10-Day Countdown to #Unshackle #EU #Cleantech: #CriticalMinerals

Day 9:?The countdown continues! For those catching up, each day until the European Council on 9-10 February, I’ll be sharing one actionable?#idea?a day that can help accelerate the?#energytransition?and make Europe a global leader in?#cleantech?#innovation?and?#deployment.

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Critical Minerals: The Lifeblood of the Clean Energy Economy

#Criticalminerals first came to my attention when my think tank at the European Commission wrote a paper on #industrialpolicy back in 2019. It included a chart on ‘critical raw materials’. It was a wake-up call. Take a look yourself.

Since then, critical minerals have only grown in importance and are now widely recognized as a cornerstone of the #clean #energytransition. Not only do they play vital roles as components of clean technologies, their extraction and processing also represent a huge opportunity to decarbonize the mining sector itself - a notoriously high emitter that has often been accused of being in breach of environmental and social standards. It’s part of the reason why countries with good governance and high social standards were ambivalent and therefore slow to move on critical minerals. And why China is now so well positioned in extraction and processing.

But with the United States, Europe and dozens more countries pledging to reach #netzero, it was inevitable that competition for critical minerals would heat up up, fundamentally altering global energy supply chains. Energy sector demand for five key critical minerals – copper, lithium, cobalt, nickel and rare earth elements – is expected to quadruple by 2030. An even more striking projection made: extraction of the materials needed in the next 30 years is equivalent to the total amount of materials extracted since the dawn of humanity.

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In Europe, the #EU #CriticalRawMaterials Act is expected to be unveiled March 14. Announced?as part of the EU’s #repowereu plan to reduce the bloc’s dependence on Russian fossil fuels, the strategy aims to identify raw materials important for the EU’s strategic interests, with a particular focus on

• resources contributing to the bloc’s green goals
• feeding in to a revamped EU industrial policy
• helping curb reliance on Russia and China for critical materials needed for green technologies (including the possible introduction of?EU supply targets?for lithium and nickel)
• setting out a way to subsidize production, processing and strategic storage reserves of critical raw materials within the bloc.

I sincerely hope that as part of this exercise, the EU will also consider #substitution of #criticalminerals as a key priority. It is precisely here where our expertise in #research and #innovation could serve not only us but the world at large. To give you an example, the other day I spoke to Roeland Baan, CEO of Topsoe, a global leader in decarbonisation?technologies and surface science. Roeland shared with me that the company has developed a battery that uses no cobalt or any other rare earth metal, and only needs half the amount of Lithium compared to the current leading battery materials. Now that’s what a call a breakthrough! And one that should be squarely on the radar of #publicpolicy.

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The #todolist for critical minerals is long – and very multifaceted, as you will see below.

Supply constraints: between a rock and a hard place

Different mineral resources are used for different technologies. A typical electric car requires six times the mineral inputs of a conventional car, with lithium, nickel, cobalt, manganese and graphite crucial to battery performance, longevity and energy density. An onshore wind plant requires nine times more mineral resources than a gas-fired plant, with rare earth elements essential to the production of the permanent magnets needed not just for wind turbines, but for EV motors as well. Electricity networks also need a huge amount of aluminum, while copper is crucial to all electricity-related technologies.

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Yet, today’s mineral supply and investment plans fall short of what’s needed to transform the energy sector, risking delayed or more expensive energy transitions. In many countries, NIMBYism is delaying new investments in extraction.?In the US, for example, several lithium mines are in various stages of planning – but only one is operational. For those with permitting, it can take four to seven years to actually build the mine, with water and land usage remaining contentious.

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Can a club of like-minded countries and aligned geographies be a solution?

One promising outcome of recent consternation about supply constraints is that the EU and US are now considering joining forces to create common rules on how to organize the critical materials market, as widely reported in recent days. While such a club could prevent the EU and US from needless competition with each other, realistically it won’t do much to address larger issues around availability of critical minerals – at least in the short-term.

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A geopolitical minefield

Supply constraints + exponential growth in demand for critical minerals = big geopolitics. For now, extraction and processing for many critical materials are concentrated in a few countries, mostly not in the sphere of influence of democracies. This makes supplies vulnerable to political instability and polarization, export restrictions and natural disasters. This is especially true because the supply of many critical minerals is even more geographically concentrated than that of oil, gas and coal. One of the poorest and most volatile countries in the world, the Democratic Republic of Congo has to date produced more than 70 percent of the world’s cobalt, granting it almost a quasi-monopoly beyond that enjoyed by Saudi Arabia in oil. Mindboggling that the entire #electromobility revolution is for now largely reliant on that one country.

