Building a critical minerals circular economy: Conceptualising new ways to maximise the potential of extended producer responsibility (EPR)

Abstract

This paper examines the regulatory mechanisms required to advance circular economy solutions amid the escalating crisis in technology critical minerals (TCMs). The paper's analysis focuses on extended producer responsibility (EPR), evaluating its effectiveness in delivering circularity and exploring how it can be adapted to address new materials challenges raised by the technology transition. Spiralling demand for TCMs, vital for green technologies and other digital and defence sectors, has intensified global trade and tariff tensions while also leading to significant negative environmental impacts. Establishing a TCM circular economy is therefore essential to secure these valuable resources and mitigate the risks of the technology revolution. Drawing on EPR and circular economy theory, this research identifies several challenges that limit the power of EPR to achieve TCM circularity. These include the product-specific and recycling-focused orientation of EPR regulation, collective rather than individual producer responsibilities and weak enforcement mechanisms. Building on this analysis, the paper offers specific recommendations to strengthen EPR and harness its full potential in resolving the TCM crisis.

Introduction

In committing to control earth's rising surface temperatures to a maximum of two degrees Celsius, the Paris Agreement advanced global aspirations for tackling climate change and focused efforts on the emission of greenhouse gases. ¹ In response, regions such as the European Union (EU) have set ambitious ‘net-zero’ targets, supported by action plans to transition to green technologies, including electric mobility and renewable energy. ² However, notwithstanding their potential to reduce greenhouse gas emissions in the long term, these technologies come with their own political, human health and environmental costs, many of which can be attributed to the sourcing and processing of technology critical minerals (TCMs) necessary for their manufacture, including lithium, cobalt, graphite, nickel, manganese and rare earths. Rising demand for TCMs, integral to the production of electric vehicle (EV) batteries, wind turbines and other green technologies, has led to significant supply and demand pressure: it is predicted that by 2040, global demand for TCMs in green technologies will be four times higher than the current levels. ³ The shift towards electric mobility, for example, has already led to a tripling in demand since 2018. ⁴

This paper outlines the imperative for circular economy solutions to the impending technology materials crisis threatened by escalating demand, exploring the legal and policy responses needed to mitigate risks. It questions whether current legal frameworks for green technology products do enough to promote sustainable resource use and advance net-zero goals, which are the founding principles of the green energy transition. Specifically, the paper offers a novel analysis of extended producer responsibility (EPR), which is a policy principle, enshrined in many regulatory systems, that aspires to promote sustainable manufacture, use and disposal of polluting product streams. The study examines the achievements and shortfalls of EPR in its ability to deliver circularity goals. It highlights the inadequacies of current EPR frameworks, which tend to focus on particular products, to drive circularity for constituent critical materials that are scattered across different products, many of which fall outside the scope of current EPR rules. While previous studies have examined EPR narrowly as a circular driver for specific products, such as vehicles, batteries and electronics, there has been little by way of a holistic review of whether global EPR frameworks have actually helped to deliver a circular economy. As a result, this paper attempts a more overarching analysis of its achievements within the context of TCMs. It thereafter offers specific recommendations to facilitate sustainable value chains for technology materials contained within multiple products: in particular, to recover the most valuable critical materials vital to modern and future technology. The EU serves as the focal point of this paper's analysis due to its rich history of integrating EPR into product-specific legislation, across a diverse range of material streams. ⁵

Politically, TCMs are vulnerable to supply failures and geopolitical tensions owing to unevenly distributed geological resources, price volatility and global instability. ⁶ Digital, defence and industrial sectors are, simultaneously, competing for many of these same materials, which puts further pressure on supplies. Countries that need to import these resources are especially vulnerable as global competition intensifies. Trade in technology materials is becoming a key national priority and a source of increasing trade tensions and conflicts. The last few years have already witnessed a growing protectionism within world trade, spurred in significant part by the rapidly rising demand for materials for green technologies. ⁷ Trade and tariff uncertainties have significantly reshaped TCM markets throughout 2024 and 2025. In terms of human impacts, the extraction of TCMs has been associated with poor working conditions, including child labour. ⁸ There are also significant environmental justice concerns given that mining operations may often be sited in countries with lower gross domestic product. ⁹ Environmentally, the extraction of TCMs can result in large-scale pollution and environmental contamination. ¹⁰

A circular economy, which encompasses strategies for prevention (including functional replacement and dematerialisation) and life extension (including reuse, recycling and repair), can play a significant part in alleviating the costs of green technology transitions. Better safeguarding of resources through effective circular economy strategies (such as recycling and reuse of technology materials) is a crucial mitigation strategy to reduce new mining while maintaining supplies. This has contributed to rising academic and policy interest in developing circular economy solutions for closing material loops and maximising resource efficiency. ¹¹

This study has been prompted by two key policy priorities of the moment: (i) the rising importance of energy security and energy materials globally, which has come into sharp focus as geopolitical conflicts expose vulnerabilities of nations lacking materials self-sufficiency, and (ii) the EU, stimulated by its Circular Economy Action Plan, is in the midst of reviewing and revising its EPR framework to encourage greater circularity and deliver on increasingly imperative climate change goals. ¹² The analysis thus addresses the following research questions:

Does the EU's EPR framework effectively support a TCM circular economy?

What are the specific challenges for TCM circularity under current EPR mechanisms?

How can the future deployment of EPR be optimised to enable greater TCM circularity?

