There is a number that should be making headlines in every European capital, but somehow never does: 36%.

That is the share of e-waste generated in the EU that currently gets recycled through official channels. Not recovered cleanly. Not returned to the economy in any meaningful way. Just 36%. And here is the part that makes it worse – it is actually falling. In 2012, the figure was 41%. Over a decade of legislative action, sustainability commitments, and circular economy rhetoric, and Europe has actually moved backwards.

Every year, European households and businesses discard roughly 12 million tonnes of electronic waste. Inside that waste stream sits gold, palladium, copper, rare earth elements – materials that Europe spends billions importing because it cannot secure them domestically. The same materials sitting in landfills, being incinerated, or shipped to informal processing sites in West Africa and Southeast Asia where they are extracted by hand under conditions that would be illegal here.

This is not a resource problem. It is a systems problem. And the solution is not another directive.

Why the Current Approach Isn’t Working

The conventional answer to e-waste has been smelting. You collect the waste, separate the valuable components as best you can, and feed the remainder into high-temperature furnaces that melt everything down and separate metals through pyrometallurgical processes. It is a century-old technology applied to a 21st-century problem.

The results speak for themselves: smelting recovers somewhere between 60 and 70 percent of valuable metals at best. It requires temperatures exceeding 1,200°C, consuming enormous amounts of energy. It produces toxic emissions. The capital cost of a facility is prohibitive for most operators, concentrating processing capacity among a handful of large industrial players and creating the kind of infrastructure bottleneck that makes a genuinely distributed circular economy impossible to build.

Meanwhile, e-waste collection itself is broken. The economics do not work for small-scale operators. Regulatory compliance is complex and inconsistent across member states. And much of what gets collected legally ends up exported anyway, because the cost of domestic processing exceeds the value the processor can recover.

The result is a system that looks functional on paper – we have WEEE directives, extended producer responsibility schemes, collection targets – but produces a recycling rate that has declined over a decade while the volume of waste has grown. We have regulated the problem without solving it.

The Three Things a Real Fix Requires

Any credible solution to the European e-waste crisis has to address three specific failures simultaneously.

First, the chemistry has to change. Processing technology that requires extreme temperatures, produces hazardous byproducts, and recovers less than three-quarters of available material is not a foundation for a circular economy. The economics of recovery need to improve dramatically, and the environmental cost of the recovery process itself cannot be written off as acceptable.

Second, the economics have to work at smaller scale. If the only viable processing model requires a €100 million smelter, you will never build the distributed infrastructure Europe needs. Collection points and processing capacity need to be deployable closer to where waste is generated — which means smaller footprint, lower capital cost, and a business case that works for operators below industrial scale.

Third, the digital infrastructure has to exist. A functional circular economy for electronics is not just a chemistry problem. It requires traceability. You need to know what materials are in a given product, what their condition is, where they have been, and what recovery pathway is appropriate. Without that data layer, you cannot build the trusted value chains that make recovered materials commercially viable. You cannot close the loop.

Most e-waste initiatives address one of these three. Almost none address all three together.

What a Working Model Looks Like

I want to describe a specific project, not because I am promoting it, but because it is genuinely the most complete answer to this problem I have encountered — and we at MoreThanDigital are a formal partner in it.

RETURN — Recovering Electronics Parts and Materials for Maximum Resource Efficiency — is a Horizon Europe Innovation Action bringing together nine partners across the UK, France, Italy, Germany, and Switzerland. Its goal is to demonstrate a commercially viable, fully integrated circular system for electronic waste built around three complementary technologies.

The chemistry at the core of RETURN is a process using Deep Eutectic Solvents (DES): eco-friendly liquid salts that dissolve and recover metals from waste printed circuit boards at near-ambient temperatures — between 50 and 80 degrees Celsius, compared to the 1,200-plus degrees required by smelting. The process achieves metal recovery rates above 99 percent. It produces zero Scope 1 emissions. The projected CO2 reduction versus conventional smelting is 69 percent. The facility footprint required to process five thousand tonnes of PCBs per year is approximately 400 square metres — small enough to be deployed in an industrial unit, not a purpose-built industrial complex.

That changes the economics. A processing facility of this kind requires around €13 million in capital investment and is projected to reach payback in under a year. That is a business model that works for a much broader range of operators than the smelting alternative.

The intelligence layer is an AI-driven machine vision system that identifies, sorts, and routes e-waste components automatically — distinguishing between items suitable for direct reuse, high-value components that should be harvested before processing, and material that should go straight to chemical recovery. This step matters because the economics of the whole system improve dramatically when high-value components are extracted before they are dissolved. It also enables the separation of functional devices into secondary markets rather than the waste stream.

And then there is the digital infrastructure: a blockchain-based Digital Product Passport (DPP) system for every recovered component and material, linked to a Dynamic Digital Marketplace (DDM) that connects suppliers of recovered materials with manufacturers who need them. This is not a feature — it is the mechanism by which recovered materials re-enter the economy at verified quality and trusted provenance. Without this layer, even perfect chemical recovery produces outputs that sit in a warehouse because buyers have no way to trust what they are getting.

Together, these three elements constitute something that genuinely does not exist elsewhere at this scale: a green-chemistry recovery process with the economics to deploy broadly, an AI pre-sorting capability that maximises the value of every device processed, and a digital infrastructure that makes recovered materials commercially tradeable.

Why This Matters Beyond One Project

I want to be precise about what I am arguing here, because it matters for how European policy and industry approach the next five years.

The RETURN model is not the answer to Europe’s e-waste problem in isolation. A single Horizon Europe project, however well-designed, cannot process 12 million tonnes of annual waste. What it represents is a validated template — a working combination of technologies and business models that can be replicated, licensed, and scaled across member states.

The DES process is the part that changes the economics of the entire sector if it is successfully demonstrated at pre-commercial scale, which is what this project is designed to do. If you can show that a 400-square-metre facility can process five thousand tonnes of PCBs per year at a viable margin, using eco-friendly chemistry, with near-total metal recovery — that is a model that can be franchised. That is infrastructure that regional operators, national recycling authorities, and private investors can actually deploy.

The DPP and DDM layer is the part that makes the recovered materials worth something on open markets. This matters because the EU’s Ecodesign for Sustainable Products Regulation (ESPR) is going to mandate traceability for electronics anyway. The question is whether European industry builds that infrastructure proactively, using proven models, or scrambles to comply after the deadline. RETURN is building a working implementation now.

And the AI sorting capability is what makes the economics of the other two work — because no chemistry process and no digital marketplace can function efficiently if the input material is not properly characterised before it enters the system.

The combination is what matters. And the combination is what has been missing.

The Actual Problem Is Not Technology

Europe has the chemistry expertise, the AI capability, and the regulatory framework to lead the world in circular electronics. What it has lacked is an integrated model that makes all three work together at commercially viable scale.

That model now exists. Whether European industry and policymakers choose to scale it is a different question – and one that the next five years will answer.