Scarce Resources of Raw Materials

Summary

Driver description
Interactions with the Environment Domain
Interactions within the Social Domain
Interactions with the Economy Domain
Interactions with the Technology Domain
Impacts on Mobility and Transport

Driver description

  • “Non-energy, non-agricultural raw materials can be defined as raw materials that are mainly used in industrial and manufacturing processes, semi-products, products and applications and are not primarily used to generate energy. (...) Furthermore, crude oil and gas can be also considered as raw materials for industrial production.” (Ref: CO_0239)
  • “The key factors driving the demand for raw materials are global economic and population growth and new technological applications. In particular, the growing appetite of the emerging economies for raw materials is seen as major force driving global demand.” (Ref: CO_0239)
  • “Over the past 50 years the world's population has doubled, gross domestic product (GDP) has grown tenfold, and agricultural and industrial production has boomed. This growth and these competing uses have put water resources under ever-increasing strain.” (Ref: CO_0136)
  • “(...) the EU has become the largest net importer of resources in the world, effectively shifting environmental burdens elsewhere.” (Ref: CO_0135)
  • “It is worth noting that the high EU dependence on imported resources is a long-term structural trend. EU27 imports in tonnes increased by 30 % during the period 1999–2008, and the slight decline in 2008 was only due to the global economic crisis.(...) the most dramatic growth was in imports of fuels and lubricants. For the most part, this high dependence on imports is the result of macro-economic restructuring the decline of basic and heavy industries, rising domestic costs of production, the availability of cheaper products from abroad, and the removal of trade barriers.” (Ref: CO_0135)
  • “While EU economies are creating more and more wealth out of the resources they use, total use of material resources continues to increase.” (Ref: CO_0135)
  • “As we move towards a genuinely consumption based, sustainable materials management or a "circular economy", where waste becomes a resource, a more efficient use of minerals and metals will result.” (Ref: CO_0244)
  • “Securing uninterrupted access to resources will become a strategic economic challenge for some critical materials. The methodological problems with measuring the environmental impacts of resource use do not seem to have a ready solution. This is doubly important given that all projections envisage continued growth in global resource use.” (Ref: CO_0135)
  • “(...) due to the gradual exhaustion of high‑quality ore deposits, we are increasingly turning to less concentrated ores the extraction of which causes higher impacts per tonne of processed material.” (Ref: CO_0135)
  • “(...) historic data show that following an economic decline or slow‑down, subsequent periods of growth have tended to be accompanied by an increase in the use of resources and energy (…). Hence, even the current serious economic downturn may well turn out to be just a temporary break in a long-term upwards trend in energy and resource use.” (Ref: CO_0135)
  • “Europe relies on the rest of the world for many resources, such as fuel and raw materials, which are embedded in products imported from outside the EU. Scarcities and volatile commodity prices could bring instability to many regions of the world, so using resources more efficiently is imperative for us all.” (Ref: CO_0243)
  • “Water is a vital resource for human health and an essential input for agriculture, tourism, industry, transport and energy.” (Ref: CO_0244)
  • “By 2030 more than a third of the world's population will be living in river basins that will have to cope with significant water shortages, including many in countries and regions that drive global economic growth. (...) in just 20 years global demand for water will be 40 % higher than it is today, and more than 50 % higher in the most rapidly developing countries. The report estimates that, assuming historic rates of supply expansion and efficiency improvement, it will only be possible to close a fraction of this gap.” (Ref: CO_0136)
  • “Water shortage will become an increasingly serious problem in Southern Europe due to the alarming increase in the drought trend for this area, calling for a number of new strategies (desalinisation of sea water, water transfer between river basins, limitation of irrigation and of the expansion of tourist resorts, changes in agricultural production etc.).” (Ref. CO_1023)
  • “Compared with the global situation, with many regions facing serious water shortages in the coming decades, water stress in Europe may be easier to manage. Based on projections of population, economic development and agricultural production, demand for water in most of Europe is expected to be stable or to decrease. The decrease is expected to be driven by more the efficient use of water by all sectors together with a generally stable population and the projected limited change in the area of irrigated land.” (Ref: CO_0136)
  • "Resource efficiency is thus an important element in efforts to sustain economic development while maintaining natural systems. By itself, however, resource efficiency will not guarantee steady or declining resource use. Growing consumption can mean that resource use increases despite efficiency gains. Indeed, resource efficiency can actually contribute to increased resource use because when a sector becomes more efficient prices may drop, increasing demand and offsetting the efficiency gain (the rebound effect). Even if improved resource‑efficiency results in declining resource use, it may still put excessive demands on the environment.” (Ref: CO_0240)

