Geopolitics of the energy transition: Critical materials
This paper explores strategic approaches for ensuring a sustainable energy transition by investigating the geopolitical aspects of critical materials including their supply chain, responsible efficiency, emergence of new technologies, their impact on labour rights, as well as suggesting ways to mitigate their risks and boost cooperation between countries.
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OVERVIEW
Trade, security and interdependence
The report details the key players in mineral and metal trading and introduces how critical materials play a significant role in a country’s socioeconomic and environmental security. It examines the geopolitical themes of trade, security and interdependence and how sustainability, communities and livelihoods must remain a focus.
Materials demand and supply
The anticipated scale-up of the demand and supply of critical materials worldwide is described in this chapter. The report identifies the risks and opportunities that arise in the context of the speed of a renewables-based energy transition. The chapter also discusses the efficacy of current supplies of critical materials and how dependent countries are on primary production, as well as export regulations in some countries.
The sustainability challenge
The third chapter reveals the impact of specific critical metals on labour rights, highlighting the importance of transparent and sustainable material supply chains. The chapter covers three areas under the broader term of human security: social, economic, and environmental. It emphasises the importance of emerging new technologies as a way to mitigate risks to communities and the environment while advancing the energy transition.
Policy considerations and the way forward
The last chapter is aimed towards policymakers, industry leaders, researchers and civil society actors. It provides a universal set of policy approaches to the challenges and opportunities presented by the scale-up of critical materials for the energy transition. This chapter also identifies cooperation between countries as key to establishing transparent and sustainable supply chains for critical materials. Additionally, the chapter touches on international standards and corporate social responsibility.
Environmental, Social and Governance (ESG) issues
The report analyses three main ESG impacts related to critical materials: labour rights, environmental impact, and materials supply chains. It emphasises the need for sustainable and transparent supply chains, addressing the risks that arise when supply chains are not transparent, which could result in unethical labour practices, harm to communities, and environmental degradation.
Recommendations
The International Renewable Energy Agency (IRENA) recommends several measures to ensure a sustainable energy transition, including adopting sustainable and transparent material supply chains, increasing cooperation between countries, and adopting international standards for critical materials, among others. The report highlights the importance of emerging technology and new material substitution pathways to mitigate environmental and social impacts.
