War is chaos. It wreaks havoc on lives and livelihoods, on economies and the environment. This time, the chaos that we’re witnessing in the Middle East is spreading rapidly around the world. The closure of the Strait of Hormuz has had immediate, hard-hitting consequences. The EU’s bill for fossil fuel imports has increased by over EUR 24 billion since the war began. But this is not only about energy. The impact on crucial commodities like fertiliser is being felt by farmers across Europe. Raw materials like naphtha, the backbone of the chemical industry, are in short supply. And I fear there is more chaos to come. The long-term effects on Europe’s economy and green transition, food security, and vital technology like semiconductors are potentially catastrophic.
This is not the first time Europe has been impacted by overexposure to vulnerable supply chains, and overreliance on others. The COVID-19 pandemic, the six-day blockage of the Suez Canal in 2021, and Russia’s invasion of Ukraine all hit European citizens and industries. Recently, we’ve seen the weaponisation of supply chains in an increasingly adversarial world. Last year, China blocked the export of rare earth elements, temporarily forcing European car makers to shut up shop. Although these shocks were largely beyond our control, the consequences were entirely predictable. Each crisis, from real wars and trade wars to a global pandemic, has exposed Europe. And as things stand, we are at the mercy of the next inevitable shock.
There are two clear lessons here for the EU. First, we are still far too dependent on gas, oil, and what oil becomes. Fossil fuels may power our societies right now, but they are weighing us down in geopolitical, economic and environmental terms. We must break this toxic dependency. The cheapest barrel of oil is the one we do not use. And second, we urgently need to reduce our reliance on others and reduce our exposure to fragile supply chains. Transitioning to a circular economy that recovers and reuses critical and strategic materials instead of dumping them would substantially reduce the need for new imports and help to free us from existing supply chain constraints.
The potential is enormous. One metric ton of smartphone components can provide recyclers with the amount of gold and copper typically extracted from 2,000 metric tons of mined rock. In a circular Europe, material recovery from batteries could supply half of the EU’s cobalt demand by 2040. Much of our phosphorus imports, including those from Russia, could be replaced by phosphorus recovered from wastewater. Biogas could meet 10 per cent of Europe’s gas needs, and bionaphtha can compensate for fossil-based shortages. Steps like these are a no-brainer in resource-poor Europe. Less oil and fewer external dependencies mean greater strategic autonomy, heightened economic security, and more competitiveness. So, we need to wring every ounce of value from every tonne of material. This means more efficient production, design, and use, and better industrial symbiosis, where businesses exchange materials, energy, water and waste.
The transformation to a circular Europe is underway, but we’re moving too slowly and too sporadically. Only one per cent of certain rare earth elements is recovered. One per cent of materials from building demolitions is reused. And one per cent of used clothes – many of which have a petrochemical base – is recycled. The EU is working to change this. Later this year a Circular Economy Act will strengthen the single market for secondary raw materials, and a second Biotech Act will build markets for bio-based materials, including by turning waste into energy and fertilisers. Industry also has an incentive to act. From circular plastics to bionaphtha, European industries have significant unused capacities and can scale up production quickly. Choosing circular or bio-based supplies from Europe will make businesses more resilient and less vulnerable to the vagaries of geopolitics or global markets.
Like the crises before it, the conflict in the Middle East has highlighted the weak points in our linear, carbon-intensive system. But it has also shown us, once again, what we need to change. It is time we listened and saw circularity for what it is: an opportunity for prosperity, an investment in our future, and a buffer against the next crisis.