Surging battery materials demand could slow down energy transition: IEA
Demand for critical materials will surge in the next decades as the world transitions to clean energy technologies. The question, however, is whether there will be enough supply to enable such a transition, the International Energy Agency (IEA) said on Tuesday.
The Paris-based agency warns that “potential energy security hazards” could form if governments don’t act now to address the projected supply shortage of these minerals. In the newly released The role of critical minerals in clean energy transitions report, the IEA makes recommendations to policy makers to ensure the essential raw materials for batteries and wind turbines accelerate the transition rather than become a bottleneck.
Overall critical materials demand could increase by six times by 2040, depending on how quickly governments act to reduce emissions. Demand from electric vehicles batteries and grid storage is set to grow at least 30 times to 2040, Kallanish reports.
Without long-term commitments from countries around the world, investors lack confidence to build supply, which instead of enabling the transition, would slow down progress, the IEA argues.
Executive director Fatih Birol says there’s currently a “looming mismatch” between the global strengthened climate ambitions and the availability of these minerals.
“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.”
The 21st century energy security problem is no longer about oil, but about minerals such as copper, lithium, nickel, cobalt and rare earth elements. The agency points out that there’s no shortage of resources, but the quality of available deposits is declining as the most immediately accessible resources are exploited. Hence the need for action to be taken fast, it adds.
Among the recommendations provided in the report, Birol’s team says governments around the world should be promoting technological advances; scaling up recycling to relieve pressure on primary supplies; and enhancing international collaboration between produces and consumers.
According to the IEA’s projections, battery materials demand could grow from 0.4 million tonnes in 2020 to up to 12.7m t in 2040 under a scenario in line with the Paris Agreement targets. Under a less aggressive scenario, based on current stated policies, demand from the EV and battery storage sectors would rise to 4m t. If governments accelerate their transition commitments, then demand could surge to 21.5m t, the IEA forecasts.
“In a scenario consistent with climate goals, expected supply from existing mines and projects under construction is estimated to meet only half of projected lithium and cobalt requirements, and 80% of copper needs by 2030,” the report says. “Today’s supply and investment plans are geared to a world of more gradual, insufficient action on climate change. They are not ready to support accelerated energy transitions.”
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Anonymous
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