A closed loop business model: a significant contribution for European TSO’s to face copper scarcity?

Act in 2023 due to its essential role in electrification, renewable energy, and digital technologies. Global copper supply deficit is projected to reach 24% by 2040, posing significant risks to price increases, supply chains and project timelines.

This paper explores whether a closed-loop business model - recovering high-grade copper from end-of-life assets and reintegrating it into new equipment - can help European TSOs mitigate copper scarcity. The objective is to assess the feasibility, benefits, and challenges of such a model and its alignment with EU sustainability and resource security goals.

The study combines regulatory analysis, material flow calculations, and practical proof of concept. First, Elia Transmission Belgium (Elia) calculated its potential copper self-sufficiency ratio by forecasting inflows (new assets) and outflows (dismantled assets) for transformers .

Technical data sheets and decommissioning plans were used to estimate copper volumes per asset type. Proportional calculations were applied when exact specifications were unavailable.

Second, Elia tested a closed-loop model during the dismantling of a phase shifter that was damaged beyond repair at substation Zandvliet in partnership with Hitachi Energy and

Interbaro. The pilot aimed to trace copper from dismantling through smelting and back into new transformer production, adopting a mass balance approach to ensure traceability without isolating physical flows.

The study demonstrated that copper recovered from dismantled transformers could cover up to 10% of Elia’s copper needs for transformers for the next five years. This indicates that full selfsufficiency is unrealistic but closed-loop models can still provide strategic benefits.

The Zandvliet pilot highlighted challenges such as supply chain visibility, material flow tracking, and aligning production schedules with recycled copper availability. Despite these complexities, the test demonstrated that it should be possible to reintegrate high-grade copper into new assets under a mass balance system.

Regulatory developments strengthen the business case: the Waste Shipment Regulation (EU 2024/1157) will restrict scrap exports to non-OECD countries from May 2027, effectively ending copper scrap exports to China. Upcoming legislation, including the Circular Economy

Act and the Steel and Metals Action Plan, will further limit resource leakage and promote domestic recycling. Copper’s designation as a strategic raw material under the Critical Raw

Materials Act reinforces these trends.

To secure high-grade copper for European industries, the paper recommends adding contractual clauses requiring dismantling suppliers to sell recovered copper only to smelters that certify its resale within the EU. This measure would prevent resource leakage, enhance supply chain resilience, and align with environmental responsibilities.