Quotas and incentives

The building in which we’re sitting forms part of it. So does the street outside the door – and the car that’s just driving past. We are surrounded by what’s known as the anthropogenic material stock. It consists of buildings and infrastructures but also everyday goods that contain raw or processed materials. Electrical and electronic equipment and furniture also form a pool of raw materials – albeit on a much smaller scale. Monitoring and recovering raw materials via urban mining eases the pressure on natural resources, the environment and the climate – and ultimately, therefore, on us humans as well. So how can urban mining be taken forward and improved? The Oeko-Institut is researching this question in many of its projects.

For some years now, researchers working on the KartAL – Mapping of the Anthropogenic Stock project on behalf of the German Environment Agency (UBA) have been investigating the anthropogenic material stock and ways to make better use of it. Within the KartAL V project framework, the Oeko-Institut is currently involved in preparing an urban mining strategy with key content and objectives for Germany. “This kind of strategy is needed for multiple reasons,” Dr Johannes Klinge, a Senior Researcher in the Resources and Transport Division, explains. “It is about easing the pressure on the environment and preserving natural resources, as well as reducing our import dependency and avoiding resource shortages. It is also important to safeguard a supply of the raw materials that are urgently needed as we move towards climate neutrality. Rare earths, which are components of many electric motors and wind turbines, are one example.”

The researchers are dealing with a highly complex topic, for it involves a vast range and diversity of substances, materials and products. And when it comes to their lifetimes, too, anthropogenic stocks vary considerably. “It is essential to set priorities in order to create momentum for urban mining in the most relevant sectors. In a first step, we therefore defined the key sectors – in other words, those areas where there is potential to achieve particularly significant reductions in environmental impact or resource dependency.” These include wind energy and photovoltaic systems, electric motors and lithium-ion batteries, as well as mineral building materials in the construction industry, for example. “In addition, we focus on fossil and nuclear power plants and plastics from pipes and sanitation systems, among other things.”

Not enough incentives

During the further course of the project, the researchers are defining targets for urban mining here in Germany, as well as possible instruments. There is a dire need for these, as at present, a substantial share of the raw materials is not recovered when a building is demolished or a car is scrapped. “For example, most of the plastics from vehicles are currently incinerated. In some cases, the copper is melted down along with the steel, which not only means that the copper goes to waste: it also reduces the quality of the secondary steel so that at best, it is only fit for use in construction.” But why? There’s a simple answer: at present, high-quality recycling of these materials is not worthwhile in financial terms. The dismantling and separation that it entails, as well as the purification of the various materials, involve additional effort. Yet it is important to set up recycling systems, especially for the critical raw materials that are needed for the shift in propulsion technology in the transport sector. “Previously, there were no incentives to do so, and no relevant legal provisions. What was also lacking, at the same time, was a stable market for the recycled material; that’s because it always has to compete with the strongly fluctuating prices of primary materials. Why should companies make a commitment here if they are unable to sell the recycled material at break-even prices further down the line?” Pollutants are another issue that can hinder urban mining – at landfill sites, for example, where different materials are all mixed together. “We can’t establish a closed loop if we pursue a zero pollutant strategy. A zero per cent pollutant scenario does not exist anywhere in reality, so sensible limit values must be found. Here, it’s about carefully assessing and weighing up the risks to health and the environmental benefits of recycling,” says Johannes Klinge.

So where do we start? “The first thought is often to introduce a resource tax, thereby pushing up the price of primary raw materials consumption and making recyclates more competitive,” says Johannes Klinge. “But from a legal perspective, that’s difficult to implement in this country.” What’s more, the existing rules at EU level do not deal with individual materials but focus on specific products. For example, there is a Batteries Regulation, which sets targets for recycling efficiency, among other things; a Directive on End-of-Life Vehicles, which defines quotas for recycling; and, at the national level, a Substitute Building Materials Ordinance, which regulates the management of recycled material. “So in order to establish an appropriate legal framework, it is essential to proceed sector by sector, ideally at EU level.”

