Ep 207: The critical minerals crunch: How do we secure the future of clean energy?

[00:00:00.000] - Wen-Yu Weng If something can make us profit and do good, wouldn't we have done that already? From a material perspective, it's not that you just give up on fossil fuels, or you use less fossil fuels. There are other trade-offs. While you're using less fossil fuels, you're using more of other things. I often found that people are very receptive and open to this idea that we can innovate our way out of a linear economy through technology. But they're not so good with accepting that when it comes to behaviours or changing the commercial model.

[00:00:30.000] - Lou Waldegrave Welcome to the Circular Economy Show podcast. Today, I'll be joined by Wen-Yu, our critical minerals lead here at the Ellen MacArthur Foundation. We'll be discussing the materials that will define our future, critical minerals. Join us as we explore how we can build secure and resilient supply chains, what circular opportunities can be seized right now, and the enabling factors that have opened crucial windows of opportunity for immediate action. Wen-Yu, Happy new year and welcome to the Circular Economy Show. For our audience, could you just… You joined the foundation in June last year as our executive lead for Critical Minerals. Can you give us a bit of background, your resume in 100 words or less and how you came to this point?

[00:01:26.880] - Wen-Yu Weng 100 words or less. Okay.

[00:01:28.540] - Lou Waldegrave That was a joke.

[00:01:30.460] - Wen-Yu Weng You'll be counting it. I think I joined the foundation out from a career in consulting. I was in consulting for 10 years where I was working on mostly low-carbon energy and low-carbon infrastructure projects. Basically, that means I work with businesses and governments to figure out how we can accelerate investments and innovation in things like renewable energy or electric vehicles or EV charging infrastructure, anything that contributes to the energy transition. After 10 years, I was ready for a new challenge. I saw the writings on the wall when it comes to critical minerals, and I learned about the foundation's ambition to tackle the circular economy of critical minerals, and so here I am.

[00:02:16.300] - Lou Waldegrave Which segues beautifully into my first question.

[00:02:20.020] - Wen-Yu Weng Here we go.

[00:02:21.120] - Lou Waldegrave We're now seeing critical minerals take centre stage in global political conversations. Why are they so important?

[00:02:31.200] - Wen-Yu Weng There's many layers to this, I think, because I think there's the material reality of why they're important. When it comes to some of the big megatrends that we're seeing in society today, one of the big trend is the energy transition. They move away from fossil fuels towards other low-carbon alternatives. When you are going through this transition, you quickly realise, from a material perspective, it's not that you just give up on fossil fuels, or you use less fossil fuels. There are other trade-offs. While you're using less fossil fuels, you're using more of other things, the material that is required to support energy transition.

[00:03:10.410] - Wen-Yu Weng We can see today that some of the materials that's required to support energy transition is critical minerals. The stuff that goes into EV car batteries, for example. But also a lot of critical minerals go into other things. There's critical minerals in solar, there's critical minerals in wind. Pretty much we're going from this fossil fuel-intensive transition to this material-heavy transition. That's the material reality where we need a lot of these things. But I think there are other reasons on top of that. This proves why quantitatively we need a lot of critical minerals, hence why we're talking about it a lot.

[00:03:43.980] - Wen-Yu Weng But the other issue is how we source these critical minerals. Just like fossil fuels, you don't find critical minerals everywhere. They're concentrated in some geographies. The process of getting these critical minerals into a state where they can be used, the processing, the refining, they're also concentrated in a few economies. I think the other reason we talk about it so much is not just because of the necessity of it, but some of the challenges that is perceived around how you source it.

[00:04:10.780] - Lou Waldegrave How then do you think we create secure and resilient supply chains to close the gap in on what is obviously a really quickly growing demand?

[00:04:22.180] - Wen-Yu Weng When a lot of people talk about this question, a lot of times you'll hear conversations about this country or this economy being worried about the overdominance in the supply chain of a certain country of the economy. When they talk about supply chain resilience, they're thinking about things like, how do we open up new extraction? Or how do we reshore, onshore some more of the upstream and midstream processes to create more supply chain resilience. But I think this conversation or that way of looking at supply chain resilience is maybe a bit more limited because it just means you're looking at supply chains from a pure, where do we dig, where do we refine, where do we process, perspective.

[00:05:05.240] - Wen-Yu Weng I think here at the Ellen MacArthur Foundation, it's probably no surprise to everyone that we think about supply chain resilience from the perspective of circularity and how the circular economy can contribute as well. Because if you, for example, are in Europe, you already have quite a significant number of EV cars on the street. The way you use these cars, the way you design these cars, or what do you do with the cars at the end of their lifetime, that all contribute to supply chain resilience. Supply chain resilience is not only the stuff that you do upstream and midstream, it's also the stuff that you do midstream, downstream in their second life. It's also how you design these products and these services in the first place. All of that contribute to giving you more supply chain resilience.

