01/11/2019
Metals in the low-carbon energy transition – how do they affect geopolitics?
Dependence on energy and its great economic value give the sector geopolitical significance. The quest for energy security, which can be understood as having a well-functioning supply of energy at affordable prices, plays a central role in the policies of most countries. Economies with large energy resources – such as those of Saudi Arabia, Qatar and Russia – depend on demand for their energy resources at prices that are stable and sufficiently high.
The fossil fuel-based energy system significantly contributes to environmental and climate problems. In many countries, this issue is emerging as the most important factor affecting energy policy. Ambitious, climate-driven energy policies will certainly affect the geopolitics of energy.
Key Findings
- Ongoing expansion of renewable energy increases the demand for metals such as lithium, cobalt and rare earths.
- At present, production of some of these metals is concentrated in a small number of countries.
- Expanding renewable energy systems will require continued mining of these metals for many years to come.
- However, over the long term, increased recycling can reduce producers’ market power, environmental impacts, and conflicts with other land uses.
- In terms of their economic value, these metals will represent a smaller portion of the economies in metal-rich countries than has been the case for the economic share of fossil fuels in countries where such resources dominate.
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