Find out about the critical role that the circular economy can play in the shift to renewable energy, pairing the EU’s decarbonisation agenda with economic competitiveness and material security.
Find out about the critical role that the circular economy can play in the shift to renewable energy, pairing the EU’s decarbonisation agenda with economic competitiveness and material security.
In this episode, host Seb hears from Ke Wang from the World Resources Institute (WRI) about:
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[01:00:00.560] - Seb Egerton-Read
From environmental harm to international conflict, there's a risk that the renewable energy transition could cause more problems than it solves. On today's show, I'm joined by Ke Wang from the World Resources Institute to talk about how we stop that happening and in fact the role of the circular economy in ensuring this is an economic opportunity. This is the Circular Economy show and I'm your host, Seb. Thank you so much for joining us on the circular Economy show. I actually wanted to start by asking how did you get into the circular economy? What's your kind of circular economy origin story, as it were?
[01:00:40.150] - Ke Wang
Yeah, thank you for having me here. I actually started working on a circular economy almost 10 years ago and before that I was a physicist, so had nothing to do with environmental circularity. And actually why did I make such a sharp turn in my career? Actually I got largely inspired by what Ellen MacArthur foundation was doing. I was fascinated by the idea that we could potentially have an environmental and economic win win. So I really changed my career path. And yeah, since then I've worked on a wide range of topics in circularity and the recent two years focusing on critical minerals. But EMF always have a special place in my heart. So really happy to be on the show.
[01:01:27.470] - Seb Egerton-Read
I'm very glad to hear that. And, and I guess that brings us to the topic of this episode, which is what is it about the topic of critical raw materials, minerals, I guess that links very close to energy transition. What's the connection there to circular economy? Why is circular economy so important?
[01:01:45.710] - Ke Wang
Right. So I guess we all know that in order to reach the climate goals, important part is transition to cleaner. And although the clean energy transition reduces our dependence on fossil fuel, but it does need a lot of minerals because all the technologies, whether it's electric vehicles or solar panels, wind turbines, grid, they're all very mineral intensive. So we all know that EVs tend to be heavier than conventional cars. That's because it requires a large battery. On average, EV requires six times more minerals than a conventional car. And the International Energy Agency has forecasted that to meet the climate goals, we'll need four to six times more minerals by 2040. So that's a huge increase.
[01:02:40.550] - Seb Egerton-Read
Is that just because of the batteries? Sorry to interrupt. Is that just the batteries because they're so material intensive, or is there a kind of wider set of material needs that come with that infrastructure?
[01:02:52.380] - Ke Wang
It's wider batteries from EV is a major driver, but also solar panels, wind turbines and the grid. So all the transmission network, they all need a lot of minerals.
[01:03:08.460] - Seb Egerton-Read
I'M sorry, I interrupt you. And you were basically saying there's a lot of material needs that come from this energy transition that's happening.
[01:03:16.950] - Ke Wang
Indeed, indeed. And it's not only the energy transition itself. Many other sectors, the society, also need digitisation, need a lot of minerals, building environment, building houses, infrastructure, need a lot. And the newly emerging defence industry will also need a lot of metals and minerals. So, yeah, clean energy is one of the drivers, but not the only driver.
[01:03:39.510] - Seb Egerton-Read
And I guess one option there is, I mean, where that almost, I'm going to say one option is not really an option, but the risk of that is it takes us to a place of simply extracting those materials out of the ground at massive, massive scales, many of them being finite. The cost effects of that. When we, when we've talked about this topic before, we've talked about it being really fundamentally driven by the economics. Like this is an area where, yes, there's an environmental case for better designing or thinking about how these materials are recaptured and remanufactured and recycled and so on. There's also really a very clear economic case. I wonder if you could say what makes the economic case for using circular economy models, designs, thinking in this sector specifically or this collection of sectors specifically?
[01:04:27.340] - Ke Wang
Sure. Maybe if I can first respond to something you said in your question. You said it's finite. I think that's a very natural reaction. Right. People will be wondering, do we have enough? And actually, we do have enough. There's enough of these mineral resources under the earth's crust, both on land and in ocean. So actually, finite supply is not a major concern. And you might say, okay, what are the major concerns then is one is because we'll need new mining. We do need new mining. Even if we're perfectly circular, we still need more new mines. And mining is known to have a long history of causing environmental and social harms at the local level. So while we try to solve the climate challenge globally, are we going to actually do more harm at the local level? That is one concern. The other concern is conflict, because natural resources have always been a major cause of human conflicts. We've seen that in oil and gas, water, etc. And now mineral supply is seen as a national security issue, not just for energy, but also for defence, for digitisation. So countries are worried whether they can secure enough supply for themselves.
