
- policy-driven strategy to increase recycling.
We find that new technologies provide the most promising strategies to reduce the reliance on virgin cobalt substantially. To avoid potential burden shifting such as an increase in nickel demand, however, the paper argues technological developments should be combined with an efficient recycling system. We conclude that more ambitious circular economy strategies, at both government and business levels, are urgently needed to address current and future resource challenges across the supply chain successfully.
Action points that need to be considered include continuous research into material substitution developed in collaboration between material science and industry as a long-term option. Considering the long lead times to bring supplies on stream, promoting new business models and innovation that enhance reuse of EV batteries offers rapid replacement options; it needs to cover collection as well and systems that integrate energy storage options using remaining capacity in End-of-Live EV batteries. Indeed, whole systems thinking is key!
Fortunately, the current EU policy will be favouring markets for secondary battery resources, which may consequently strengthen industrial capacities for battery and cathode production and recycling in the European Union. Under the conditions of a Green Deal it could become a useful strategy for regions with a high number of expected EVs in the future and industrial capacity. Extended Producer Responsibility (EPR) and a general shift to a more circular economy will be helpful ingredients to recapture critical materials in the future.
Writing this paper
Writing this paper has been a good case for collaboration. The lead author, Joris Baars, completed a MSc on Sustainable Resources at UCL and was supervised by Teresa Domenech during his dissertation on cobalt. Boris the joined Newcastle University in September 2018 as a PhD student supervised by Oliver Heidrich, who works with governments and industry on climate change strategies and requirements for critical materials. The team of researchers has collaborated before as part of the NERC Catalyst grant (Layers) and its Security of Supplies call, and it was complemented by Hans Eric Melin and his rich industry experience. As often, team building matters and it takes a bright early career researcher to accomplish the mission. We all look forward to more research on a circular economy for critical materials.