[00:05:47.600] - Lou Waldegrave What circular economy opportunities lie in shaping these supply chains to capture the value we need right now?

[00:05:57.000] - Wen-Yu Weng There are a lot of levers, I think, that we can pull to encourage circular economy and to drive value in these critical mineral value chains. If I list them all off the top of my head, I think we can be here for part two, part three, part four. That's a little lobbying effort to have me back, if that's okay. I think there are a few things that's exciting. One of the obvious things that everyone talks about is the huge role that recycling and material recovery will play. It is important to talk about that. Let me just focus on this a little bit because there's other things as well, but high-quality recycling material recovery is absolutely key. The reason that it's so important is because if you think about critical minerals, unlike a lot of other materials that you can potentially recycle, it's not just the case that there is value at the end of life. For some of these critical minerals, there is extremely high value at the end of life.

[00:06:57.400] - Wen-Yu Weng When we're looking at the logic for a circular economy for critical minerals, it's not just about getting some value out of a waste. It's not just about getting rid of toxic waste. There's a real economic logic for extracting very high value from the waste and circulating it back to the economy as quickly as possible because of the rapidly growing demand for critical minerals. Because of this extremely high value, the economic logic for recovery and recycling is quite high for a lot of these critical minerals if you can just make the policy and market incentives aligned. There's a lot of other things that we like to talk about at the foundation that comes way before recycling. How can you design the product and the system better? How can you reconceptualize the world that we use these energy transition technologies better? New types of business models. How do you make these things easier to repair or easier to disassemble, so you can go into it and remanufacture or refurbish part of it? There's so many things that we can talk about.

[00:08:03.600] - Lou Waldegrave Just to make that clear. Obviously, I know exactly what you mean, but just for everyone else. We're talking here about harvesting and recycling the critical minerals within the products, not the actual products themselves, right?

[00:08:18.940] - Wen-Yu Weng Yes, exactly. I guess there's a point to add here as well, which is, yes, maybe not the product themselves. If you look at a car, for example, the car is an EV car. It's made of many Very different components. But the battery drives the greatest component of value in a car. There's also a logic that, if you can create economy where there is incentive and a system and the tracing potential to recycle EV batteries, you can potentially have other co-benefits of recycling other parts of the car because there's this overall system of stewardship, overall system of infrastructure collection. There's so many levels to this. The thing is valuable, we want to recycle it. The thing is demanded, we need to get it back into the system and Circulate it. But there's also the fact that this is a huge opportunity for us to look at all the products that these critical minerals are in in the first place. I think that's also very interesting.

[00:09:11.220] - Lou Waldegrave What enabling factors have you seen that could or are currently opening windows of opportunity for immediate action?

[00:09:22.600] - Wen-Yu Weng As with a lot of other aspects of circular economy, there is a lot just around technology innovation. There's a lot of great companies, a lot of great scientists, a lot of technologists that are looking at very tangible, serious material innovation that would make things easier to recycle or make things last longer. All these things that contribute to having a circular economy. A lot of times what is needed there is opportunities to scale or systems to scale. How do you create the right infrastructure? How do you create the right policy? How do you incentivise finance to move into these technologies? There's also other things.

[00:10:01.450] - Wen-Yu Weng I think on the technological side, it's a bit hard to talk about it in a short podcast, but a lot of people understand there's so much innovation potential. The other thing I feel like society doesn't talk enough about is the potential to innovate for business models. This is a different logic. This is not to say you need to introduce something completely new in society in order to facilitate a circular economy. Most of the time, the grounding technology is there, the innovation is there, but the way we have a commercial model doesn't allow companies to be more circular. There's a lot of innovation on technology side. There's a lot on the business model side. I think we need a bit of both.

[00:10:42.850] - Lou Waldegrave That's systemic, isn't it? The whole system basically needs to change?

[00:10:47.400] - Wen-Yu Weng Yes, I think so significantly. It's always interesting because sometimes, to be honest, I would find… If I have to oversimplify, and I will oversimplify, then there'll probably be comments on the podcast.

[00:10:59.080] - Lou Waldegrave Please do oversimplify.

[00:11:00.000] - Wen-Yu Weng Then people can contact me further to be deliberately a bit more provocative. I would say sometimes society is much more open to the idea that technology can change the way we live, and they're much more conservative about the idea that we can do things differently. I often found that people are very receptive and open to this idea that we can innovate our way out of a linear economy through technology. But they're not so good with accepting that when it comes to behaviours or changing the commercial model because there's a lot more inertia to that. People often think, "If capitalism works a certain way, then surely it can't work another way. If something can make us profit and do good, wouldn't we have done that already?" I think there's a lot more resistance to the idea that you can still in 2026 have very interesting commercial model innovations that doesn't require you to introduce any new technology.

