How circularity levers influence secondary supply

A central finding of the scenario results is that high circularity ambition does not necessarily require or equate to higher volumes of recycling or secondary supply. For copper and nickel, increasing circularity ambition can actually reduce the volume of secondary material produced. Under a high decarbonisation pathway, for example, copper's high circularity ambition generates less secondary supply in 2050 than under a low-circularity-ambition level.

The reason becomes clear when examining how circular levers work individually, but also how their effects interact. Narrow and slow both reduce the volume of material flowing through the economy overall, which in turn reduces the volume of recoverable scrap generated. Close works in the opposite direction by increasing the share of that scrap that is captured and recovered. Where recovery systems are immature, close can therefore increase secondary supply substantially because a large share of the available material is currently uncaptured.

For materials with established recovery systems, such as copper and nickel, relatively little additional material remains to be captured. The increase in recovery is then too small to offset the reduction in material throughput produced by narrow and slow.¹⁷⁴ Indicators based primarily on recycling volumes could register this as regression, even though material efficiency and lifetime extension are reducing resource use while delivering the same service.

There is an important distinction between circularity and recycling volume, and highlighting a limitation in how circularity is measured. Strategies that narrow and slow material flows can deliver substantial circular economy benefits without increasing the volume of material recycled. For critical raw materials, policy frameworks have often emphasised recycling and secondary-supply indicators. Such measures may not fully capture the contribution of material efficiency, lifetime extension, reuse, and refurbishment, which can ease supply-demand pressures by reducing or deferring primary-material demand without increasing recycled volumes.^{175 176 177}

Two second-order effects

Circularity levers can also help close projected supply gaps by increasing the availability of secondary materials. This is particularly true for close measures, which can generate more secondary supply than the projected reduction in the supply gap. The extra secondary supply eases shortages and price pressure, allowing demand to be met that would otherwise go unmet. Rather than simply replacing primary extraction, recycled materials can both reduce the need for new mining and make more material available for use, showing that circularity can have positive effects at multiple points of the system. The effect is significant. For lithium, close measures can increase the amount of material available for use by roughly 4–7%, depending on the decarbonisation pathway; for cobalt, the increase can reach around 3%. In other words, greater circularity helps bring actual material use closer to the level needed to meet demand.

At the end-of-life stage, collection and processing capacity do not always keep pace with one another. Higher circularity ambition can increase collection rates and shift more material towards recycling rather than disposal. However, collecting more material does not automatically produce more high-quality secondary material. Functional recycling also depends on market conditions, material scarcity, and the available sorting and processing capacity. If a material is not valuable enough to justify recovery, or if processing capacity cannot keep up with collection, it may be downcycled instead of being functionally recycled. This creates a potential bottleneck: expanding collection faster than processing capacity can divert more material into lower-value uses rather than returning it to the value chain as high-quality secondary supply.¹⁷⁸ Copper illustrates this trade-off. Higher circularity reduces uncollected or disposed material by around 50%, representing a substantial recovery gain. At the same time, downcycled volumes increase by 18–26%, depending on the level of circularity ambition, showing that part of the newly collected material still moves into lower-value recovery pathways rather than becoming functional secondary supply.

When materials remain, but their function is lost

Secondary materials often cascade through several declining purity and functionality levels, meaning that material recovered at one level cannot re-enter applications where a higher level of purity is required. For instance, for lithium, some applications such as ceramics lead to dispersion of the lithium content; for nickel, lower-purity nickel is recovered within iron applications; and for copper, silicon and cobalt, small volumes are concentrated in applications where separation is impractical. In these cases, conventional circularity strategies have limited effect, and may not produce enough secondary supply to replace primary material in high-quality applications. The figure shows that this is the case at every ambition level, highlighting that it is not simply a case of insufficient circularity ambition.

Silicon illustrates this particularly well. Silicon moves through its end uses following a cascading purity hierarchy. Most silicon by mass is used in ferroalloys, where it is recovered when steel is recycled, but recovered as part of the steel rather than as silicon.^{179 180} The silicon atom therefore remains in the economy, but its original function is lost.¹⁸¹ The scenario results demonstrate this: slow has essentially no effect on its primary supply, and narrow is the only lever that substantially has an impact. Even at maximum circularity ambition, silicon's End-of-Life Recycling Rate reaches only around 4% and its Recycling Input Rate remains below 2%, while no second-life stock accumulates under any configuration.