Environmental impact of material's supply chain disruption. The cases of Aluminium and Lithium

The effects of recent geopolitical developments and events on raw material supply chains have led to new forms of instability and unpredictability in international relations. While economic and strategic considerations dominate the European agenda, the environmental implications of supply disruptions often receive less attention. This report builds on a pilot study initiated in 2023, which developed an analytical framework to evaluate the environmental consequences of raw material supply chain disruptions and explore potential responses. The framework, which was initially applied to case studies on nickel and rare earth elements, has been further refined and implemented in this report to analyse aluminium and lithium—materials chosen based on specific criteria. The study outlines three primary strategies to address supply chain disruptions: 1. Short-term (2024–2026): Establish trade relations with alternative suppliers. 2. Medium-term (2026–2030): Expand domestic recycling capacity to meet demand. 3. Long-term (2030–2040): Develop domestic capabilities for raw material extraction, processing, and refining. The report analyses the EU trading countries to assess the environmental impact of supply disruptions. While main trading partners for bauxite are Guinea and Brazil, for lithium main trading partner are China and Chile. The findings indicate that shifting aluminium supply to domestic EU sources and enhancing recycling capacity can significantly reduce environmental impacts—particularly in terms of global warming potential, energy use, and water ecotoxicity—when viewed through the lens of EU footprint. For lithium, while short-term shifts to alternative suppliers are more complex, medium- and long-term measures, including increased recycling and expanded refining capacity within the EU, could prevent annual emissions of 0.5 to 1 million tonnes of CO2-equivalent. The report underscores the critical role of supply chain decisions, investment in recycling technologies, and domestic production in mitigating environmental impacts. However, while these measures may benefit the EU, the study acknowledges that they do not automatically translate into reduced global environmental effects. This study provides a preliminary assessment of impacts, constrained by data limitations, resource availability, and strict assumptions. Future research should explore additional policy options, including demand reduction and material substitution, alongside detailed life cycle assessments of the entire value chain. These insights could significantly inform and improve policy-making processes.