Circular Economy for Critical Materials in the EU using CGE Modelling

The circular economy has become a central policy pillar in the European Union, particularly under the Circular Raw Materials Act, aimed at reducing material dependency, emissions, and environmental pressures associated with primary extraction of critical raw materials. Metals such as aluminium, copper, iron, and steel are essential to industrial production and the energy transition, yet their circularity varies significantly across sectors and regions. This study analyses how circular economy mechanisms for major metals are represented within a computable general equilibrium (CGE) framework, with a focus on the European Union. We assess the GTAP 11 database and its circular economy extension in terms of data coverage, sectoral disaggregation, and treatment of recycling, secondary material flows, and trade. By providing a systematic evaluation of this dataset, the paper identifies key modelling strengths and limitations and lays the groundwork for robust CGE analysis of circular economy policies and material efficiency strategies in the EU.