We are living in times of transformation towards green energy. The need for minerals to build the infrastructure for this transition is becoming increasingly important. To achieve the goal of limiting global warming to 1.5 degrees Celsius, we need to significantly reduce greenhouse gas emissions and increase the production of renewable energy technologies like solar panels, wind turbines, batteries, and electric vehicles.
This new green technology is far more mineral-intensive than traditional fossil fuel technology, and the International Energy Agency (IEA) estimates that mineral requirements for clean energy technologies quadruple by 2040 if countries take progressive measures to achieve the Paris Agreement goals. But even in a conservative scenario, demand will double. The chart reveals that the high demand in the progressive scenario is mainly driven by the expansion of batteries for energy storage and electric cars.
Green Tech production saves far more emissions than it releases
While building green tech infrastructure still generates some emissions, the World Bank estimates that through 2050, the emissions generated by renewable energy and storage technologies will only contribute approximately 16 gigatons of carbon dioxide equivalent (GtCO2e) of greenhouse gases. In comparison, coal and gas will generate almost 160 GtCO2e and 96 GtCO2e, respectively. Therefore, the emissions associated with building green energy infrastructure are far lower than those emitted by running fossil fuel plants.
Mineral resources are not scarce
Despite what some may believe, mineral resource scarcity is a myth. Known reserves of minerals, including rare earth elements (REEs), are much higher than the demand. Furthermore, economically viable reserves have been increasing for many energy transition minerals, even as production growth continues. Reserves are expected to continue rising with new exploration and detection methods.
However, to keep up with the increasing demand for minerals, investors and governments need to think ahead. The current lead times for new explorations are long, and reducing them will require substantial investment and governance help from wealthier consumer nations to poorer producing countries.
There is also a risk of resource dependency when there are only a few producers of a mineral. However, in a robust ecosystem of producers, a single country's production issues can be absorbed. But when there are only a handful of producers, any production problems can lead to rapid fluctuations in price. Nevertheless, resources are not so scarce and globally concentrated for most minerals. As rare earth explorations in Scandinavia show, more countries could consider becoming producers by exploiting new reserves.
Environmental problem is a real issue.
Lastly, there are environmental problems associated with mineral production. Technological advances have made it possible to mine lower-quality resources, but as the quality of minerals decreases, the emissions intensity of mining increases, and the amount of waste generated also rises. Additionally, the production of minerals like lithium, cadmium, and REEs can have detrimental effects on soil and water quality, as well as pose risks to miners and nearby communities. Concerted action and investment will be required to address these issues. Again, investment and governance assistance would be helpful primarily from wealthier consumer countries to poorer producer countries in the Global South. Moreover, countries can work together to ensure a more sustainable mineral supply chain by sharing information, investing in new technologies, and collaborating on mining operations. The African Union recently established the African Minerals Development Centre to help African countries manage and sustainably develop their mineral resources.
The global green tech transition presents significant challenges in terms of sustainable mineral sourcing. With concerted action and investment, these challenges can be overcome. It is critical that governments, investors, and the economy work together to ensure a sustainable mineral supply chain and build a greener, more sustainable future for generations to come.