Interactions within the Environment Domain

Climate change impacts

  • “In addition, future climate change is projected to reduce water availability in many places and further increase the population affected by water scarcity.” (Ref: CO_0136)
  • “Climate change is projected to lead to significant changes in yearly and seasonal water availability across Europe. Water availability will generally increase in northern regions, although summer flows may decrease. Southern and south-eastern regions, which already suffer most from water stress, will be particularly exposed to reductions in water availability and suffer an increase in the frequency and intensity of droughts.” (Ref: CO_0136)

GHG mitigation

  • “Furthermore, transport activities on such a global scale contribute significantly to energy use and GHG emissions.” (Ref: CO_0135)
  • “Improving the efficiency of resources use — a flagship initiative of the Europe 2020 strategy, will not only help to address some of these economic and strategic concerns, but could also be a step towards achieving targets for reducing GHG emissions.“ (Ref: CO_0135)

Pollution levels and emissions standards

  • “Quantifying the environmental impacts of resource use is notoriously difficult, due to the lack of robust methodologies and operational indicators. Tools and methods to measure these impacts are still at an early stage of development.” (Ref: CO_0135)
  • “While the EU has many raw material deposits, their exploration and extraction is hindered by increased competition for land use and the higher costs of safeguarding the environment and human health.” (Ref: CO_0239)
  • “While this reliance on imports may be economically advantageous — or even inevitable for materials that are not available in Europe — it has also led to a shift of environmental burdens abroad, whereby the environmental degradation associated with extraction and manufacture takes place in the producing country.” (Ref: CO_0135)
  • “Environmental damage may be further aggravated by the fact that some exporting countries have lower social and environmental standards than the EU.” (Ref: CO_0135)
  • “Moreover, emissions and wastes emitted during the processing and conversion of resources into goods and services have caused further damage to the natural environment and human health.” (Ref: CO_0137)
  • “High use of natural resources increases pressures on both the source function of ecosystems -for example maintaining the availability of supplies and ensuring sustainable yields - and on their role as sinks - absorbing pollution or neutralising discharges.” (Ref: CO_0135)
  • “Pressures can be expressed in terms of quantities of pollutants discharged, weights or volumes of resource extracted or material consumed, volumes of fish or timber harvested, or, at the most aggregated level, material flows in tonnes. However, converting these pressures, which are sometimes referred to as impact potentials, into environmental impacts is much more challenging.” (Ref: CO_0135)

Interactions with the Social Domain

Urbanisation

  • “Many countries and big cities face water scarcity as a fundamental challenge to economic and social development.” (Ref: CO_0136)

Planning

  • “Land management and land-use planning are essential to the management of water resources in water-scarce areas. Important wetlands, which help to store water, have been drained throughout Europe. One priority should be to retain rainwater where it falls, enabling water infiltration, through the re-establishment of wetlands and increased recharge of aquifers.” (Ref: CO_0136)

Tourist flows

  • “Water scarcity has severe consequences for most sectors, particularly agriculture, tourism, energy, and the provision of drinking water. Activities that depend on high water abstraction and use, such as irrigated agriculture, tourism and the use of cooling water, are affected by changed flow regimes and reduced water availability.” (Ref: CO_0136)

Change of lifestyle and values

  • “In recent decades, changing patterns of resource use have shown that progress on resource efficiency is perfectly possible. Over the last 20 years, recycling has become standard practice for both businesses and households across the EU, with major consequences for industries like paper, glass and resource extraction.” (Ref: CO_0243)
  • “(...) changes in lifestyles and habits, such as the desire for a green lawn during summer, or more baths, jacuzzis and swimming pools, can have the opposite effect and boost household water use. Raising awareness through education, information campaigns and eco-labelling schemes can play a crucial role in changing habits and lifestyles.” (Ref: CO_0136)
  • “(...) policy-makers need to find ways of bringing the proper value of natural resources into consideration in decisions, enabling the improved management of our natural resource base. Learning to value – and to put a price on – ecosystem services and natural resources will ease the pressure on the environment.” (Ref: CO_0243)

Health

  • “Environmental degradation due to over-use of natural resources is likely to lead to serious consequences for human well-being and health.” (Ref: CO_0137)