Even worse, geographical concentration for processing and refining minerals is even higher than their extraction. China processes 60?70 percent of the world’s lithium and cobalt, and as much as 90 percent of rare earth elements are also processed there (to convert them into oxides, metals and magnets). In addition, China ?dominates extraction and processing of graphite – a critical material for EV battery anodes.

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Too often overlooked: Mining emissions

Mining is responsible for roughly 4-7 percent of global emissions. However, when Scope 3 emissions are considered,?the industry’s footprint soars to up to 28 percent of global greenhouse emissions.?To reach net-zero, we need to simultaneously pursue several levers that can reduce emissions linked to the extraction, refining and recycling of minerals:

·??????When possible, switch to alternative materials?for making clean energy technologies, such as alternative chemistries for making EV batteries (see the example of Topsoe mentioned above) or for making permanent magnets without rare earth elements (for example, lighter, denser superconducting magnets could be used),

·??????Reduce material-intensity?in clean technologies by maximizing use of extracted minerals to mitigate increases in future demand.

·??????Increase reuse and recycling rates of critical minerals. While current recycling rates are around 32 percent for cobalt, 46 percent for copper and 60 percent for nickel, lithium and rare earths have recycling rates less than 1 percent. Japan is today a global leader in recycling of critical minerals, having learned the hard way that rare earths can be weaponized, as China demonstrated when it cut off all exports to the country over a fishing trawler dispute.

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The EU Critical Raw Materials Act: Priorities and Milestones

As I’ve said further up, the EU Critical Raw Materials Act is expected to be unveiled next month. Here’s some of the priority issues that I hope will be addressed:

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• Analyze the role and potential of critical mineral substitution, especially for those minerals facing acute supply risks. This includes investments in R&D to use substitute materials (e.g., different battery chemistries, as lithium iron will not answer all EU needs) and to reduce mineral intensity for a particular use (e.g., using superconductors may reduce the need for copper as more power will flow through this asset compared to current transmission lines). Additional investments will also be needed in critical mineral recycling, which requires revision of waste regulations as critical materials are often considered hazardous waste.
• Establish an EU observatory for critical metals that combines real-time data and collective intelligence from industry and government.
• Analyze and project the amount and types of minerals required for each clean technology (batteries, wind, solar PV, etc.), then develop a roadmap that can be shared between industry and the public sector on what needs to be done, when and by whom. It will be a herculean task to secure all the critical minerals that Europe needs to be successful and leading in the clean energy transition. It will therefore be of critical important that all the ‘dots are aligned’ and key actors be able to course-correct quickly in case supplies dry up, fundamental dynamics change (think of wars), ec.
• Create a public-private investment fund (perhaps as part of the forthcoming Sovereignty Fund) in strategic metals for the energy transition. This fund’s objective would be to help secure supplies for European manufacturers by acquiring stakes in companies and/or setting up long-term supply contracts with industrial operators sitting upstream in the energy transition value chain (mining, refining, primary processing, recycling).[JB1]
• Develop a norm and/or label defining “responsible mining” in terms of its environmental (water, pollution, biodiversity, GHG) and social impacts. A similar endeavor is underway in batteries, which can serve as a blueprint for other products and/or sectors. If Europe wants to drive a race to the top, clean, sustainable and responsible value chains must be a foremost priority.
• Encourage and reward demand reduction. Just like incentives can be provided to encourage demand creation, similar mechanisms can be used to drive demand reduction.

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The more I learn about critical minerals, the more I understand the sheer magnitude of the challenge. And the stakes are high: Europe’s ability to succeed in the clean energy transition lies largely outside its hands if you take into account all of the above. And in the absence of breakthrough technology advances and innovation, we may well be exchanging one dependency – on (Russian) fossil energy – for another. At a minimum, this requires us to have our ‘eyes wide open’ as I used to say when I worked in public policy, replacing ‘wishful thinking’ with ‘strategic thinking’.

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That’s a wrap for Day 9 of?#unshackle?#eu?#cleantech

#greendealindustrialplan?#netzeroindustryact

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