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The Role of Critical Minerals in Clean Energy Transitions
IEEJ Global Webinar
Tokyo / Paris, 28 May 2021

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Context• Countries accounting for more than 70% of today’s global GDP and emissions have committed tonet-zero emissions, implying a massive acceleration in clean energy deployment• An energy system powered by clean energy technologies needs significantly more minerals, notably: Lithium, nickel, cobalt, manganese and graphite for batteries Rare earth elements for wind turbines and electric vehicles motors
 Copper, silicon and silver for solar PV Copper and aluminium for electricity networks

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The shift to a more mineral-intensive energy system
Minerals used in selected energy technologies
Transport(kg/vehicle)

Electric car
Conventional car
50100

150200250

4 000

8 000

12 000

16 000

20 000Power generation (kg/MW)
Offshore wind
Onshore wind
Solar PV
Nuclear
Coal
Natural gas

A typical electric car requires six times the mineral inputs of a conventional car, and an offshore windplant requires thirteen times more mineral resources than a similarly sized gas-fired power plant
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Context• Countries accounting for more than 70% of today’s global GDP and emissions have committed tonet-zero emissions, implying a massive acceleration in clean energy deployment• An energy system powered by clean energy technologies needs significantly more minerals, notably: Lithium, nickel, cobalt, manganese and graphite for batteries Rare earth elements for wind turbines and electric vehicles motors

 Copper, silicon and silver for solar PV Copper and aluminium for electricity networks• There is no shortage of mineral resources, but recent price rises for cobalt, copper, lithium and nickel
highlight how supply could struggle to keep pace with the world’s climate ambitions• An evolving energy system calls for an evolving approach to energy security; policy makers must
expand their horizons and act to reduce the risks of price volatility and supply disruptions

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Meeting climate goals will turbo-charge demand for minerals
Mineral demand for clean energy technologies by scenario
Mt 50

6xHydrogen

4030Electricitynetworks

4xEVs andbattery storage

20Index (2020 = 1)

Growth to 2040 by sector

Other low-carbon
power generation

102020

SDS

2040

NZE

WindSolar PV

50

42x

40
30

25x

21x

20

19x
7x

10

SDS: Sustainable Development Scenario
NZE: Net-zero by 2050 Scenario

Growth in the SDS, 2040 relative to 2020

Lithium Graphite Cobalt

NickelRareearths

Demand for critical minerals is set to soar over the next two decades as the world pursues net zero goals;
overall requirements rise by as much as 6 times, but individual minerals, led by lithium, rise even faster
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A major source of demand uncertainty: strength of climate policies
Range of projected demand under different scenarios and varying technology evolution trends, 2040 relative to 2020
Renewables- and network-related

60

STEPS
Series8
Base case50

Slow shift to high-Ni
Rise of ASSB
Rise of Si-Anode40

Rise of home storage
Rise of VFB30

Series7
SDS
Base case

20Slow shift to high-Ni
Rise of ASSB
Rise of Si-Anode

10

Rise of home storage

Index (2020 = 1)

Index (2020 = 1)

Battery-related
8Series8
STEPS
Base case

7

Comeback of CdTe
Rise of GaAs solar cell

6

Rise of perovskite
Constrained REE supply

5

Higher Al in grid
Rise of DC grid

4

SDSSeries7

3

Base case
Comeback of CdTe

2

Rise of GaAs solar cell
Rise of perovskite

1Constrained REE supply

Rise of VFB
Lithium
100 Cobalt
200 Nickel
300

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Graphite
400
500

Higher Al in grid
Copper
100 Silicon200 REEs
300
400

Rise of DC grid

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Clean energy in the driving seat for mineral demand growth
Share of clean energy technologies in total demand for selected minerals in the SDS
100%
80%
60%
40%
20%
2010

2020 2040
Lithium

2010

2020 2040
Cobalt20102020 2040
Nickel20102020 2040
Copper2010 2020 2040
Rare earth elements

