An economic analysis of midstream manufacturing in the European Union defence and aerospace sectors and opportunities for a more circular economy in the UK
Photo by Maksym/Adobe Stock
Defence and aerospace supply chains depend on critical, high-value materials such as nickel, rare earth elements, graphite and lithium. While waste volumes are relatively small, midstream manufacturing scrap can contain strategically important materials. Greater circularity could reduce import dependence, retain value domestically and improve supply resilience.
The study assessed circular economy opportunities across midstream defence and aerospace manufacturing. It used desk research, supply chain mapping, technology maturity assessment, comparative country analysis and cost-benefit modelling for nickel and rare earth elements.
The study found that valuable scrap is generated across Tier 1 to Tier 3 suppliers, but recovery practices vary by material and geographies. Much of the value is currently captured by downstream recyclers and melters, while closed-loop systems remain limited outside mature alloy streams.
The UK can strengthen material security by treating recycling and midstream processing as strategic industrial capacity. Near-term action should focus on reducing regulatory barriers and retaining high-quality production scrap, while medium- and long-term policy should support investment, demand certainty, traceability and closer alignment with relevant EU standards.
