The war in Iran exposes fragile global supply chains, recycling is no longer green virtue, it’s economic survival

Oil prices have risen sharply since the start of the conflict, increasing cost pressures across energy-intensive industries. Plastics, which rely on petrochemical feedstocks, have been among the first to feel these effects. Aluminium markets have also seen volatility in recent weeks.

While driven by multiple factors, the current crisis has highlighted how both production and distribution remain exposed to geopolitical disruption

Aluminium is one of the primary weapons in the push for net zero. It is widely used in electric vehicles and renewable energy systems, and is one of the few materials that can be recycled repeatedly without loss of quality.

This is one reason Gulf countries like the UAE, Bahrain and Qatar have invested in aluminium industry, as part of an effort to diversify their oil-dependent economies.

However, the current situation has demonstrated how even highly efficient global production hubs remain vulnerable when trade routes are disrupted and logistics become more complex and costly.

At the same time, energy prices are constraining production elsewhere. Virgin aluminium production is electricity-intensive, and in regions such as Europe, high power costs are limiting the ability to increase domestic output.

This has been reflected in the UK, where producers have warned that energy costs remain a significant barrier to expanding capacity.

This points to a broader structural issue: many modern material supply chains are highly efficient under stable conditions, but can become fragile when exposed to energy shocks and geopolitical disruption

This is where circularity becomes increasingly important.

A circular economy - as opposed to a linear one - is a system in which material once used is reclaimed, recycled and used again, saving an enormous amount of material and energy.

Materials with high recycled content and well established collection systems, like aluminium, are less exposed to global shocks than those that rely on continuous inputs of virgin material, such as plastics and petrochemicals.

In the case of aluminium, the benefits are particularly clear. Producing aluminium from recycled material requires around 95% less energy than producing it from raw inputs.

At a time of elevated energy prices, this represents a significant advantage.

So what can we learn from what’s happened in the Gulf? Well, in the same way that those in the energy sector have been highlighting the resilience of renewables to oil shocks, I believe that a massively-expanded circular economy could both insulate us from similar future energy and supply shocks and while taking us towards net zero.

An increased focus on an infrastructure of circularity would go some way to mitigating those issues. For starters, it would mean we could get more out of the aluminium we already have here, rather than having to dig more out of the ground or rely so much on smelters in the Gulf. It would mean supply itself would be less volatile.

One further area where the use of more recycled aluminium will be an enormous help is in packaging. With plastic costs spiking, leading to an increase in package good prices, one step towards circularity that firms could take is considering switching their packing to a circular alternative, such as aluminium.

Like so many industries, the past decade has been one of massive upheaval and reordering, with many drawing the conclusion that localised, sustainable supply chains are not only good for the planet, but good for our security and the economy.

In this context, circularity is not only an environmental imperative, but a strategic one. Systems that can decouple material supply from energy volatility and geopolitical risk will be better positioned to withstand future shocks.

Recycling may not traditionally have been viewed as a strategic priority, but our economy and the future of climate depends on it.

The question is no longer whether circularity has a role to play, but how quickly it can be scaled to reduce exposure to the next disruption.

My hope is that governments and industry leaders recognise this and act on it, instead of waiting for the next geopolitical shock.

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Ross Murdoch is a sustainability expert and Chief Sustainability Officer at Meadow - a sustainable packaging technology firm

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