The second section of this paper outlines TCM trade, demand and key supply challenges. The paper's theoretical framework (see the third and fourth sections), which identifies the Ellen MacArthur Foundation's three aims of the circular economy and Lindhqvist's five forms of EPR, serves as the primary analytical mechanism for evaluating the EU's EPR framework's support for TCM circularity. The Ellen MacArthur Foundation's three aims for the circular economy are: (1) reduce waste and pollution; (2) keep products, components and materials at their highest utility value at all times and, (3) protect the environment. ¹³ Lindhqvist's five forms of EPR are: (1) liability, (2) economic, (3) physical, (4) informative and (5) ownership. ¹⁴

We then use the theoretical frameworks advanced in the third and fourth sections as a tool to analyse specific challenges (see the fifth section). The study finds that the EU's existing EPR framework does not robustly support the advance towards a TCM circular economy and identifies several inherent challenges, including the product-specific design of EPR frameworks, reliance on collective producer responsibility that discourages eco-design, prioritisation of recycling over higher value end-of-life practices and inadequate enforcement. Based on the outcomes of this analysis, the sixth section then offers seven actionable policy recommendations to help unlock the potential of EPR to achieve a system that is genuinely circular and regenerative. This paper is, therefore, of significance not just for academics but also for EU and global policy and regulation.

Critical minerals: importance and challenges

This paper is primarily a call for more robust, circularity-focused regulation and stewardship of TCM resources through stronger EPR frameworks. Before calling for renewed action, it is important to first make the case for why more robust EPR regulation is imperative for addressing green technology challenges. In this section, we outline the strategic significance of TCMs and rising global competition for supplies. For nations that do not have abundant natural geological TCM resources or processing/refining infrastructure, a circular economy is not just environmentally sound, but also critical to energy security, economic advancement and domestic security. This will provide the context for rigorous assessment of current EPR in the EU.

Although TCMs are crucial for green technologies such as EVs, solar panels and wind turbines, their utility expands far beyond this. They are also crucial for multiple sectors such as defence, digital and electronics industries (including laptops and smartphones), which heightens the competition for these materials. Growth in demand undoubtedly brings new opportunities for industry, but as the International Energy Agency (IEA) points out, a combination of volatile price movements, supply chain bottlenecks and geopolitical concerns has created a potent mix of risks for secure energy transitions. Many materials are now deemed critical due to current or anticipated supply threats. This has triggered new policy actions in different jurisdictions to enhance the diversity and reliability of TCM supplies. ¹⁵ The World Economic Forum of 2023 pointed out that metals and minerals could become the new focus of economic warfare in the latter 2020s and noted concerns that some countries have attempted to use their dominance over critical minerals for political leverage. ¹⁶

The 2023 IEA Critical Minerals Markets Review revealed that the market size of key energy transition minerals has doubled over the past 5 years, reaching US$320 billion in 2022. ¹⁷ Many critical minerals experienced broad-based price increases in 2021 and early 2022, particularly for nickel and lithium. This rapid growth contrasts with the modest growth of bulk materials like zinc and lead. As a result, energy transition minerals, which used to be a small segment of the metals market, are now moving to centre-stage in the industry. Although technology evolution and geopolitical pressures can alter these demand scenarios leading to turbulent markets and rapid price swings (e.g. the IEA reported a 30–45% drop in cobalt prices between 2022 and 2024 and a 75% drop in lithium spot prices in 2024 ¹⁸ ), the uptake of green technology and electric mobility continues to rise and will continue to bolster TCM demand for the foreseeable future. ¹⁹

Trade in energy-related critical minerals has increased from US$53 billion to US$378 billion in the past 20 years. Although the average annual growth in trade over the last two decades is around 10%, the last few years have witnessed the most significant increase: growth in trade surged to 37% in 2021, following a COVID-19 slump. ²⁰ From 2017 to 2022, demand from the energy sector led to a threefold increase in demand for lithium, a 70% jump in demand for cobalt and a 40% rise in demand for nickel. ²¹ Electric car sales increased by 60% in 2022, exceeding 10 million units. ²² World Trade Organisation data indicates that in the past 5 years, trade in platinum group metals (PGMs), rare earths and other minerals has almost doubled, reaching a total value of US$219 billion in 2022. Alongside the electric mobility revolution, moves such as recent commitments at the 2023 COP28 Climate Change Conference in Dubai to triple renewable energy production are certain to further accelerate demand for energy-related critical minerals. ²³

Countries are rapidly developing strategies to enhance self-sufficiency in resources. ²⁴ In 2022, for example, the UK launched its first Critical Minerals Strategy, which highlighted that developing domestic resilience in sourcing will be one of the three key pillars of the UK's future TCM supply security. ²⁵ A circular economy is imperative to achieving this self-sufficiency, build resilience, extend materials life and ensure recovery and return of materials to production. ²⁶ Even though circular economy strategies may not be able, in the near future, to supply all of the exponentially rising demand or prevent the need for new mining altogether, they could substantially mitigate the demand for virgin materials. ²⁷

It is this issue to which we now turn: the next section critically explores the circular economy, the conceptual and policy confusion that has characterised circular economy discourse over the last decade, and the need for clearer goals and pathways that will enable better adoption of robust circularity-focused regulation.

What is the circular economy?

