Permanent magnets based on rare earth elements are indispensable for electric mobility, wind energy, and key industrial technologies. Yet Europe remains almost entirely reliant on imports from China. This strategic dependence entails significant risks: export restrictions, geopolitical tensions, and price volatility threaten supply security and with it, the competitiveness of entire industries. In response to these challenges, Circular Republic, in collaboration with Porsche Consulting, has written a white paper that presents tangible solutions for companies to prepare for the future.
The environmental and social impacts of global raw material extraction are equally severe, ranging from toxic waste to human rights violations. The circular economy offers new approaches for managing finite resources more sustainably. By recycling rare earth-based magnets, existing material streams can be recovered and dependence on primary raw materials reduced. Innovative methods such as Urban Mining and Design for Circularity enable efficient recovery of magnet materials from end-of-life products and their reintegration into the economic cycle. This not only reduces CO₂ emissions by up to 95 percent, but also mitigates the risks of geopolitical crises.
Europe’s magnet recycling industry is still in its early stages. Pilot projects demonstrate that through industrial collaboration and technological innovation, up to 30 percent of future demand could be met. However, scaling is essential as current recycling rates remain below one percent. Companies must play an active role by securing demand through offtake agreements and joint procurement, thereby enabling investment in recycling infrastructure. The EU’s Critical Raw Materials Act sets ambitious targets. But without targeted incentives, streamlined permitting, and binding quotas for recycled materials, its impact will remain limited. Only close cooperation between industry and policymakers can establish a resilient and sustainable supply chain for rare earths.
The circular economy is therefore far more than a crisis response. It forms the foundation for Europe’s green transformation and industrial sovereignty. Those who invest in recycling and collaboration today will secure their competitiveness, sustainability, and independence tomorrow.
The full paper outlines how companies can put these strategies into practice.