How China Dominates the Elements of a Greener Economy

The dirty secret of the shift to a lower-carbon economy is that it will be really dirty: Creating the systems that underpin the transition will require digging up untold quantities of minerals.?Batteries that power electric vehicles?or store solar and wind energy depend on minerals such as lanthanide and silicon. A new generation of cars and electric grids will use millions of tons of?copper. Magnets in electric motors are made with so-called rare earths. And the myriad electronic sensors that will keep it all humming will gobble up vast supplies of rhodium and palladium.

The economics and geopolitics of the shift are messy as well. In the global race for many of these commodities, China has become the dominant supplier or processor. That’s helped shore up its position as the leader in producing electric vehicles and forced countries such as Germany, Japan and the US to rely on it for scarce resources. In response, the Biden administration is seeking to bolster American supplies with legislation that includes billions of dollars in?grants and tax incentives?for suppliers.

China’s Growing Dominance of Commodities

The country’s estimated share of global production for selected elements, 1990 to 2018

Data Source: US Geological Survey. Production refers to primary production or mine production. China doesn’t play a significant role in elements with no bars. Elements not assessed are shaded light gray.

Source: China's Carbon, Magnesium Dominance Will Shape Green Economy - Bloomberg