Concept and definitions: what do we mean by a circular economy and the need for clear goals and targets

The circular economy has yet to reach its authoritative definitional form, which has contributed to a lack of accepted aims. This lack of consensus has fuelled criticism of the circular economy, with some arguing that definitions are often deliberately vague and ‘approbatory, uncritical, descriptive and deeply normative’. ²⁸ Others suggest that problems associated with moving away from a linear economy are often overlooked and that the circular economy's potential to decouple economic growth from consumption, waste and environmental degradation is often overstated – or as Gregson and others contend, a ‘myth’. This is despite a United Nations Environment Programme report finding that, although not absolute, partial decoupling can be achieved. ²⁹ Without agreement on the definitional form and aims of the circular economy, it has proved particularly hard to measure success, and this has led to the piecemeal adoption of law and policy (see the section ‘Developments in EU policy and legislation’) that may not facilitate a true transition from the current linear economy of take–make–use–throw to an economy that is circular. To aid this paper's substantive analysis, it is thus necessary to frame the circular economy through a brief analysis of its history and its various definitional forms and associated aims.

At the outset, it is necessary to note that the circular economy is not an entirely new concept. Rather, it is a reframing of existing individual schools of thought, including cradle-to-cradle, performance and biomimicry concepts. ³⁰ The performance economy concept seeks to shift business models from product sales to services and thus incentivises companies to focus on, for example, the durability, repairability and reusability of products, whereas the biomimicry concept seeks to ‘mimic’ nature's own strategies to design-out waste and improve resource efficiency. ³¹ It is the cradle-to-cradle concept that has proved particularly important to the development of circular thinking however, given that it seeks to continuously and regeneratively use products, their materials and components to create a waste-free society without reducing a materials quality. ³²

Boulding first outlined the case for a symbiotic relationship between man and the environment in 1966, noting that the world had become pre-occupied with excessive consumption, failing to recognise the dangers of resultant pollution. He theorised that humankind needed to find its ‘place in a cylindrical ecological system capable of continuous reproduction of material form’. ³³ Having observed an open-ended economy with high extraction of materials, consumption, pollution and waste, Pearce and Turner in 1991 noted the unsustainability of such practices on the natural world and took Boulding's work further by proposing the circular economy as a new economic consumption model. ³⁴ This work focused on looped strategies rather than traditional, linear patterns of consumption (‘take–make–use–throw’). This was later supported by Stahel and Reday-Mulvey's research that conceptualised industrial looped strategies as a means of increasing resource efficiency, preventing waste and increasing jobs. ³⁵ Stahel also championed the sustainable ownership of goods by promoting alternative business models. ³⁶ In spite of this history and literature base, there remains little universal agreement on the primary features of a circular economy and policymakers often cherry-pick underpinning principles derived from the aforementioned schools of thought.

Kirchherr and others analysed 114 circular economy definitions in 2017 ³⁷ and based on this analysis, defined the circular economy as:

an economic system that is based on business models which replace the ‘end-of-life’ concept with reducing, alternatively reusing, recycling and recovering materials in production/distribution and consumption processes, thus operating at the micro level (products, companies, consumers), meso level (eco-industrial parks) and macro level (city, region, nation and beyond), with the aim to accomplish sustainable development, which implies creating environmental quality, economic prosperity and social equity, to the benefit of current and future generations. ³⁸

Since Kirchherr's 2017 analysis, we may have moved even further from conceptual clarity, with a further systematic review by the same authors in 2023 now identifying 221 definitions of the circular economy. ³⁹

The Ellen MacArthur Foundation, a well-established authority in circular economy practice founded with the aim of promoting the circular economy on the agenda across business, government and academia, defines the concept as ‘an economy that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility value at all times’. ⁴⁰ Three aims attach to this definition: (1) reduce waste and pollution; (2) keep products, components and materials at their highest utility value at all times and, (3) protect the environment. ⁴¹ It is these aims that we adopt in this paper to assess the EU's EPR framework's support for, and barriers to, a TCM circular economy in the fifth section. Thus, our objective is to contribute not only to advancing circular scholarship but also to its development on an applied level.

The below sub-section attempts to outline some of the key, and unfortunately somewhat piecemeal, developments in EU circular economy policy.

Developments in EU policy and legislation

Despite the lack of clarity on the definition and aims of a circular economy, the EU has advanced numerous ‘circular’ policies over the last few decades to prevent the leakage of valuable materials from its economies. ⁴² This has resulted in a somewhat drawn out history of legislative and policy development, commencing in the late 1980s with the inclusion of an environment title in the Single European Act that posited ‘the prudent and rational utilisation of resources’. ⁴³ This legal basis paved the way for the Europe 2020 Strategy in 2010, which sought to achieve a ‘more resource efficient, greener, and more competitive economy’ by designating ‘resource efficiency’ as one of the seven flagship projects. ⁴⁴ In 2011, the ‘Roadmap to a Resource Efficient Europe’ was released, targeting economic growth that ‘respects resource constraints and planetary boundaries’ by 2050. ⁴⁵ This roadmap sought to encourage sustainable production and consumption through improved product design, longevity and changed consumption habits. ⁴⁶ One of the key aims of this strategy was to double resource productivity relative to consumption by 2030, and as a result, it was accompanied by the ‘circular economy package’ containing a legislative proposal to amend six waste Directives. ⁴⁷

