Are the pieces in place for circular rare-earth value chains?

Europe needs to strengthen its supply of rare earth elements (REEs), which are essential for permanent magnets used in EVs, wind turbines, industrial motors and many other technologies. Yet Europe remains heavily dependent on imported REEs and permanent magnets, particularly from China, as demand continues to grow. 

Recycling cannot replace primary supply, but it can provide an additional European source of REEs and reduce dependence on external supply chains. This makes REE recycling not only a circular-economy issue, but also an industrial-policy and competitiveness issue. This is also why the topic is relevant for CLIC Innovation: through our participation in the REMHub consortium, we contribute to efforts to build more resilient and circular European REE value chains.

CLIC Innovation welcomes the Commission’s initiative to refine the future architecture of European Partnerships. CLIC is a Finnish open innovation cluster facilitating industry-driven RDI collaboration in bioeconomy, circular economy and sustainable energy systems. Through our involvement in institutionalised, co-programmed and co-funded partnerships, we offer a cross-partnership perspective rather than the view of any single partnership.

Recycling needs the whole value chain

A European REE recycling industry cannot be built by recycling plants alone. The entire value chain needs to function, from product design and information to collection, identification and dismantling, through pre-processing, REE recovery, refining and alloy production, and ultimately magnet manufacturing and end use. 

EVs provide a good example. A permanent magnet in an e-motor first needs to be identified and removed from the vehicle. It then needs to reach an appropriate recycling process, the recovered REEs need to be refined and converted into suitable materials, and those materials ultimately need a market. If any link is missing, valuable material can be lost and recycling can become economically unattractive.

Regulation is connecting the chain

This is where an important shift is taking place: EU regulation is increasingly putting the pieces in place for circular critical-raw-material value chains by addressing multiple links in the chain, not just waste management. 

Product design and information are among the first pieces. The Ecodesign for Sustainable Products Regulation (ESPR, EU 2024/1781) establishes a framework for requirements covering durability, repairability, reusability, recyclability and material recovery. It also establishes the Digital Product Passport, creating a framework for sharing relevant product information across the value chain, including with recyclers. 

For permanent magnets, the Critical Raw Materials Act (CRMA, EU 2024/1252) goes further. For e-motors and EVs, it requires information on the presence and type of permanent magnets. A linked data carrier will provide further information to support their identification and removal. For e-motors, this can determine whether magnets become secondary raw materials or are lost in waste streams. 

The new End-of-Life (EoL) Vehicles Regulation (EU 2026/1738) connects product information to actual EoL treatment. For relevant e-motors, permanent magnet materials containing REEs are to be removed where technically feasible without excessive cost. Where recycling technology is not yet sufficiently developed, the relevant motors or components can be stockpiled for future recycling. 

The Waste Shipments Regulation (EU 2024/1157) addresses another piece of the puzzle: where waste can move. From May 2027, exports of non-hazardous waste for recovery to non-OECD countries will generally be prohibited unless the destination country and receiving facilities meet EU requirements. The regulation also strengthens the traceability and control of waste shipments within the EU. 

Taken together, these recent measures point to an important shift: the EU is increasingly moving from regulating waste towards creating the conditions for circular critical-raw-material value chains, from product design and information to collection, dismantling, recycling and the movement of secondary materials.

Is the puzzle complete?

Not yet. But the picture is emerging. If the pieces come together, REE recycling can become more than waste management: it can become a strategic source of raw materials for Europe. 

CLIC Innovation leads the development of the REMHub innovation hub and the project’s communication, dissemination and market shaping activities, helping build a collaborative ecosystem for Europe’s rare earth and permanent magnet value chain. Piia Moilanen, development manager at CLIC Innovation, is contributing to REMHub especially through stakeholder engagement, project coordination support and KPI monitoring.
https://remhub-project.eu/

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