Interactions with the Economy Domain

GDP trends

  • “The use of materials is intimately connected with economic growth — a 37-year time-series available for the EU15 shows that domestic material consumption (DMC) decreased only during periods of recession or slow economic growth.” (Ref: CO_0135)
  • “All in all, it is generally accepted that there are physical limits to continuing global economic growth based on the current patterns of resource use.” (Ref: CO_0135)
  • “In recent years, the concept of 'double decoupling' has gained prominence in the resource policy debate. A distinction is made between decoupling resource use from economic growth — fewer resources used per unit of GDP — and decoupling resource use from the environmental impacts it causes — lower impacts per unit of quantity. Opinions vary on the relative significance of the two components. Some experts argue that the increase in the quantity of resources used is not the most significant problem because the impacts can be reduced by closing material loops, recycling and recovery or the wider use of end-of-pipe measures. Others believe that the growth in quantities is a problem in itself, given finite amounts of non-renewables and potentially irreversible impacts on ecosytems. Furthermore, there are currently methodological difficulties in measuring decoupling of environmental impacts from quantities of resources used.” (Ref: CO_0135)
  • “Due to the significant time lag in the availability of data on material flows, it is not possible at the time of writing to estimate the decline in Europe's use of resources that may have resulted from the economic crisis.” (Ref: CO_0135)

Regional differences in economics

  • “Demand for natural resources worldwide has increased tremendously over recent decades. The main drivers have been growth in population, wealth and consumption, with high population growth mainly in developing countries and highest levels of wealth and consumption in developed countries.” (Ref: CO_0137)
  • “Consumption of resources is also unbalanced. An average European citizen uses about four times more resources than one in Africa and three times more than one in Asia (...). The EU‑27 uses on average less resources per capita than many industrialised countries — about half that of Australia, Canada and United States, but there are large differences between individual countries within the EU.” (Ref: CO_0135)
  • “The overall consumption of material resources is known only for some countries although Eurostat's MFA[1] indicators have been compiled for quite some time and the OECD has carried out similar work for its member states.” (Ref: CO_0135)
  • “Extraction of resources is distributed unevenly across the world's regions. Of the estimated total of about 58 billion tonnes of materials extracted and used (DEU) in 2005, Asia accounted for 43 %, North America for 19 %, Europe and Latin America for 13 % each, and Australia and Oceania for 3 % (SERI et al., 2009). The total would be almost twice as high if unused overburden were added, that is materials such as mining waste which are extracted to gain access to the resources but which do not enter the economic sphere.” (Ref: CO_0135)
  • “In some countries, extraction of resources may also have negative social impacts due to land appropriations, population displacements and human rights violations.” (Ref: CO_0135)
  • “Unless local, national and global communities come together and dramatically improve the way they consider and manage water, there will be many more hungry people and degraded environments — and economic development itself will be at risk in many countries.” (Ref: CO_0136)

[1] Material Flow Analysis

Market regulations

  • “The increased need for strategic resources may stimulate political monopolisation of access (for example China's moves to secure resources in parts of Africa in recent years), which may complicate access for other purchasers, including the EU.” (Ref: CO_0247)

Foreign trade and globalisation

  • “A significant share of the raw materials and semimanufactured input materials needed for the functioning of European economies is now imported from other parts of the world as, on the whole, activities in heavy industry, extraction (except for construction minerals) and basic metal production have declined in Europe over recent decades.” (Ref: CO_0135)
  • “(...) global trade in materials and commodities is easier than ever.” (Ref: CO_0135)

Intensified competition for scarce resources use

  • “Frequently there are also social impacts of resource use, most often affecting the poor through competition for land, access to water, or forced relocations.” (Ref: CO_0135)
  • “Prices of bulk resources (fossil fuels and a selection of metals such as copper, aluminium, iron, tin, nickel, zinc, lead and uranium) may be seen as reflecting their scarcity. Data show a fairly constant price level throughout the 1990s and an increase in the 2000s disturbed by the 2008–2009 economic crisis (...). This may indicate a continuing availability of these resources at the global level with shocks inducing short-term price increases (IMF, 2010; World Bank, 2009).” (Ref: CO_0274)

Fiscal policy

  • “Water pricing is a key mechanism for achieving the more sustainable use of water in all sectors. It is also fundamental to the WFD[1] requirement that the pricing of water services reflect their full costs. The WFD obliges Member States to implement water-pricing policies that provide adequate incentives to use water resources efficiently.” (Ref: CO_0136)
  • “Water pricing and metering have been highly effective in changing consumer behaviour in many countries.” (Ref: CO_0136)

[1] Water Framework Directive – 2000/60/EC

Interactions with the Technology Domain

Technology development in general and innovation diffusion

  • “Stocks of 14 groups of raw materials are considered 'critical' due to their high economic importance and high supply risk within the next 10 years. The EU has very few reserves of some, such as gallium (used in photovoltaics and microchips), tantalum (used in microelectronic capacitors), germanium (used in fibreglass cables) and neodymium (used in high performance magnets), which are essential for high-tech applications (Fraunhofer and IZT, 2009; EC, 2010).” (Ref: CO_0274)
  • “An EU 2007 study estimates that water efficiency could be improved by nearly 40 % through technological improvements alone” (Ref: CO_0136)