The circuitous nature of circular economy law and policy development came to a head in 2014, with the EU Commission having issued and withdrawn the first Circular Economy Strategy within a space of a year citing a lack of ambition. Though the 2014 Strategy was never likely to result in the transition from a linear to a circular economy, it was nonetheless significant for establishing a firm commitment to do so. ⁴⁸ Since the withdrawal of the first strategy, the EU's circular economy policy has been less volatile, and in 2015 it committed to a new circular economy package, comprising a ‘Circular Economy Action Plan’ which contained 54 actions to ‘close the loop’ in 2015. Though this Action Plan was achieved in 2019, it appears to have resulted in a rather feeble attempt at bringing about the necessary change to fully transition the EU away from its current linear economy and as a result, a ‘New Circular Economy Action Plan’ was adopted in 2020. ⁴⁹ This Plan pays particular attention to the role in which EPR can play in facilitating a circular economy. While EPR is explored in the next section, it is pertinent to note here that the 2020 Action Plan committed to review, or replace, the existing EU EPR legislation. Since then, the EU has adopted a new Batteries Regulation, released proposals for repealing and replacing the End-of-Life Vehicles Directive and Waste Packaging Directive with Regulations, and is currently evaluating the effectiveness of the Waste Electrical and Electronic Equipment (WEEE) Directive. ⁵⁰ In adopting the Batteries Regulation, the Commission commented that it ‘support[s] the shift to a circular economy’ by ensuring ‘batteries have a low carbon footprint, use minimal harmful substances, need less raw materials from non-EU countries, and are collected, reused and recycled to a high degree in Europe’. ⁵¹ One such way in which it seeks to do so is through the introduction of specific recycling targets for a small selection of battery materials, including cobalt, lead, lithium and nickel; this is a point to which we turn back to in the fifth section. ⁵²

What is EPR?

Having examined the theoretical basis of the circular economy, the paper now turns its attention to the framing of EPR, championed by the EU as a circular economy enabler. ⁵³ Conceived by Thomas Lindhqvist in the 1980s, EPR is a principle that seeks to pass responsibility for the entire life cycle of a targeted product to its producers. Aligned with the polluter pays principle, which seeks to assign polluters with financial responsibility for environmental damage, the EPR principle was originally defined as an ‘environmental protection strategy to reach an environmental objective of a decreased total environmental impact from a product, by making the manufacturer of […] product[s] responsible for the entire lifecycle of the product, and especially for the take-back, recycling and final disposal of the product’. ⁵⁴

In characterising the EPR principle, Lindhqvist posited five forms of responsibility, which are used to assess the EU's EPR framework's support for, and barriers to, a TCM circular economy in the sixth section:

Liability, where the producer holds responsibility for ‘proven environmental damages caused by the product in question’;

Economic, where producers ‘cover all or part of the expenses, for example, for the collection, recycling or final disposal of the product [they are] […] manufacturing’;

Physical, where producers hold responsibility for the ‘physical management of the products and/or their effects’;

Informative, where producers ‘supply information on the environmental properties of the products they are manufacturing’ and lastly,

Ownership, where producers ‘retain responsibility for their product and thus be linked to their environmental problems’. ⁵⁵

Contrary to general perceptions, EPR is a principle rather than a policy instrument per se, meaning that it cannot be simply placed on the statute book. Instead, policymakers must adopt one or more policy instruments consistent with EPR, as a guiding principle. This has resulted in EPR often being applied in a disjointed and piecemeal fashion, reflecting the wide array of associated policy instruments. The EPR principle was conceived as an ‘entire life cycle’ approach, but its application unfortunately often focuses too narrowly on a product's end-of-life or post-consumer stage, and as a result, misses vital opportunities to encourage eco-design at the early stages of product design and development. ⁵⁶ The Organisation for Economic Cooperation and Development (OECD) notes that EPR policy instruments ensure that ‘producers [are] responsible for their products at the post-consumer stage of the lifecycle’ and highlights a number of instruments that may be used by regulators to do so, including take-back, economic, standards and industry-based instruments as well as information-based responsibilities. ⁵⁷

Take-back is by far the most common EPR policy instrument, accounting for over three-quarters of enacted instruments. ⁵⁸ It typically requires producers to bear physical and/or financial responsibility for the end-of-life management of targeted products, including collection, treatment, reuse or recycling. Although such a policy instrument may look, on the surface, overly geared towards the end-of-life management of products, it can generate, where applied on an individual basis, an economic incentive for producers to eco-design their products. This is because producers may be able to reduce their expected end-of-life management costs by improving their products’ design for the environment (eco-design). Alongside take-back, economic and market-based incentives make-up a significant proportion, at around 28%, of enacted instruments. ⁵⁹ These instruments range from Deposit Return Schemes (DRS) to virgin material taxes. DRS incentivises consumers to return products at their end-of-life thus supporting take-back, whereas virgin material taxes correct market failures that lead producers to favour virgin, over secondary, materials. ⁶⁰ Other instruments include design standards or regulations to support eco-design, and information-based requirements ensuring that producers carry the responsibility to disseminate information to support scheme goals.

The Ellen MacArthur Foundation notes that the collection, sorting and recycling of products typically costs more to do than the money it makes and as such, EPR is the only proven way to provide funding that is dedicated, ongoing and sufficient. ⁶¹ As highlighted in the second section, the EU has several well-developed EPR frameworks targeting batteries, end-of-life vehicles, WEEE and packaging. Within these frameworks, producers are financially, and to some extent, physically responsible for enhancing the collection, recycling or reuse of products, typically incentivised by targets. ⁶² In all but the WEEE Directive, such responsibilities are currently borne on a collective rather than individual producer basis. ⁶³ As we explore in more detail in the section ‘Collective, rather than individual, producer obligations disincentivise eco-design’ of this paper, the under-utilisation of individual producer responsibility represents a missed opportunity to encourage stronger circularity impacts, such as eco-design, which would extend beyond mere end-of-life increases in collection and recycling. Lindhqvist conceived EPR as a measure to influence the whole life cycle of a product but collective EPR schemes do not help to unlock the full potential of the principle. ⁶⁴ Amendment to the EU's Waste Framework Directive in 2018 attempted to encourage greater eco-design by introducing ‘minimum requirements’ for producers to bear the cost of waste management and that where possible, these are modulated to reflect the products eco-credentials. ⁶⁵ However, even this amendment is arguably somewhat half-hearted, in that it still holds back from mandating individual responsibility. Above that of fee modulation, which merely targets certain design improvements, individual producer responsibility is preferable given that it provides greater eco-design incentives across the entire product design, thus encouraging circularity to a greater degree.

