The current security and energy crises have underscored how dependent Europe is on imports of fossil fuels and other critical raw materials, while climate mitigation remains urgent. Accelerating the phase down of fossils fuels, increasing energy savings and reducing over-dependencies on foreign material inputs is now critical for the EU.
The transition of European industry to fossil free production based on domestic resources will be instrumental. Currently around 70 percent of EU industrial emissions comes from the production of a few key carbon-intensive materials: iron and steel, aluminium, cement and lime, as well as basic chemicals used primarily to produce plastics. These activities also account for a large share of EU energy and natural resource consumption.
Today, approaches to decarbonising industry focus mainly on reducing the carbon intensity of virgin materials, for instance through the production of low-carbon primary steel or cement. However, the current European context requires a new approach maximising both energy and resource efficiency with the same level of importance. Increasing and improving closed-loop recycling and developing more material-efficient value chains will be essential.
Integrating available options for enhanced recycling and material efficiency into a comprehensive decarbonisation strategy would allow industry to benefit from significant GHG emissions reductions, energy and material savings and very likely increase the sector’s competitiveness and economic resilience, as demonstrated by this report. Developing more circular and resource-efficient value chains in the production ofsteel, aluminium, plastics and cement would substantially reduce green electricity and green hydrogen needs, as well as GHG emissions, while playing to the EU’s long-term competitive economic strengths, such as digitalisation, logistics and advanced manufacturing technologies.
This study, developed by Agora Industry with the support of Material Economics, details the different circularity levers for each product and their potential to reduce GHG emissions. It further provides a review of relevant policy tools and recommendations for prioritisation under European Union (EU) and Member States legislations.
A timely deep dive, authored by Material Economics, on the shortcomings of the EU’s plastic waste and recycling statistics supplements this study. This topic has been underrated despite its significance. Current EU statistics are shown to fall short of tracking the entire amount of plastic waste generated each year, leading to inaccurate and under-evaluated targets for reducing, collecting and recycling plastic waste.
The circular economy urgently needs to become an integral part of the EU’s policy strategy for the decarbonisation of key carbon-intensive industrial value chains, including in the EU’s second Circular Economy Action Plan and national legislation throughout Europe – and beyond.
The report “Mobilising the circular economy for energy-intensive materials: How Europe can accelerate its transition to fossil-free, energy-efficient and independent industrial production” will be published and available for download, together with the short paper “Europe’s missing plastics – taking stock of plastics circularity”, on March 25, 2022.