Released May 05, 2021 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The global effort to combat global warming could be imperiled by the supply, demand and price for a number of critical minerals that play key roles in the transition to a clean energy economy, according to a report released today by the International Energy Agency (IEA) (Paris, France). The minerals in question include chromium, copper, major battery metals (lithium, nickel, cobalt, manganese and graphite), molybdenum, platinum group metals, zinc, rare earth elements and others.
There is a large and growing body of analytic work on what steps the world needs to take to fulfil the Paris Agreement and keep the rise in global temperature to less than 2 degrees Celsius. These steps include dramatically increasing the construction of renewable electric generation; increasing the deployment of electric vehicles (EVs); and more rapidly accelerating the phase-out of coal in electricity generation. But to date, there has been far less on the supply, demand and price of the critical minerals that will enable the shift to a clean economy. By shining a light on the minerals needed for the global energy transition, the Paris-based energy agency is signaling that the path to a clean economy is even steeper than anticipated.
The data in the IEA report, The Role of Critical Minerals in Clean Energy Transitions, "shows a looming mismatch between the world's strengthened climate ambitions and the availability of critical minerals that are essential to realizing those ambitions," said IEA Executive Director Fatih Birol. "The challenges are not insurmountable, but governments must give clear signals about how they plan to turn their climate pledges into action. By acting now and acting together, they can significantly reduce the risks of price volatility and supply disruptions."
Manufacturing an EV takes about six times the minerals used to make a conventional internal-combustion (ICE) vehicle, the IEA report noted. Significant amounts of nickel, manganese and graphite are needed. EVs also require far more copper than ICEs. Renewable energy generation, such as onshore or offshore wind and solar photovoltaics (PV), also require significantly more copper, zinc and silicon compared to natural gas-fired generators, coal-fired generators, or nuclear power plants, the IEA report said.
There is a large and growing body of analytic work on what steps the world needs to take to fulfil the Paris Agreement and keep the rise in global temperature to less than 2 degrees Celsius. These steps include dramatically increasing the construction of renewable electric generation; increasing the deployment of electric vehicles (EVs); and more rapidly accelerating the phase-out of coal in electricity generation. But to date, there has been far less on the supply, demand and price of the critical minerals that will enable the shift to a clean economy. By shining a light on the minerals needed for the global energy transition, the Paris-based energy agency is signaling that the path to a clean economy is even steeper than anticipated.
The data in the IEA report, The Role of Critical Minerals in Clean Energy Transitions, "shows a looming mismatch between the world's strengthened climate ambitions and the availability of critical minerals that are essential to realizing those ambitions," said IEA Executive Director Fatih Birol. "The challenges are not insurmountable, but governments must give clear signals about how they plan to turn their climate pledges into action. By acting now and acting together, they can significantly reduce the risks of price volatility and supply disruptions."
Manufacturing an EV takes about six times the minerals used to make a conventional internal-combustion (ICE) vehicle, the IEA report noted. Significant amounts of nickel, manganese and graphite are needed. EVs also require far more copper than ICEs. Renewable energy generation, such as onshore or offshore wind and solar photovoltaics (PV), also require significantly more copper, zinc and silicon compared to natural gas-fired generators, coal-fired generators, or nuclear power plants, the IEA report said.
Click on the image at right to see the mineral demands for EVs, as well as renewable energy generation.The Role of Critical Minerals in Clean Energy Transitions also noted how demand for some of these minerals has risen sharply since 2010, and projected further dramatic surges over the next two decades. The agency projected future demand for lithium, cobalt, nickel, copper and rare earth elements under two scenarios: The Stated Policies Scenario (STEPS) indicates where the energy system is heading based on a sector-by-sector analysis of today's policies and policy announcements, which IEA claims will fail to fulfill the Paris Agreement. The Sustainable Development Scenario (SDS), on the other hand, shows the policy steps necessary to meet the Paris Agreement goals.
Under SDS, worldwide demand for lithium, graphite, cobalt, nickel and rare earth elements would soar over the next two decades. Lithium demand by 2040 could skyrocket by 42 times its 2020 demand, while global demand for graphite would shoot up 25 times its demand in 2020, the agency projected.
The IEA report is not the first one to note that production and processing of these critical elements are concentrated in a few countries, a sharp contrast to current global production and processing of crude oil and natural gas. The more fragmented nature of global oil and gas extraction and processing means producers and processors have little ability to dictate prices or withhold supply, as the Organization for the Petroleum Exporting Countries (OPEC) (Vienna, Austria) did with dramatic effect for crude oil several times in the 1970s and 1980, but failed to do more recently.
The IEA report noted that China dominates the production of graphite and rare earth minerals. That same nation dominates--to an even greater degree--the processing of rare earth elements, cobalt, lithium, copper and nickel.
It would be one thing if a new supply of these minerals could be brought up quickly, but the IEA report says it has taken an average of more than 16 years to move mining projects from discovery to first production. So even an all-out global drive to develop critical-mineral projects would not produce the requisite amount of minerals the world is expected to need to fulfill the Paris Agreement.
The energy agency believes the global management of the supply, demand and price of critical minerals comes down to six interconnected steps:
- Ensure adequate investment in diversified sources of new supply
- Promote technology innovation at all points along the value chain
- Scale up recycling critical minerals
- Enhance supply chain resilience and market transparency
- Mainstream higher environmental, social and governance standards
- Strengthen international collaboration between producers and consumers
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