EPR in the EU: enablers and barriers to a TCM circular economy

Earlier in this paper (see the second section), we considered the crucial role of TCMs in facilitating the green energy transition. Having set out the theoretical framing of the circular economy and EPR, in this section our paper critically analyses the EU's EPR framework to identify how it enables as well as impedes a TCM circular economy.

Impact and achievements of EPR so far

As the OECD acknowledges, the EPR principle has seen extensive global implementation. ⁶⁶ The geographic scope of its use continues to grow, as does support from industry stakeholders, highlighted in a 2021 Ellen MacArthur Foundation study of over 100 businesses. ⁶⁷ OECD data indicates that long-standing experience with EPR (up to 30 to 50 years for some products) has resulted in:

improved transparency regarding material and financial flows;

a shift of end-of-life management costs from local governments to producers and consumers, while ensuring dedicated, ongoing and sufficient funding;

increases in the volume of separate collection of waste, where beneficial; and

increases in material recovery (e.g. recycling) rates. ⁶⁸

EPR within the EU has incited increases (albeit modest) in the collection and subsequent recycling of the products they target. Initially implemented in Germany via the 1991 Packaging Ordinance, this policy held producers collectively accountable for recovering and recycling a set percentage of packaging waste. ⁶⁹ Within just a few years, Germany achieved a 1 million tonne reduction in packaging consumption, with 66% of producers optimising at least 50% of their packaging. ⁷⁰ Moreover, in France, EPR has led to a 68% recycling rate for household packaging. ⁷¹ Beyond the EU, EPR has been applied in innovative forms across the world, acting as a mechanism to secure increased recycling rates. EPR initiatives have, for example, led to a 70% increase in recycling rates for packaging materials in South Korea between 2003 and 2017 and a sharing of end-of-life costs for products such as automotives and household appliances in Japan. ⁷²

We explore below potential inadequacies of current EPR frameworks and missed opportunities to shape a robust circular economy, particularly for TCMs. The example of end-of-life vehicles, and particularly PGMs contained in spent automotive catalytic converters, provides useful illustrations of how such inadequacies translate in practice and is therefore returned to throughout the following section.

Barriers to TCM circularity under present EPR schemes

Inconsistent EPR rules and inadequate enforcement systems

Because TCMs are dispersed in varying quantities across a wide range of different products, ranging from small consumer electronics to industrial lithium-ion batteries and wind turbines, their recovery is contingent on a disparate range of regulatory frameworks across many product streams (including packaging, WEEE, end-of-life vehicles and batteries). End-of-life batteries, for example, are governed in the EU by the newly devised Batteries Regulation (formerly the Batteries Directive), whereas vehicles are governed by the end-of-life vehicles Directive. ⁷³ The literature notes that the regulatory structure for EV batteries in particular, straddles two different measures (those applying to end-of-life-vehicles, as well as those applying to batteries) in a somewhat unsatisfactory manner, with contrasting processes of take-back and differing targets under the two Directives. ⁷⁴ Electronic components within vehicles complicate this picture further. If such components remain incorporated within the vehicle at the point it becomes waste, they are regulated under the end-of-life vehicles regime; however, where electronic parts are sold separately or become waste independently of the vehicle (e.g. when removed during repair or as a result of failure), they fall instead under the WEEE regime. ⁷⁵ Thus, EPR frameworks do not always work uniformly or consistently with each other.

For end-of-life vehicles, EPR obligations are imposed through the End-of-Life Vehicles Directive, which sets an 85% reuse and recycling target by weight for the whole vehicle. Producers may be required to provide a network of authorised treatment facilities or make alternative arrangements, offering free take-back for their vehicles. ⁷⁶ In the UK, for example, once the vehicle has been collected and treated, authorised treatment facilities issue a certificate of destruction, which then allows regulatory agencies to deregister the vehicle. Although 1.8 million cars leave the market every year, data suggests a shortfall of 500,000–800,000 certificates of destruction, indicating considerable ‘leakage’ in the system meant to ensure responsible end-of-life management. ⁷⁷ This is compounded by disjointed enforcement practices and unregulated sectors, leading to many of these ‘leaked’ products being exported to low- or middle-income countries with less robust end-of-life management practices. ⁷⁸ As a result, leakage not only contributes to waste, pollution and lower environmental protection, but also results in valuable TCMs escaping from recovery systems and out of circular value chains.