[01:05:43.350] - Ke Wang
So there's really a risk that intensifies geopolitical tension and the conflict. So that the concern or the challenge is, can we meet the world's need for all these minerals Both in time and in ways that's protecting people in nature. So that's a big challenge. And I'll come to your main question about what is circularity's role in it, especially from economic sense, is that circularity can help manage demand. Right. That's the principle of circularity, is that we can meet all these demand while reducing the dependency on virgin materials, on mining. So that of course has its environmental benefits, less new mining, less pollution, less forest loss, etc. And it also has the economic, this kind of security concern. Right. So for countries, especially countries that does not have a lot of mineral resources themselves, secularity can provide a source of supply which can help with security, with supply resilience. That is very high on the political agenda nowadays.
[01:06:51.660] - Seb Egerton-Read
And I think we can come back to some of the. Well, an example of where that shift's really pervasive right now in the EU. But I wonder if we could just dwell for a moment on kind of an example of what that looks like. I know you've done quite a bit of work on recycled copper for instance. So how does this kind of circle economy opportunity actually get realized across the kind of EVs or electrification or digitization or energy transition space? What does it actually look like for a material or specific product?
[01:07:24.330] - Ke Wang
Yeah, so we can apply the circular economy framework to energy, to EV for example. Then all these different Rs at a reduced level, you can think about smaller EVs. EVs are getting bigger and bigger. Bigger EVs need a bigger battery and more minerals. So by reducing or right siding of EV then that can reduce global demand for minerals. You can think about reuse. When batteries retire from EV they are still, they still have capacity. This have 70% of capacity left in them. So instead of treating them as waste, they could get a second life as storage batteries connecting to solar panel for example, and then recycle. That's something everybody agrees that battery recycling will be, will be critical. So then, you know, we are indeed looking to copper recycling. You might ask why it sounds old fashioned is because we really think copper is a sweet spot where circulate circularity can demonstrate and deliver short term benefits for the critical minerals challenge. And why is that? First of all is because the demand trend is robust. Right. Copper, we currently produce and use about 25 million tons a year and it's forecasted to grow to 40 million tons by 2050, which is a huge growth.
[01:08:56.750] - Ke Wang
And that's because copper is needed by all the clean energy technologies I mentioned, whether it's EV, Solar Panel, wind turbine, grid, they all need a lot of copper and it's also needed by other sectors. Right. Building environment or electronics. So the demand is robust and it's harder to substitute. That's why both Europe and the US as well as many other countries have listed copper as a strategic material because, you know, it's important for the economy.
[01:09:30.680] - Seb Egerton-Read
We've always needed copper and we always will need it, but it sounds.
[01:09:33.870] - Ke Wang
We have. Right. It has been thousands of years. Right. So coming to. Yeah. So humans have been mining copper for thousands of years and so the easy ones are gone already. Right. We do have more copper underground, but the all grade. So the concentration of copper in these rocks are so low, it's often well below 1%. So new mines are possible, but the economic viability is reducing and also produce a lot of waste because of concentration so low. So ramping up the primary supply is possible, but it's challenging also. Then the third reason is because copper is already abundant in today's waste stream. When people talk about battery recycling, they tend to say, yes, it's important, but it's going to be important in 10 years from now because we don't have much waste batteries yet.
[01:10:31.670] - Seb Egerton-Read
They're just being installed.
[01:10:33.650] - Ke Wang
Yeah, they're just being. Right. But for copper, we do have lots of them. We have lots of them from all kinds of waste, whether it's electronics or building materials or vehicles. We, we have loads of that already. So the opportunity, the opportunity is already today and there are modeling results saying, okay, if we do increase a global copper recycling rate, we can get 6 million tons more every year from landfills. Right. So it's a lot of avoided mining, avoided waste, avoided water usage.
[01:11:09.280] - Seb Egerton-Read
So copper is an example of a material flow where there's an opportunity today, as you just described, and really good reasons for that. What you also mentioned earlier was some of the political and security issues related to critical raw materials. And even if someone's keeping it like a kind of cursory, like glance at the news now, they'll be somewhat aware of the things that are being talked about in that space. Perhaps one example that received less like mainstream media attention, but is really interesting is the European Commission's clean industrial deal, where decarbonisation, competitiveness and indeed increasing circular material use were all put at the heart of, are now very much at the heart of the European Commission strategy. And I wonder if you could say a little bit about that as an evolution of previous circular economy acts. What does that say about the direction of travel for circular economy and in particular in the European Union context.
