Supply constraint poses threats to achieving green energy targets: report
These challenges include supply shortages, monopolisation, and geopolitical concerns.
Achieving energy transition targets could face delays should there be constraints in the supply of critical minerals used in manufacturing essential green energy technologies, according to a report by GlobalData.
GlobalData said the ambitious goals to scale up energy sources such as solar, wind, and nuclear are “straining natural sources.”
“Several minerals that are critical for the energy transition are facing various supply-side constraints. These include supply shortages, resource monopolisation, and geopolitical impediments,” said Isabel Al-Dhahir, Senior Analyst, Thematic Intelligence at GlobalData.
The five most critical minerals used to develop batteries for electric vehicles and renewable energy technologies are lithium, cobalt, copper, nickel, and rare earth elements.
Al-Dhahir added that geopolitics also plays a role in the discussion of critical minerals as many are restricted to certain regions of the world, with China dominating the procurement and processing.
“This has helped accelerate the development of China’s electric vehicle and energy transition industries. Following a delayed reaction, the US and the EU are eager to balance the scales,” she said.
“The race to control these mineral assets has led to intense rivalries between China, the US, and the EU, with China currently dominating the mineral supply chain and the development of energy transition technologies,” she added.
Both the US and Europe have committed billions worth of financial support to their energy transition industries and created independent mineral supply chains “to level the playing field,” Al-Dhahir said.