The impact of such regulatory inconsistencies and inadequacies on the recycling of PGMs may help to illustrate the potential benefits of better joined up and enforced EPR frameworks. PGMs (such as platinum, rhodium and/or palladium) are essential to the manufacture of automotive catalytic converters and the automotive sector accounts for over 80% of total palladium and rhodium demand (the likelihood is that this demand will fall as internal combustion engine vehicles are phased out, but will be replaced by demand for fuel cell manufacture in the future). Recycling is increasingly crucial to overall platinum supply. ⁷⁹ As developed economic mine reserves deplete, primary supply has declined at a −0.7% compound annual growth rate since 2015; and recycling accounted for an average of 24% of total platinum supply over the 5 years to 2024. ⁸⁰ Automotive recycling provided 75–84% of total PGM recycling supply, with palladium being the predominant metal. ⁸¹ With the first automotive catalytic converters fitted to cars in the 1970s, significant quantities of ‘in-use’ PGMs have now accumulated and could potentially offer significant support to future supplies when vehicles in current use reach end-of-life. However, as noted by Johnson Matthey, while the technical recyclability of platinum is extremely high once it reaches the refinery, inefficient collection of end-of-life material is a significant problem, with an estimated 30% of platinum in spent catalytic converters currently lost before it can be refined. ⁸² Although enhancing PGM circularity will require the implementation of measures that boost collection rates, end-of-life vehicle ‘leakage’, which contributes to significant quantities of crucial PGMs being lost, could be addressed by a more joined up and better enforced EPR system.

Regulatory framework fragmentation undermines Lindhqvist's ownership responsibility as producers are not consistently linked to their product's environmental impacts, across multiple waste streams. It is unclear whether it is possible, or even desirable for the development of a circular economy, to bring such diverse product streams under a uniform regulatory scheme to facilitate critical materials recovery at the end-of-life. What is clear, however, is that regulatory focus needs to shift away from end-of-life products as an undesirable waste stream to end-of-life products as a value stream for recovering materials that are central to a sustainable future.

Collective, rather than individual, producer obligations disincentivise eco-design

As discussed in the fourth section, one of the main barriers to harnessing the potential eco-design advantages of EPR is that take-back responsibilities are usually not applied on an individual basis. For most product streams (with the exception of the WEEE Directive) they are instead borne on a collective basis, meaning that take-back costs are shared amongst many producers. ⁸³ While being easier to operate, such a system fails to unlock EPR's potential to incentivise eco-design as the producer will not financially benefit from improving the design of their products themselves. For example, a producer who designs their products to be more durable or easier, and thus less costly, to reuse or recycle at their end-of-life will still be attributed the same costs ⁸⁴ as any other producer in the system, even if those producers have not engaged in eco-design themselves. This not only weakens Lindhqvist's ownership responsibility principle, but also undermines fundamental circular economy aims: circularity, we contend, must be embedded right at the start, instead of as an afterthought at the end, of a product's life. Designing products for recyclability is particularly crucial for TCM recovery, as these materials are present in only small quantities and are usually embedded deep within products. High costs of disassembling a poorly designed product can drastically reduce profitability and weaken the business case for recycling. ⁸⁵

The above can be illustrated by returning to the example of spent automotive catalytic converters. Although the recyclability of these converters is generally considered to be high, PGM recovery depends on the ability to efficiently access, remove and treat them once the end-of-life vehicle has been collected. Current catalytic converter designs disperse PGMs in ‘wash-coat’ additives, meaning that they are well-embedded and hard to access. ⁸⁶ As a consequence, recycling processes are both energy intensive and economically costly. ⁸⁷ Where producers are subject to collective responsibility obligations, there is limited incentive for any individual producer to invest at the vehicle design stage in improving, for example, access to catalytic converter PGMs, as they themselves would not benefit from improved recoverability rates; instead, any recoverability improvements would be shared across the collective of producers at likely considerable cost to the individual producer. Individual producer responsibility could either encourage producers to internalise high recycling costs, or, where technically possible, improve their design to enable easier access to, and more efficient recovery of, PGMs.

Despite the WEEE Directive's requirement for producers to finance the end-of-life management of their own product, individual producer responsibility is seldom applied in practice. ⁸⁸ This is because the nature of EPR waste streams do not always easily lend themselves to individual producer responsibility, given diversity in, for example, material make up, length of time in service, collection/treatment practices and inherent challenges with identifying and associating specific product end-of-life management costs with their producers. Nonetheless, to address the lack of eco-design incentive, some legislators have trialled ‘fee modulation’ approaches, where end-of-life management costs are directly associated with some product design elements. Article 8a of the EU Waste Framework Directive establishes ‘minimum requirements’ for EPR application in the Union, and where possible, requires fee modulation to take account of a product's ‘durability, reparability, re-usability and recyclability as well as the presence of hazardous substances’. ⁸⁹ However, even under this system, the link between a product's whole design and its end-of-life management costs remains weak. While Article 8a of the Waste Framework Directive requires Member States to introduce fee modulation, it provides only broad design criteria and no specific methodology for linking whole product design to end-of-life management costs, which has led most national schemes to adopt limited, product-category or weight-based, modulation rather than true individualisation. ⁹⁰

The absence (or, in the case of the WEEE Directive, insufficient implementation) of individual EPR obligations disincentives eco-design and fails to facilitate an economic system that is ‘restorative and regenerative by design’, thus missing a promising opportunity to advance the fundamental goals of the circular economy.

