Circularity of critical metals in the energy transition: What we can learn from platinum group metals

The energy transition is the most important lever to decrease greenhouse gas (GHG) emissions, and 75% of energy GHG reductions will come from the scaleup of renewable technologies, such as solar, wind and electric vehicles (EVs) – all of which rely on critical metals.

The exploding demand for these metals is expected to result in undersupply, threatening the realization of the energy transition. Despite their scarcity, the recycling rate for many critical metals is below 5%, with total recycled metals in batteries currently around 1%, and recycling rate of certain rare earths even below 1%.

In contrast, the platinum group metals (PGMs) have been in industrial use globally for decades, and their value has incentivized recycling. Today, the PGMs benefit from a mature recycling network and substantial recycling capacity around the world.

So, what can the experience gained in the platinum group metals industry tell us about how best to accomplish circularity in critical metals for the energy transition?

Efficient recycling requires a degree of specialisation coupled to scale. The complexity of processing PGMs means recycling is typically undertaken by specialist secondary PGM refiners that serve a global market from large, centralized operations.

To some extent, each of these global PGM refiners has optimized different capabilities and targets different forms of end-of-life material. As a result, global PGM recycling functions far more optimally than it would if numerous individual companies were to undertake all the necessary processing within domestic boundaries.

Such a situation would require recycling facilities to handle small quantities of a much wider variety of end-of-life material, which is likely to be both less efficient and more costly. But the global PGM refiners also compete for end-of-life material, creating greater customer choice and more resilience in PGM recycling as a whole.

Specialism, scale and competition are all facilitated by the fact that PGM-containing end-of-life material can be shipped from one region to another for processing. While there are some exceptions – China, for example, is a closed recycling market – for much of the world, platinum group metal (PGM) recycling takes place within a global network.

So, while there is a strong domestic focus in critical materials regulation and waste shipments are highly regulated under the Basel Convention, care should be taken to avoid mandating a ‘closed’ circular economy. International partnerships that seek to create an open circular economy would replicate (and preserve) the successes already seen in the PGM industry.

PGMs are routinely recycled in two ways, termed the ‘open loop’ and the ‘closed loop’. The open loop sees recycled metal returned to the market, whereas the closed loop returns metal to the original owner.

Both loops work well and are a fundamental part of the functioning of the PGM market. Typically, however, losses in the closed loop are lower than those in the open loop. This reflects more efficient collection practices, partly due to less dispersal (or better tracking) of PGM-containing material during use, and partly because the metal owner is aiming to maximize retained value.

Recycling consists of collection and processing, and both aspects require attention. Specialized PGM recyclers routinely innovate and optimize their processes to minimize losses and adapt to new forms of end-of-life material. What they can’t do is process material they don’t receive, and this is where the open loop can present a challenge.

Iridium spark plug tips are an example where recycling rates are low, even though processing of this end-of-life material is relatively straightforward. This situation has arisen because the value of iridium per individual plug (and per vehicle) is so small, while removal is labour-intensive.

But these small quantities add up to significant quantities of iridium being lost to landfill every year. This may need to be addressed through tailored policy that specifically addresses collection of iridium end-of-life material.

Consideration should then be given to whether it makes sense to mandate the reuse of this iridium within the same application. i.e. spark plug ignition tips. This risks further disincentivizing collection of iridium that could otherwise be sold for profit on the market and prevents recycled metal from finding its ‘natural’ home – which in future could be the growing market of electrolysis to produce renewable hydrogen, rather than spark-ignition engines.

In the closed loop, metal ownership is retained for true circularity. This means that end-of-life material may be imported for processing by the secondary refiner on behalf of the metal owner; the importer of record may not own or be purchasing the material.

Trade and taxation policy should be adapted where necessary to facilitate recycling as a service within an open circular economy.

Platinum group metals occur in mineable quantities in a very few locations globally. But they have been in use for decades, meaning that significant quantities now sit aboveground in forms that remain recyclable.

For policy-makers aiming to diversify their supply of PGMs and reduce import dependencies, they should first ensure the benefit of the ‘urban mine’ is maximized by minimizing collection losses, before pursuing additional extraction.

Today, open-loop PGM recycling already diversifies PGM supplies in the US, Europe, Japan and elsewhere. But this could be missed by an approach to critical metals that treats ‘recycling’ as a distinct metric from ‘supply’. Accounting for recycled metal in the right way is an important aspect of enabling a circular economy.

Though overarching principles apply for all metals, there are complexities here for policy-makers to grapple with. Even within PGMs, experience suggests that individual metals, individual technologies and individual regions may require tailored approaches to maximize circularity.

But if something has been done once, it can be done again. The success in PGM recycling has been market-driven, but it can be replicated for other critical metals through appropriate policy measures to support the growth of an open circular economy.