As learning and economies of scale bring down other cost components, mineral inputs also account for an
increasingly large share of the total cost of batteries and other key clean energy technologies
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New reasons to go underground
Revenue from production of coal and selected energy transition minerals in the SDS

USD billion (2019)

2020

2030

2040

400

Rare earths
Silicon300

ManganeseGraphite

200

CobaltNickel100

Lithium

Coal

Energy transition
minerals

Coal

Energy transition
minerals

Coal

Energy transition
minerals

CopperToday’s revenue from coal production is ten times larger than from energy transition minerals.
However, in climate-driven scenarios, these positions are reversed well before 2040
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Many mineral supply chains lack diversity
Share of top three producing countries in production of selected minerals and fossil fuels, 2019

US

Natural gas

USFossil fuels

OilProcessing
Philippines

Oil refining

USLNG export

Qatar

Saudi Arabia
RussiaIran

CopperChile

CopperChina

NickelIndonesia

NickelChina

CobaltDRC

Rare earths
Lithium

Minerals

Minerals

Fossil fuels

Extraction

MyanmarPeruJapan

Cobalt

China

China

Lithium

China

Australia

Rare earths

20%

40%

60%

80%

100%

Finland
Belgium
Argentina
Malaysia

China

20%

40%

Estonia

60%

80%

100%

Production and processing of many minerals such as lithium, cobalt and some rare earth elements are
geographically concentrated, with the top three producers accounting for more than 75% of supplies
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A looming mismatch between mineral supply and climate ambition

3 200Lithium
kt

35

Copperkt of LCE

Mt

Committed mine production and primary demand (SDS) for selected minerals
400

2 400

300

25

1 600

200

20

800

100

30

15
2020

2025

2030

Production (operating)

2020

2025

2030

Production (under construction)

2020

Cobalt2025

2030

Primary demand in the SDS

Today’s investment plans are geared to a world of gradual change; given long leads times for newprojects, an accelerated energy transition could quickly see demand running ahead of supply
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Critical minerals do not undermine the case for clean energy
tCO2-eq per vehicle lifetime

Comparative life-cycle GHG emissions of a mid-size battery electric versus a conventional car
50
40

Fuel cycle (well-to-wheel)
Electricity

30

Batteries - minerals

20

Batteries - assembly and otherVehicle manufacturing10Gasolinefuelled car

BaseHigh-GHG minerals
Global average electricity mix (SDS)

BaseCleaner electricity

Battery electric vehicle

Even though mineral extraction is relatively emissions-intensive, on average the full lifecycle emissions ofan EV bought today are around half those of a conventional car
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IEA plan of action: a comprehensive approach to mineral security
Building on the IEA’s leadership role in energy security, these six key areas of action can ensure thatcritical minerals enable an accelerated transition to clean energy

1. Ensure adequate investment in diversified sources of supply
2. Promote technology innovation at all points along the value chain
3. Scale up recycling

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Recycling becomes a significant source of supply
Contributions from spent lithium-ion batteries from EVs and storage to reducing primary demand in the SDS
GWh 1 500

Amount of spent batteries

kt 1 500
Energy storage

1 200

Electric trucks

900

Electric buses

600

Electric two- andthree-wheelers

300

Electric cars
2020 2025 2030 2035 2040

Recycled and reused minerals
15%

1 200

12%

9009%

600

6%

300

3%
2030

CobaltNickelLithium
CopperShare oftotal demand(right axis)

2040

By 2040, recycled quantities of copper, lithium, nickel and cobalt from spent batteries could reduce
combined primary supply requirements for these minerals by around 10%IEA 2021. All rights reserved.

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IEA plan of action: a comprehensive approach to mineral security
Building on the IEA’s leadership role in energy security, these six key areas of action can ensure thatcritical minerals enable an accelerated transition to clean energy

1. Ensure adequate investment in diversified sources of supply
2. Promote technology innovation at all points along the value chain
3. Scale up recycling
4. Enhance supply chain resilience and market transparency
5. Mainstream higher environmental, social and governance standards
6. Strengthen international collaboration between producers and consumers

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Contact: report@tky.ieej.or.jp
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