China’s critical minerals threaten clean energy transition
A new report is sounding the alarm bells about the mismatch between policies forcing an energy transition and the availability of critical minerals that would make it achievable.
Whilum Joe Biden was out for a spin-in Ford’s new electric F-150 earlier this month, the International Energy Agency (IEA) sounded the alarm on the mismatch between policies forcing an energy transition and the availability of critical minerals that would make it feasible.
the IEA Report, “The Role of Critical Minerals in Clean Energy Transitions,” presents a thought-provoking account of the geopolitical and environmental risks arising from this mismatch, undermining the credibility of wind, solar and battery storage. These technologies, often viewed as clean and abundant, are in some ways more resource-intensive than the sources of electricity and the types of vehicles they would replace.
Minerals such as lithium, cobalt, zinc, manganese, copper, nickel and rare earth elements, led by neodymium, are essential to the wind-solar-battery triumvirate with which the Biden administration wants to anchor our energy mix. The IEA, however, sees a rush for these minerals on the horizon.
In the Paris Agreement-compliant IEA scenario, the demand increases required are so alarming that they require direct quotation. The IEA says that meeting the Paris targets “would mean quadruple the mineral requirements for clean energy technologies by 2040”. The largest increases in demand in the IEA forecast are due to batteries for electric vehicles and energy storage. Demand for these end uses will grow “at least thirty times through 2040”, with demand for lithium, graphite, cobalt and nickel increasing the most rapidly.
Energy transition and geopolitical risk
The geopolitical issues linked to a forced energy transition are so well worn out. China, a country the Biden administration judges “our most serious competitor“, Is the primary processor of all of the key minerals that would enable the transition in question, processing between 30-40% of the world’s copper and nickel, 55-60% of the world’s cobalt and lithium, and 85% of rare earth elements, according to the IEA. China too product a majority of the rare earths required for wind turbines and of the graphite which makes up the battery anodes.
According to the the Wall Street newspaperby Chuin-Wei Yap, China is increasing its systematization on these fronts. “Since October, dozens of Chinese manganese processors representing the bulk of global capacity have joined a state-backed campaign to establish an ‘alliance for innovation in manganese’,” Yap writes, “defining in the goals and metrics planning documents that others in the industry say. are akin to a production cartel. The objectives include centralization of supply control, price coordination, storage and networking for mutual financial assistance. This development is consistent with the reaffirmation of the influence of the party-state on commercial affairs, more visible in the “Made in China 2025” initiative and the dual circulation strategy.
From a geopolitical standpoint, China and the United States have divergent energy interests. China has a strong strategic incentive to wean itself off from oil and gas. Although it is the world leader in what the IEA calls “energy transition minerals” (ETMs), it imports more oil than any other country on earth. With its comparative advantage firmly entrenched in ETMs, Beijing’s effort to extricate itself – and the rest of the world – from fossil fuels is creating leverage. For the United States, the world’s largest producer of hydrocarbons, it is difficult to justify renouncing affordable, locally sourced energy in favor of a new dependence on resources.
According to market orthodoxy, geopolitical risks such as those of the ETM supply chain will be considered – that is, companies are incentivized to consider risk by investing in the diversity of supply, even if it means higher costs in the short run. Real-world data, however, is cooling expectations of a rapid mineral surge in the event of coercive behavior from China. The average times observed by the IEA (from discovery to production) based on 35 projects commissioned over the past decade were four years for Australian lithium, seven years for South American lithium, 13 years for nickel sulphide, 17 years for copper and 19 years. years for nickel laterite.
The IEA therefore does not expect the ETM balance of power to change anytime soon. Its analysis of the existing project pipeline indicates that “most of the growth in lithium, nickel and cobalt production is expected to come from major producers today, implying a higher degree of concentration in the years to come. to come up.
Energy transition and environmental risk
On environmental issues, the IEA report lands body after body shot, with its harshest hits on mineral needs.
Electric vehicles, such as the F-150 Lightning the President jumped into, require six times more mineral inputs than comparable internal combustion vehicles. The average VE needs over 200 kilograms of minerals, with graphite (over 50 kg), copper (over 50 kg), nickel and manganese (combined over 50 kg) topping the list. The mineral requirement for the average conventional vehicle is less than 40 kg in total, most of which is copper.
Regarding power generation, the IEA states that “while solar PV plants and wind farms do not require fuels to operate, they generally require more materials than their fossil fuel-based counterparts for construction.”
Per megawatt, according to IEA data, offshore wind requires around 8,000 kg of copper and 5,000 kg of zinc; onshore wind requires around 3,000 kg of copper and 5,000 kg of zinc; and solar power requires about 3000 kg of copper and 3000 kg of silicon.
Meanwhile, nuclear power requires less than 2,000 kg of copper and less than 6,000 kg of minerals in total; coal requires about 3000 kg of minerals; and natural gas requires less than 2,000 kg per megawatt.
In addition, according to the IEA, the extraction and processing of resources for supposedly clean energy involves substantial environmental damage, including water contamination, increased water stress in arid regions, adverse effects on biodiversity and the production of toxic and radioactive materials.
Even the ostensible objective of a forced energy transition – to eliminate greenhouse gas emissions – is only partially served by the wind-solar-battery means chosen. Because they result in higher per unit emissions than bulk metals, the IEA warns that “the production of energy transition minerals can be a significant source of emissions as demand increases.”
By comparing automobiles, the IEA calculates the greenhouse gas emissions of an electric vehicle over the lifecycle – taking into account battery production, vehicle manufacturing, and battery charging via electricity – represent approximately 50% of greenhouse gas emissions in the life cycle of a conventional vehicle. In other words, while a conventional vehicle will emit 40 tonnes from start to finish, an electric vehicle will still emit 20. Given the battery size of the new electric F-150 (an estimate 150 kWh according to Car and driver), you can be sure that it has questionable environmental effects.
Compromises, not solutions
Paradoxically, the IEA itself seems unable to understand the significance of its findings. In response to a column by Mark Mills highlighting the report in the the Wall Street newspaper, the IEA communications officer wrote a letter to the editor insisting that his analysis was distorted and that the mineral challenges of a forced transition are “surmountable”.
Yet all the IEA has to offer to guide what it calls “mineral security” is a set of generic and pollyannaish suggestions. Its six “key recommendations” are “to ensure adequate investments”, “to promote technological innovation”, “to intensify recycling”, “to improve the resilience of the supply chain and market transparency”, “to integrate higher environmental, social and governance standards ”and“ strengthen international collaboration. “
A forced energy transition presents tangible resource acquisition challenges that cannot be easily resolved. Vague recommendations to “mainstream” standards and “strengthen” cooperation are analytical flaws.
Perhaps the reason the investment has not been ‘adequate’ and recycling needs to be ‘stepped up’ is that the much-vaunted transition just doesn’t make economic sense. This mineral report from the IEA adds to a chorus suggesting that it does not geopolitics or environmental neither, because we would trade climate risks for risks of other kinds. In the words of esteemed Thomas Sowell, when it comes to public policy, there are no solutions, only compromises.
Are these the energy tradeoffs we want to make?