A precise and nuanced definition of recycling is especially important in this context. “For example, for a long time, many countries classed it as recycling if waste was used for backfilling in the mining industry,” Johannes Klinge explains. “And if the vehicles sector achieves a 95 per cent recycling rate but that only relates to total weight, it doesn’t achieve very much overall. That’s because many valuable materials that have substantial environmental impacts and are associated with high import dependency don’t weigh much – rare earths are one example.”

Setting percentages

How can the use of raw materials from the automotive sector be improved? The Resource-Efficient Motor Vehicles (AutoRess) project, conducted in partnership with the Institute for Energy and Environmental Research (ifeu), Mehlhart Consulting and Team Ewen on behalf of the German Environment Agency (UBA), shows how. Vehicles contain countless resources: iron and steel, aluminium and copper, glass, plastics and textiles, as well as critical raw materials like platinum and cobalt. “In 2020 alone, the European automotive industry used 22.4 million tonnes of primary raw materials and six million tonnes of recyclates,” Dr Johannes Klinge explains.

A key lever in ensuring that raw materials do not go to waste, according to the researchers, is to increase the percentage shares of recyclates used in production – backed by binding rules. In their view, the EU Batteries Regulation, adopted last year, is a major step forward here. “It stipulates clear recovery quotas for the key metals – lithium, copper, cobalt and nickel.” From 2031, requirements for the percentage share of recycled content will be introduced on a stepwise basis, including for lithium-ion batteries. “For cobalt, for example, the figure is 16 per cent from 2031, rising to 26 per cent from 2036.” In the resource expert’s view, the recycling of lithium-ion batteries will become increasingly worthwhile in future. “If electromobility continues to make inroads into the market, the stock of end-of-life batteries will also increase. According to projections, battery manufacturing will account for 25 per cent of global demand for nickel alone by 2030. Recycling of batteries that are used in Europe will continue to be carried out in Europe, as at present. Currently, however, large-scale recycling facilities are mainly located in China, due to the quantities of manufacturing scrap generated there.”

With other metals used in vehicle manufacturing, such as iron, copper and aluminium, no statutory provisions on the use of secondary raw materials are currently in place. “They could be useful here as well,” says Dr Johannes Klinge. “Other approaches are also expedient, such as those put forward in the European Commission’s proposal for a new End-of-Life Vehicles Regulation: it will require manufacturers to provide detailed, user-friendly information on dismantling and recycling and also to make financial contributions towards improved management of end-of-life vehicles.”

Quotas support decoupling

In principle, a requirement for manufacturers to incorporate a specific percentage share of recycled material into new products – a recyclate input quota, in other words – is a valuable tool, according to the Oeko-Institut’s expert. The researchers explain why, with reference to plastics, in a project entitled “Examination of concrete measures to increase the demand for recycled plastics and plastic products containing recycled materials”, conducted in partnership with the Institute for Ecological Economy Research (IÖW) on behalf of the German Environment Agency (UBA). “If these quotas are introduced for specific plastic products, this safeguards demand for recycled material and also decouples the question of how much recyclate is used from the prices of primary plastics. These prices are still so low that recycling is often not economically viable at present.” Recyclate input quotas can also create incentives for recycling companies to build capacity. “Due to the strongly fluctuating prices of primary plastics, there is often a lack of certainty for investment in the recyclates that compete with them. This certainty can be created by introducing a fixed recyclate input quota.”

More informed in future

Urban mining is about making use of the existing anthropogenic stocks – but it is also about investing them more wisely in future. They are, after all, currently growing by around eight hundred million tonnes of materials annually. “For example, a first step is to produce building cadastres, which is what’s happening in Heidelberg right now, so that in future, we know exactly which dormant resources exist and where,” says Dr Johannes Klinge. “This is a sensible approach across all sectors. It may also be worthwhile to set up cassette landfills, for example, so that further down the line, we know exactly what is located where – and also to prevent raw materials from becoming contaminated with pollutants.” Knowing where something is located is only part of the solution, however. Reusing it is a different matter – and far more difficult. “Urban mining is beset with challenges. But if it is done properly, it has the potential to be economically viable in many sectors in future, alongside its social and environmental benefits.”

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Dr Johannes Klinge (formerly Betz) is a chemist in the Resources and Transport Division, where issues relating to resource consumption and recycling management are his main area of research. His work focuses on mining, raw material refining and lithium-ion battery and plastics recycling.