💎What role do critical materials play in the renewable energy transition?💎

This week the International Renewable Energy Agency (IRENA) published a major report on the geopolitics of the #energy transition, shedding light on the importance of critical materials in driving the transition to a #renewable energy future.

What is the role of critical materials in the energy transition?

☀️The transition to renewable energy will significantly increase the demand for several critical materials. IRENA has reviewed 35 lists of critical materials, revealing that 51 materials used for the renewables-based energy transition appeared on at least one list.

📉However, the supply and demand for these critical minerals are mismatched. The demand for critical minerals like lithium is high, but their supply is insufficient. This mismatch can slow down the energy transition process.

⛏The risks associated with the transition are not related to the scarcity of mineral reserves but rather to the limited capacity for mining and refining them. What opportunities does the energy transition present?

🇧🇴Developing countries often possess significant reserves of energy transition metals like lithium, nickel, and cobalt. However, production levels do not always match their resource potential. For instance, Bolivia has abundant lithium resources but contributes a small percentage to global supply.

⏳The so-called ‘resource curse’ can pose challenges for developing countries with abundant mineral resources. Limited infrastructure, technical expertise, and access to production factors hinder progress.

🏭Value addition, such as processing and refining, often occurs elsewhere, limiting economic benefits. Moving up the value chain can boost trade and local development.

IRENA’s report suggests that the renewable energy transition holds tremendous potential for economic development in developing countries. It is crucial to prioritize fair and inclusive growth, ensuring that the benefits are shared by all segments of society. An energy transition without equitable economic development is neither desirable nor viable.

Read the report here.

What are the key questions for the energy transition? How can we ensure that the energy transition brings #equitable economic development?