[00:11:51.560] - Lou Waldegrave What do we as a foundation need to do, and who do we need to mobilise these solutions?

[00:11:59.520] - Wen-Yu Weng As we've been talking about critical minerals, you would know that, as I mentioned, they're in so many things in energy transition. Not only that, we didn't get to talk about this as much today, but they're also in various parts of the digital economy, which is also accelerating as well. They're in a lot of things. Where my team at the Ellen MacArthur Foundation has focused on is on two areas as starting points. We want this to be the flash points for conversations and collaborations. These two points are, firstly, EV batteries, and secondly, consumer electronics.

[00:12:31.280] - Wen-Yu Weng Within these two programmes, we're creating a coalition of doers focused around, first and foremost, the business community. Companies from upstream, midstream, and downstream. What we see at the moment is a lot of companies are very focused on the immediate interfaces upstream and downstream, or they're focused on optimising their business model for the particular position that they're in in the value chain. But given the transformative potential of technology, Basically, given what we talked about in terms of creating new business models that would create new assets, new profit pools for these companies, we're very keen for companies to come together across the whole value chain to find opportunities for win-win situations to collaborate.

[00:13:15.450] - Wen-Yu Weng Business communities is definitely a big part of the people that we want to work with. But there's also not for profit sector, so for example, academia, think tanks, researchers. Of course, we want to work with policymakers as well. Bringing them all together to work on collaborative projects for demonstrations, for pilots, and opportunities to create win-win technology and business models. That's what we want to do.

[00:13:42.380] - Lou Waldegrave Mass collaboration, guys.

[00:13:44.260] - Wen-Yu Weng Mass, mass, mass collaboration. As much collaboration as you can. More collaboration than ever seen before. In case people are interested, I also want to point out that we have written this report about circular economy for EV batteries and critical minerals. That's coming out. In the report, we highlight some of the very interesting case studies that we're seeing in the industry. We also highlight five key bright spots where we see opportunity for tremendous upside for a lot of stakeholders to collaborate. I think often times when we talk about collaboration, really the key is we're trying to show that there is potential wins for companies as well as for policymakers and society and planet. We try to highlight that in the report. In case you're interested, take a look at that report.

[00:14:31.960] - Lou Waldegrave I think that should be coming out next week. Actually, when this podcast comes out, the report should come out. At that very time, you will be in Davos at the World Economic Forum. Who are you hoping to talk to there?

[00:14:47.040] - Wen-Yu Weng It's hard to narrow that down because there obviously are so many interesting and well-accomplished and extremely inspiring people at Davos. I would say I would like to meet anyone who is interested in creating a circular economy for critical minerals for the planet, for the next generation. I think we are at the best possible time to do something about this. We know the demand is going to grow exponentially, but we also know that if we intervene now, we're not only just correcting problems of the past, but we're creating a fundamentally new economy that could last for decades to come and would really make a transformative difference on reducing the extractive, intensive industries that we rely on today. It's all a long-term game for me. If anyone is really interested in having this conversation, I would just like to meet them.

[00:15:40.960] - Lou Waldegrave What's really great about this is we… I think we have the opportunity to get in there at the start with the recycling of EV batteries and things like that before it becomes an issue. We will work together now.

[00:15:56.270] - Wen-Yu Weng Exactly. I think, as you mentioned, the recycling volume is going to start to come in. Over time really ramp up in mid-2030s. But I think getting in at the start also means recognising that if you look at the growth of EV batteries over the next few years, not even end of lifetime, just over the next few years with a lot of the global economies taking up more and more EV cars, we're also getting in now to solve for problems when these EV cars come to the end of life 30, 40 years from now. From all perspectives, it's a window of opportunity for us.

[00:16:31.820] - Lou Waldegrave I hope you have a great time in Davos.

[00:16:33.640] - Wen-Yu Weng Thank you.

[00:16:34.310] - Lou Waldegrave I'd love to thank you so much for joining me here today. We really hope you'll come back after Davos to tell us all about it.

[00:16:43.120] - Wen-Yu Weng Yes, thank you.

[00:16:44.400] - Lou Waldegrave Thanks to Wen-Yu, we've heard that we need to mobilise collaborative action right now to ensure that circular solutions reduce our reliance on virgin resource extraction and allow us to meet the fast-growing demands of the clean energy transition. If you like this podcast, please share it with a colleague or friend, and remember to subscribe. We'll see you next time.