Achieving European Union strategic autonomy: circularity in critical raw materials value chains

Abstract

Why is it important to understand the potential of circular economy for security? With the green transition in full swing and vulnerabilities in value chains as a consequence of the COVID–19 pandemic and Russian aggression towards Ukraine, this question has never been more timely. Titanium metal constitutes a poignant case, as it is a critical raw material essential for the strategic civil aerospace and defence sectors. In addition, circular economy solutions constitute a viable solution to mitigate import dependencies in the case of this particular raw material. The European Union, with one of the largest aviation industries globally, is dependent on titanium imports from Russia and the United States. The latter, in turn, (re)imports titanium scrap from EU aviation manufacturing to increase material efficiency and reduce costs through recycling. Based on extensive stakeholder interviews across several countries and quantitative trade data, this article presents a first-time analysis of how, in the case of the titanium value chain, circular economy solutions can support the EU Open Strategic Autonomy (OSA) objectives, as enshrined in the 2023 Critical Raw Materials Act. We suggest that in order for the EU to achieve both the OSA and decarbonization objectives, it is essential to prioritize the establishment of recycling facilities as part of reshoring of the mid-value titanium industry. With the prospect of Ukraine becoming an EU member state, this strategy could be complemented by investments into the decarbonization of the upstream value chain in Ukraine while meshing it further with the EU industrial base. We argue that such reshoring could be best achieved through careful intergovernmental and industrial negotiations between the US and EU stakeholders within the formerly established channels for aviation dispute resolutions and within the framework of Ukraine's postwar reconstruction and potential EU accession.