Steinbeis experts support the European Climate Initiative (EUKI)
Developments on an EU and national level regarding sustainability issues are unsettling for companies, who can only ask themselves what will happen next – will we still be able to run our business profitably? How high will carbon levies go in the future? Emerging technology is not the only factor considered the main driver or safeguard when it comes to “clean” economic growth or sustainable development. The future will also increasingly depend on how raw materials are sourced. Steinbeis Entrepreneur and raw materials expert Dr.-Ing. Alexandra Pehlken offers an insight into the European Green Deal and how it affects raw material supply chains.
Alexandra Pehlken from Resource, the Steinbeis Transfer Center, states: “Company supply chains are particularly efficient, secure, and resilient if they meet sustainability criteria (social, economic, ecological) and avoid unnecessary carbon emissions.” Investing more money in this area in the short term pays off in the form of long-term success. Assuming carbon levies will probably rise in the future rather than fall, it would be impossible for companies to ignore emissions – especially when it comes to primary materials from mining, which are energy-intensive enough just to extract and process, and therefore already arrive with a huge backpack of emissions even before being processed into usable products. One measure that should be considered when planning in this area is recycling, since processing secondary (i.e. recycled) materials consumes less energy. One often cited example is secondary aluminum, which only requires 5% of the energy to recycle compared to primary aluminum.  A recent study by the Federation of German Industries (BDI) and Deloitte puts the savings in greenhouse gas emissions that can be made by using circular economy methods at 5.5 million tons of carbon per year. 
Raw material traceability and the EU Green Deal
Examples taken from the German Supply Chain Act  and the SCIP database (substances of concern in articles as such or in complex objects (products) ) confirm that knowing which materials are being used and ensuring they are traceable will be an issue many companies will have to face in the future. Whereas the Supply Chain Act mainly focuses on duty of care obligations, particularly when it comes to human rights violations, the SCIP Database lays down clear expectations regarding quantitative evidence of used raw materials. Since January 5, 2021, companies supplying the EU with products containing substances of particular concern in a concentration of more than 0.1 percent by weight must provide this information. This makes such information available to recycling companies and should ensure greater transparency in product recycling. Time will tell whether this process really works.
The developments in the EU show very clearly that production must adapt. Achieving climate and environmental goals in line with the Green Deal requires new industry policies based on the circular economy. Recycling will become increasingly important, because the priority now lies in the value offered by raw materials and no longer in how waste is dealt with. According to EU criticality assessments, many materials found in products are already considered “critical raw materials” due to their importance to the economy and the risks involved in sourcing them. Some are classified as “conflict minerals” due to severe human rights violations or issues related to international humanitarian law due to the way they are extracted and traded. The European Commission has already placed an action plan on the agenda for critical raw materials, which has been published on an information portal called the raw material information system (RMIS) . This plan places particular emphasis on returning raw materials to production. “Using secondary materials offers companies significant benefits because they’re rarely used as political footballs. This is because we have too much waste,” explains Pehlken. Meaningful collaboration between producers and recyclers – starting with product design – results in secondary materials of a better quality, reductions in emissions, shorter journeys, and ultimately more efficiency along the entire process chain. This is not just about sustainability factors, it also affects company image and employee loyalty.
The experts at Resource, the Steinbeis Transfer Center, are advising and helping companies not only to plan sustainability strategies, but also to determine internal material flows in the short and medium term and pinpoint the potential to cut carbon emissions. They also conduct risk assessments on existing supply chains and associated materials.
A closer look at sustainable supply chains and material production
- EU RMIS (raw materials information system): https://rmis.jrc.ec.europa.eu
- The German Mineral Resources Agency (DERA): https://www.deutsche-rohstoffagentur.de
- The EU Green Deal: https://ec.europa.eu/info/strategy/priorities-2019-2024/europeangreen-deal_de
- EU Criticality Assessment: https://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_en
- Conflict minerals: https://ec.europa.eu/trade/policy/in-focus/conflict-minerals-regulation/regulation-explained/index_de.htm