Commodities, Features

The importance of a circular economy in the green transition

Words by Alexandra Colalillo

Society has to consider the sustainability of all components in the green energy revolution. This is where the circular economy is going to play a critical role.

In 1987, the United Nations Brundtland Commission defined sustainability as ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’.

At present, a means of achieving environmental sustainability is largely underpinned by the requirement of new technology to produce energy with as little carbon emissions as possible. However, less attention has been given to the environmental impacts caused by key minerals mined to accompany renewables.

In the context of achieving sustainability, it is important to note that the energy revolution towards renewables (solar, wind, hydro, geothermal, wave, tidal and nuclear) and newly built infrastructure for delivery are highly reliant on raw materials (e.g. cobalt and lithium), which are mainly sourced by mining.

A traditional linear economy (take, make, dispose) that fuelled the first three industrial revolutions will not enable a net-zero carbon emissions target by 2050. Instead, the requirement to shift to a circular economy, whereby a product can retain its functionality through repair or reuse, has never been more essential.

Challenges to transforming the energy industry

The fourth industrial revolution demands a green energy transition sourced from sustainable technologies that require intensive mineral demands instead of burning fossil fuels. The UN’s Sustainable Development Goals inform why intensive mineral demand growth is expected between now and 2050.

Non-renewable raw materials can be sourced from either mines or secondary supply (reuse or recycling). Ideally, demand would be satisfied by reuse and recycling of intensive minerals; however, stocks of secondary suppliers and recycling rates are inadequate to meet demand.

According to the Recycling Rates of Metals Status Report by the International Resource Panel, few materials have a recycling rate above 50 per cent, though many are crucial to clean technologies such as batteries for hybrid cars or magnets in wind turbines.

For example, end-of-life recycling for aluminium and cobalt is up to 70 per cent, yet secondary supply only accounts for 30 per cent of their growing demand. For lithium (Li), recycling only accounts for 1 per cent of present demand.

Substituting these intensive minerals to reduce dependency is a challenging task to achieve in a short time as alternatives, such as Li-free multivalent metal-ion batteries, are less mature in their developments and will take time to industrialise.

Therefore, in the interim, mining raw materials to fuel the demands of the green energy revolution is required for rapid decarbonisation and to achieve a net-zero emissions target by 2050.

Alexandra Colalillo is an economist and manager at a multinational professional services firm in Western Australia.

What minerals are required in the short-to-medium term?

Without recycling, the green revolution is going to have an environmental impact on water, soil and ecology. However, in the short-to-medium term, recycling cannot meet demand and there are supply challenges for commodities such as graphite, cobalt and lithium, for which increases in demand of close to 500 per cent are projected.

According to the 2020 World Bank Report, there is an anticipated increase in the demand for 12 commodities relied upon (see table right) to deliver a green energy future.

The environmental balancing act

The missing link in present conversation is a framework that balances the requirement to mine with the environmental and social impacts to deliver sustainable outcomes and benefits for organisations, people and the planet.

Biodiversity loss also needs to be considered in mining project evaluations and reliance needs to be reduced on problematic supply chains that don’t provide secure sustainable sources of metals.

Furthermore, consideration needs to be given to purposefully re-engineering products with planned obsolescence. Over the past century to facilitate three industrial revolutions, electrical and electronic equipment, and the industry that produces it, have contributed to enabling welfare, economic growth and job creation around the world.

However, the environmental and climate effects of continuous production and replacement of products that have emerged correlate to product lifetimes and obsolescence.

The term “obsolescence” itself can be defined where a product is replaced due to the desire for a new item or, alternatively, if the product no longer functions due to lack of performance of material or components.

When linking environment and climate effects to obsolescence, one could argue that in order to promote sustainable consumption and production, product lifetimes are required to be increased.

However, if we turn to the amount of selected electrical and electronic equipment (small household appliances, consumer equipment and photovoltaic panels, IT and telecommunications equipment, and large household appliances) placed on the market within the EU between 2011 and 2017, there has been a 19 per cent increase overall (Eurostat, 2019h).

When observing total consumption of electrical and electronic equipment in the EU in 2017, household expenditure was recorded at EUR 421 billion, amounting to EUR 1900 per household (Eurostat, 2019h).

Why? Among other factors, the increase in affluence over the last century, particularly in industrialised countries, has generated a linear economy and a consumer society at the expense of resource utilisation, the environment and human health.

A case study on vacuum cleaners indicated a 0.79-per-cent contribution of total EU electricity consumption and a 0.21-per-cent contribution of total EU-emitted greenhouse gasses. While energy consumption in the vacuum’s use phase has decreased over time, it still accounts for 71 per cent of a device’s total lifetime energy consumption.

If the lifetime of the vacuum declines over time, greater importance should be placed on optimising the use of raw-materials manufacturing, disposal and recycling of waste, even if energy efficiency and future electricity decarbonisation decreases over time.

In order to shift to a circular economy, whereby a product can retain its functionality through repair or reuse, two key factors must come into play: (a) products across the supply chain such as batteries must eventually be easily recycled and disassembled; (b) consumerism must decline and planned obsolescence needs to be considered when assessing the environmental impact of products and services.

This feature appeared in the February issue of Australian Resources & Investment.

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