Low targeted rates of collection

EU EPR Directives have incited modest increases in the collection of the products in which they target. For example, the collection of portable batteries, which house a number of critical materials, but are easily disposable in municipal waste streams owing to their size, saw collection rates increased to 48% in 2018, a mere 13% higher than they were in 2008. ⁹¹ Similarly, in spite of relative size and residual value, the collection of WEEE stood at just over 46% in 2021. ⁹² In both cases, however, mandated collection targets of 45% were achieved at the supra-national level. ⁹³ This means that the EU are accepting of the fact that up to 55% of these product groups, each of which contain critical materials, are not collected at the point in which they reach their end-of-life. UK data, for example, shows that an estimated 155,000 tonnes of smaller household electricals such as cables, toasters, kettles and power tools are wrongly thrown in bins each year, while UK homes are thought to hoard a further 527 million unwanted electrical items containing valuable materials such as gold, silver and platinum. ⁹⁴ This pattern is consistent with other waste streams; for example, as seen in the case of PGMs in spent automotive catalysts (see the section ‘Inconsistent EPR rules and inadequate enforcement systems’), approximately 30% of recyclable platinum is currently lost before refinement, owing to inefficient collection. ⁹⁵

Even in spite of the presence of EPR, high rates of uncollected products suggest an inability to elicit high levels of product collection, presumably because (1) current targets are not set high enough, suggesting inadequate application of physical responsibility; (2) end-users are not being sufficiently informed of their disposal responsibilities, suggesting weak application of informative responsibility and, (3) inadequate enforcement, leading to ‘leakage’ (as explored in the section ‘Inconsistent EPR rules and inadequate enforcement systems’). Current collection rates, therefore, do not sufficiently ensure that products are retained at their highest value use, nor do they align with waste and pollution reduction goals.

Narrow focus on recycling targets over higher-order circular economy practices

The EU's EPR rules largely focus on setting recycling targets, while paying relatively little attention to targets for other activities such as repair, remanufacture and reuse which have greater circular economy benefit than recycling. Three of the four existing EU EPR frameworks do contain measures designed to increase reuse, though only two are incentivised via targets. However, in both of these measures, reuse targets are conflated with recycling, which wrongly suggests that they are of equal preference. ⁹⁶ Reuse features above recycling on the waste hierarchy, and should generally be the preferred option over recycling where possible. ⁹⁷ Therefore, although this paper recognises that some recycling is unavoidable, the existing regime inherently, and somewhat perversely, incentivises lower value practices above that of higher ones. This is not only misaligned with the circular economy's aims to retain products at their highest functional value for as long as possible, but also challenges Lindhqvist's liability responsibility, given that producers are not held fully accountable for their products’ environmental damage by prioritising recycling over reuse, and reuse over repair.

Recycling rates have increased for waste streams since the inception of the EU's EPR Directives, owing to recycling mandates that are supported by recycling efficiency targets. ⁹⁸ Although increasing recycling rates are prima facie encouraging, the use of efficiency targets is problematic for the development of a TCM circular economy as targets do not mandate the recycling of the whole product and usually merely require a targeted percentage, according to weight, to be recycled or reused. The use of these targets is particularly troubling given that, as noted above, critical materials are often sited amongst layers of components and bounded by glue and other adhesives, making them hard to access. ⁹⁹

Given the above, and the fact that such targets are based on the total weight of a product, there is little incentive for producers or recyclers to bear the cost or effort needed to recover the relatively small amount of well-embedded TCMs. For example, the End-of-Life Vehicles Directive's target of 85% reuse and recycling by average weight per vehicle, could be easily met by recycling abundant steel and other heavy materials, without needing to engage in the costly recovery of scarce PGMs; ferrous metals (primarily steel) alone account for approximately 70% of an average vehicle's weight. ¹⁰⁰ In other words, end-of-life recycling targets have until now focused primarily on how much is recycled, rather than what is recycled or how valuable the recovered material is. Without strong liability and economic responsibilities, it is in most cases much easier and more profitable for recyclers to focus recovery on heavier, ubiquitous and more accessible, but less valuable, components. Even where recycling takes place, the materials recovered are frequently downcycled instead of being returned to the same or comparable product stream. This means that material may be reintegrated into lower value applications due to quality degradation and impurity. Downcycling is often fuelled by undesirable treatment methods, whereby collected products are routinely shredded prior to being sifted, sorted and recycled. ¹⁰¹ In such instances, critical materials are lost to residual waste streams, which is inconsistent with all three of Ellen MacArthur's circular economy aims. Therefore, at present, the EU's EPR framework is overly geared towards accepting resource loss, even after a product has been successfully collected. ¹⁰² The new EU Batteries Regulation 2023 has finally acknowledged and addressed this gap to a limited extent by requiring specific recycling efficiencies for a small array of materials, including cobalt, copper, lead, lithium and nickel from end-of-life batteries.

Conclusions and recommendations: how EPR frameworks could be strengthened to facilitate a TCM circular economy

While the recovery of TCMs will prove essential to bolstering supplies and mitigating reliance on primary extraction, the EU's EPR framework falls short of eliciting a circular economy for such materials. These inadequacies become particularly evident when, as this article has sought to do, EPR is assessed against the Ellen MacArthur Foundation's circular economy aims and Lindhqvist's theoretical conceptualisation of the principle.

Though the challenges outlined in this paper affect a range of different products, they are likely to have a particularly negative impact on TCM recovery. As we have already highlighted in the rest of this paper, TCMs are highly valuable, but the additional cost and effort needed to recover these very small material streams offer little benefit to producers aiming to meet the overall weight-based recovery and recycling targets that form the basis of the EU's current EPR framework. Currently, there is little incentive for producers to achieve the highest value use for TCMs, when they can meet their targets by merely recovering and recycling lower-value materials, such as plastics and casings.

