ETC CE Report 2024/3 Environmental Impact of Material Supply Chain Disruptions

01 Feb 2024

Adrien Specker, Robin Gilli, Emanuele di Francesco, Shahrzad Manoochehri, Roberto Zoboli, Giovanni Marin, Simone Tagliapietra, Peder Jensen, Beatriz Vidal Legaz

This report addresses the European Union's susceptibility to critical raw materials (CRMs) supply chain disruptions, emphasizing the often-neglected environmental implications. Triggered by recent geopolitical events, including Russia’s war in Ukraine, and governed by the 2023 Critical Raw Materials Act, the report explores the potential environmental consequences of such disruptions. It introduces an analytical framework applied to case studies on nickel and rare earth elements (REEs), focusing on short, medium, and long-term scenarios. The findings show that a shift of supply from Canada to China and the USA in the short term could notably reduce environmental impacts. In the medium term, recycling (with a prerequisite for renewable solutions) emerges as an eco-friendly alternative. Long-term strategies, such as fostering domestic mining and refining in Europe, also promise reduced environmental impacts. While the assessment is viewed from the perspective of EU consumption, the report highlights the complexity of global impacts, emphasizing the need for comprehensive assessments and life cycle studies to inform environmentally conscious policy-making processes.