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IEA: Demand for critical minerals is set to soar as the world pursues net zero goals

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Demand for critical minerals is set to soar as the world pursues net zero goals, a new report by the International Energy Agency (IEA) showed.

IEA Executive Director Fatih Birol noted that the energy sector’s needs for minerals could rise by as much as 6 times by 2040. “Insufficient supplies would risk delays and extra costs,” he wrote in a tweet.

The IEA’s new special report on The Role of Critical Minerals in Clean Energy Transitions shows critical mineral supplies emerging as an energy security challenge that can be addressed by proactive steps by governments and industry. The IEA is committed to helping governments ensure that mineral supplies don’t hinder global clean energy transitions, he wrote. “The challenges are not insurmountable, and critical minerals don’t undermine the case for clean energy,” Birol argued. “Though mineral extraction is relatively emissions-intensive, the lifecycle emissions of EVs today are about half those of a traditional car and only a quarter with clean electricity,” he wrote. “Governments need to act now and act together to reduce the risks of price volatility and supply disruptions,” he tweeted.

According to the Paris-based IEA, minerals are essential components in many of today’s rapidly growing clean energy technologies – from wind turbines and electricity networks to electric vehicles. Demand for these minerals will grow quickly as clean energy transitions gather pace. The new World Energy Outlook Special Report examines the complex links between these minerals and the prospects for a secure, rapid transformation of the energy sector.

Birol shared some thoughts on how to ensure minerals enable rapid clean energy transitions in an article published on May 6.

“Today, the global energy system is in the midst of a major transition to clean energy. The efforts of an ever-expanding number of countries and companies to reduce their greenhouse gas emissions to net zero call for the massive deployment of a wide range of clean energy technologies, many of which in turn rely on critical minerals such as copper, lithium, nickel, cobalt and rare earth elements,” he wrote.

The IEA’s report technologies differ profoundly from one that runs on fossil fuels. A typical electric car requires six times the mineral inputs of a conventional car, and an offshore wind plant requires 13 times more mineral resources than a similarly sized gas-fired power plant.

“An evolving energy system calls for an evolving approach to energy security. As clean energy transitions accelerate globally and solar panels, wind turbines and electric cars are deployed on a growing scale, these rapidly growing markets for key minerals could be subject to price volatility, geopolitical influence and even disruptions to supply,” he wrote.

The new IEA report identifies risks to key minerals and metals that – left unaddressed – could make global progress towards a clean energy future slower or more costly, and therefore hamper international efforts to tackle climate change. “The IEA is determined to play a leading role in enabling governments around the world to anticipate and navigate possible disruptions and avoid damaging outcomes for our economies and our planet,” he wrote.

Birol noted that today’s supply and investment plans for many critical minerals fall well short of what is needed to support an accelerated deployment of solar panels, wind turbines and electric vehicles. “Many minerals come from a small number of producers. For example, in the cases of lithium, cobalt and rare earth elements, the world’s top three producers control well over three-quarters of global output. This high geographical concentration, the long lead times to bring new mineral production on stream, the declining resource quality in some areas, and various environmental and social impacts all raise concerns around reliable and sustainable supplies of minerals to support the energy transition,” he wrote.

“These hazards are real, but they are surmountable. The response from policy makers and companies will determine whether critical minerals remain a vital enabler for clean energy transitions or become a bottleneck in the process. Critical minerals certainly don’t undermine the case for clean energy,” Birol wrote, adding that, for example, although mineral extraction is relatively emissions-intensive, the lifecycle emissions of EVs today are about half those of a traditional car and would fall to only a quarter with clean electricity.

Based on this special report, the IEA identified six key recommendations to ensure mineral security. An essential step is for policy makers to provide clear signals about their climate ambitions and how their targets will be turned into action. Long-term visibility is essential to provide the confidence investors need to commit to new projects, Birol said, adding that efforts to scale up investment should go hand-in-hand with a broad strategy that encompasses technology innovation, recycling, supply chain resilience and sustainability. And producers must be compelled to meet stricter environmental and social standards.

“There is no shortage of resources worldwide, and there are sizeable opportunities for those who can produce minerals in a sustainable and responsible manner. Because no single country will be able to solve these issues alone, strengthened international cooperation is essential,” Birol said, adding, “Leveraging the IEA’s long-standing leadership in safeguarding energy security, we remain committed to helping governments, producers and consumers tackle these critical challenges”.

 

 

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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