Compounding the above issues is the fact that the EU's EPR regime, though well-developed, focuses narrowly on some specific product groups. TCMs are, however, scattered across a wide range of different products, from small consumer electronics to acoustic devices, industrial lithium-ion batteries and large fixed installations such as wind turbines. Current systems do not, therefore, offer a cohesive framework for effective materials stewardship and significant quantities of critical materials are at risk of being lost at the end-of-life. This raises the question of whether a product-first, rather than material-first, approach to EPR is most desirable.

In response to the challenges set out in this paper, we now posit seven recommendations that could significantly enhance the power of EPR to grow a circular economy for TCMs:

Incentivising eco-design: As outlined in the third section, the EPR principle was initially conceived of as a comprehensive life-cycle strategy, where producers are accountable for a product's entire lifespan; eco-design of products was therefore conceptualised as a key aim. However, in practice, many existing frameworks primarily approach EPR as a waste management strategy, missing opportunities for promoting better product design. The widespread use of collective producer responsibility dilutes financial incentives between a product's design and the end-of-life management cost to individual producers. This is especially problematic for TCM recovery, owing to the reasons already explained at length in the section ‘Collective, rather than individual, producer obligations disincentivise eco-design’. To address this, we suggest that EPR frameworks should apply on the basis of individual, rather than collective responsibility, such that producers should pay for end-of-life management in proportion to the costs added by their specific product. Technology can be useful in enabling this change and tracking products from production to disposal.

Specific targets for TCMs: While individual producer responsibility could incentivise producers to consider product design, it does not guarantee that design changes will specifically enhance TCM recovery. Current frameworks prioritise whole-product, weight-based efficiency targets, which can lead to dismantlers focusing on more accessible and heavier materials that are cheaper to recycle than embedded TCMs. EPR targets should, we suggest, be directed to incentivise the extraction and recirculation of the most critical materials through specific targets. By way of example, and as mentioned in the third and fifth sections of this paper, the new EU Batteries Regulation 2023 has achieved this, albeit to a limited extent, by introducing material-specific recycling targets and minimum recycled content obligations.

Standards to encourage eco-design: Developing standards for eco-design of TCM products is another powerful pathway for encouraging products that are designed to be circular. Wind turbines, for example, contain vast quantities of TCMs but recovery of these may be impeded by poor design, and standards, whether mandatory or voluntary, can be an effective way to positively influence product features and achieve regulatory compliance. ¹⁰³

Increasing incentives: Though product collection has increased across EU EPR waste streams, rates for smaller or lower-value products remain modest and as a result, market-based incentives, such as DRS which have demonstrated significant potential to induce collection (and thus increase available product stocks for onward circular management), should be further explored; in Germany, for example, DRS has had a positive impact, and the collection of low-valued (economic) waste plastic drinks containers has risen to above 96%. In addition to those detailed below, other incentives include promoting alternative business models, further mandating kerbside collection, and raising consumer awareness.

Better alignment with waste hierarchy goals to encourage higher-order circularity strategies beyond recycling: Targets are a well-established governance measure to steer a transition to a circular economy. However, as discussed in the section ‘Narrow focus on recycling targets over higher-order circular economy practices’, EPR measures for TCM-containing products generally confine themselves to setting collection or recycling targets, with higher value activities such as reuse, repair and remanufacture remaining largely ignored or uncaptured by regulatory targets. ¹⁰⁴ To achieve the circular goal of maintaining products at their highest utility value, frameworks need to be realigned by provisioning amended targets for activities beyond recycling or introducing additional, market-based incentives, such as taxes/subsidies. ¹⁰⁵ EPR governance measures should aim to prioritise more powerful waste prevention strategies such as reuse, repair and repurposing to help products, materials and components remain in use for longer.

Clarity about which TCM products to target through governance, developing decision-making criteria: At present, EU EPR Directives are product-specific and do not focus on how to recover constituent materials of concern. They also contain wide exemptions, which do not help to safeguard the vast array of TCMs in, for example, the WEEE Directive's exempted products, such as wind turbines or medical devices. Some consideration therefore needs to be given to which products should form the focus of regulatory efforts for TCM recovery. Regulators might need to consider, for example, whether it may be more cost-effective to specifically target industrial products, rather than consumer goods, given that industrial products may be easier to track under regulation. Alternatively, such decisions may need to be guided by better cost–benefit data around the overall quantum of TCMs contained within different products, and the cost and technical feasibility of TCM recovery.

Stronger enforcement measures: Monitoring and enforcement systems must be enhanced to achieve better compliance with end-of-life regulations. In particular, greater emphasis should be placed on controlling the export of such product groups. ‘Leakage’, wherein products disappear from the value chain at the end-of-life, is highly problematic for the functioning of EPR schemes, undermining their capacity to promote circularity. Materials lost to illegal export or disposal cannot be reintegrated into a cylindrical consumption model.

In conclusion, this paper has demonstrated that the EU's EPR framework can be characterised by a primary focus on end-of-life management and by a regulatory tendency to view discarded end-of-life products as a burden, rather than as a resource with significant economic and environmental value. This has led to rules that mostly seek to influence processes that products must follow at the end-of-life (e.g. collection, disposal and recycling requirements), rather than on what value may be generated. This is grounded in a fundamentally linear rather than circular approach. ¹⁰⁶ We suggest that a fundamental regulatory reconceptualisation of waste, from the current view of ‘waste as a burden’ to ‘waste as a resource’, may help to deliver a much more effective circular economy and unlock the power of EPR to achieve this.