What the future holds for the global energy transition in light of China’s role in supplying essential minerals for the renewable energy sector is a question that is now on the minds of the world. Globally, responsible sourcing of large quantities of minerals critical to the transition to low-carbon energy sources is in great demand. The consumption of these essential minerals, including nickel, copper, lithium and cobalt, is expected to increase exponentially in the coming years, due to their use in the renewable energy sector. According to the International Energy Agency’s Sustainable Development Scenario, demand is expected to quadruple by 2040 as countries act to limit global temperature rise to below 2°C; it should be multiplied by six in a netzero scenario. While a broad consensus has emerged between the United States of America, the European Union and China to increase the supply and the rate of production of the raw materials necessary for the energy transition to meet the challenge of change climate, meeting that demand has its own set of problems.
Producing these minerals in strict compliance with environmental, social and governance criteria will be ~to put it mildly~ critical if the ends are to be justified by the means. Researchers Rodrigo Castillo and Caitlin Purdy of Results for Development, a leading nonprofit global development partner, point to the fact that China is now the dominant player in global mineral processing. In a detailed report, they analyze how Beijing’s strategic position on critical minerals could evolve and the opportunities and challenges it represents for the energy transition given the country’s high level of engagement in global mineral supply chains. ores. According to them, two major factors are likely to influence the dynamics around a responsible supply of critical minerals for the energy transition. The first is China’s level of dominance over critical mineral supply chains. There are growing concerns that a high level of reliance on China for these minerals and their by-products could create energy security risks. Other countries, including emerging economies such as India, South Africa, Russia, and Brazil, apart from the US, EU, and China, are building their own blockchains. supply of critical minerals. This has created an element of uncertainty as to whether China will maintain its dominant position.
The second factor is the level of application of due diligence requirements in the Chinese mining sector and midstream and downstream industries to make these supply chains “cleaner” and “greener”. Beijing, of course, is extremely opaque on this point Although comprehensive and globally aligned due diligence requirements are needed to ensure that the supply of minerals needed for the energy transition does not cause or contribute to social negative environmental and environmental impacts, this is easier said than done since each nation-state must take care of its energy security needs.