[01:12:05.070] - Ke Wang
Yeah, indeed. I think that that is a illustration of, you know, how circularity in the critical minerals topic has gone beyond environmental concern. Right. It is really a political and economic concern. It is shown by, as you said, EU's newly released Clean Industry act as well as the Critical Raw Material act that was approved last year. They are both led by DG Grow. Right. So for people not so familiar with the EU jargons, DG Grow is equivalent to Ministry of Industry or Ministry of Economic Affairs. Right. While compared to conventionally, circular economy is usually led by the Ministry of Environment or DG Environment. And it tend to show up in environmental legislations, but this time that means it's getting a broader supporter base in the government, which is always good. So I think both environmental motivations and economic motivations are important. The more motivation there is to go circular, the better because there are more.
[01:13:23.670] - Seb Egerton-Read
More supporters and the more those things, I guess, overlap, the more, you know, the more, again, the more prioritisation, the more reasons, the more energy momentum.
[01:13:33.310] - Ke Wang
Yeah, indeed. I think, I think like, you know, NGOs, as NGOs, sometimes we tend to get caught up on our motivation. Right. Like sometimes people will say, oh, but they are what they're wanting circular economy for the wrong reason. I personally think we don't need to align all motivations and beliefs if we all want the same thing to happen. That's good. Right. It's just like eating more vegetables. Some people may do that for animal welfare, some people may do that for climate change, and others do that for personal health reasons. They're all good as long as the net result is we're eating more vegetables and less meat.
[01:14:12.640] - Seb Egerton-Read
And what does it tangibly. I know there's a degree of forecasting that I'm asking you to do in this answer because you can only speculate to some degree. What do you think that tangent, that circular economy being at such, being at the heart of such a kind of implementation act, if you like, because of the scale of it and the scope of it and the impact it can have. What does that mean in projecting forward for the circular economy? And in particular, what are some of the things that might happen as a result of that act being in place?
[01:14:46.060] - Ke Wang
Yeah, I think as a result recycling industry will get a boost because like every country sees recycling as a integral part to secure this mineral supply. Right. So we see both US and EU are really having supportive incentives to grow domestic recycling capacity, which is good because much of the legislation framework or the ecosystem, the infrastructure can Benefit other sectors as well. Right. So if we start with metals, start with battery minerals, then we'll build the ecosystem which will help us to be more ready when the solar panels come to end of life, when the batteries come to end of life, but also benefiting electronics and just circularity more broadly. So I think that's good news. The higher R strategies, so the reduce and reuse tend to be always a bit harder than recycle. Right. So that's also what where we see in policy support there's a lot more focus and consensus on recycling, but the other reduce and reuse realm is still less touched. And I guess that there's untapped potential. Yeah.
[01:16:14.470] - Seb Egerton-Read
And there's a natural journey there as well that both governments and in the world of private sector businesses go on of starting with, you know, circle economy at one stage, as you just described, was really locked in a kind of waste management bubble, even within policy making. So the fact that it's, even if it is through the lens of, you know, heavy focus on recycling is in this kind of economic competitiveness, part of policymaking. It's a really helpful and step forward and platform to explore some of those further opportunities.
[01:16:46.800] - Ke Wang
Yeah, there are some of the classic kind of trade offs in the circular economy world, which is probably very familiar to your, to your audience, is that there's also trade off between recycling and reuse. Right. We've seen it happen in other sectors when there's too much focus on increasing recycling, it's cannibalizing what could be reused. So, you know, still perfectly functional products will get pushed into recycling if we're only pursuing a high recycling rate. So that's, that's a balance that needs to be maintained.
[01:17:24.770] - Seb Egerton-Read
Lots more work for you to do than I guess as a, as a, as a result of that. Thank you so much for joining us on the podcast today and I'm sure we'll speak to you again soon.
[01:17:35.210] - Ke Wang
Thank you for having me.
[01:17:37.160] - Seb Egerton-Read
So the Clean Industrial act places circular economy at the heart of the European Union's competitiveness and decarbonisation agenda. And we've heard that many of these opportunities can be realized today, as with the example of copper. With global crises from security to economic to environmental in full swing, it really is critical that we tackle this issue now. Thanks for listening to the circular economy show. You know the drill, subscribe, rate and review and we'll see you next time.