Energy efficiency

  • “Any significant long-term reduction in European resource use will require a sharp increase in resource efficiency in the processing and manufacturing sectors, a shift towards less resource-intensive services, a decrease in the energy intensity of economies, and an increase in the use of renewable resources. While some of these can be achieved through gradual technological improvements, long-term sustainability of our production and consumption may need to be critically reviewed.” (Ref: CO_0135)

Impacts on Mobility and Transport and Transport

Vehicle production may be hampered

  • “The accessibility and affordability of non-energy, non-agricultural raw materials is crucial for ensuring the competitiveness of EU industry. The competitiveness of several European sectors such as electronics, cars, chemicals or construction can be hampered by a limited or more costly supply of certain raw materials.” (Ref: CO_0239)
  • “Production of vehicles and transport infrastructure require large amounts of materials. Such material use accounts for 20–40% of the consumption of major materials: aggregates, cement, steel, and aluminium (OECD, 2000). Moreover, the production of vehicle and transport infrastructure requires large amounts of energy: approximately 20% of the energy consumption during a vehicle’s life cycle.” (Ref: CO_5003)
  • “The automotive industry, as a downstream industry, feels the indirect effects of limited access to raw materials. Due to rising raw material input costs in the steel and non-ferrous metals industry, it faces serious challenges, since cars are complex products consisting largely of steel, non-ferrous metals, as well as polymers, rubber and glass” (Ref: CO_0239)
  • “The industry is also affected by the risk associated with the use of critical raw materials. As a result of the future developments in car- design, the demand for critical raw materials is expected to increase.” (Ref: CO_0239)
  • “Environmental standards and requirements and customer convenience play an especially crucial role here. According to the European Automobile Manufacturers Association (2010), the demand for rare earths and lithium will rise, due to more use of advanced electronics, magnetic materials, new surface treatment systems and alternative propulsion technologies.” (Ref: CO_0239)

Higher prices for vehicles

  • “Rising prices of raw materials may have a significant negative impact on the materials input costs of the sector, so customers are expected to face higher prices for end-products. A study on resource productivity points out that if the prices of more raw materials inputs used in the car production go up, the product price for the final customer would also go up significantly.” (Ref: CO_0239)

Increasing importance of recycled materials and scrap cars

  • “Since cars consist of numerous different parts, the automotive industry is one of the best examples to illustrate how soaring prices for raw material, along with lack of supplies and environmental regulations, have led to more efficiency and more use of non-primary raw materials. Resource-efficient technologies and the use of recyclates and substitutes are the two main strategies the automotive industry is deploying to reduce dependency on raw materials.” (Ref: CO_0239)
  • “The recycling of scrap cars is of key importance, which is adequately regulated by the End-of-Life Vehicle Directive[1].The Directive on Reusability, Recyclability and Recoverability of motor vehicles[2] set new requirements for vehicle recycling. In 2008 total reuse, recovery and recycling rates varied between 79.8-92.9% in the Member States, with Germany having the highest rate in Europe.” (Ref: CO_0239)
  • “A technical approach to finding substitutions is at the core of the automobile manufacturing industry’s R&D agenda. ACEA[3] estimates that the first significant volumes for recycling of electrical vehicles, which contain rare earths, cobalt and lithium, will come around 2025-2030 at the earliest. Demand for these materials is expected to boom around 2015-2020, so the industry hopes to have a new generation of batteries based on other materials by 2025-2030.” (Ref: CO_0239)
  • To meet environmental, safety and price demands, the use of light, smart and innovative materials, such as composites, and the efficient use of high value-added metals will be inevitable in car manufacturing. Research activity focuses on materials such as carbon fibers, natural/glass fibers, high strength steel/aluminum, magnesium technologies, and hybrid materials.” (Ref: CO_0239)

[1] ELV Directive 2000/53/EC

[2] Directive 2005/64/EC

[3] European Automobile Manufacturers’ Association

Delocalization of production by car manufacturers

  • “However, from a general sector perspective, current critical raw materials might be substituted for various raw materials before they can be recycled. Yet the same materials might be in great demand for applications in other industries, which will then definitely require adequate recycling technologies as a valuable option to sustain future access to critical raw materials. As regards organizational strategies responding to raw material challenges, outsourcing of manufacturing cars or car parts can be seen as an option to secure access to raw materials. This concerns not only rare-earths, but also aluminum where China has recently turned from net exporter to net importer. Setting up part of the production in China and South-East Asia may enable access to raw materials at better prices. The European car manufacturers have increased production capacities in these emerging countries, which could enable access to input materials at a lower cost by avoiding export restrictions.” (Ref: CO_0239)