Maya DeSouza
Circular Economy Director, Business in the Community
As we move away from using fossil fuels and rely more on renewable energy, the resilience of critical raw material supply chains will become more tested than ever.
Critical raw materials like lithium, nickel and tungsten provide the means to manufacture products — from batteries for phones and electric vehicles to engine parts. These materials are key to the net zero energy transition, as well as much of the technology sector.
Growing demand for minerals
In twenty years, global demand for the critical raw materials used in clean energy technologies is expected to be between seven and forty-two times what it is today.1 The war in Ukraine has shown that global supply chains are vulnerable to political events. For years, Russia has been a major supplier of critical raw materials like titanium, nickel and cobalt,2 while Ukraine is a supplier of graphite, manganese, iron and steel — some of which are critical materials.3
The war in Ukraine has made it harder to source critical materials, amidst warnings that the world could face a lithium shortage by 2025.4 China also controls the sources of large proportions of these materials which adds a geopolitical aspect to the situation.
In twenty years, global demand for the critical raw materials used in clean energy technologies is expected to be between seven and forty-two times what it is today.
Updating regulations
Policies will play an important role, with European governments — including the UK — exploring policy measures on resource efficiency such as eco-design and product passports as well as negotiating revised battery regulations.5 This policy development could lead to the introduction of material passports, which may show usable critical materials contained in products as well as outline their source and previous uses.
Companies like Everledger and Ford Motor Company have already begun to pilot battery passports, signalling the start of more circular business practices involving critical raw materials.6 These digital passports will enable reprocessors to source products containing the critical materials needed and also enable the traceability of batteries containing these materials.
There are many business opportunities in providing for greater circularity which will enable a switch to a more resilient economy. Collaboration along and across value chains will help scale up solutions and make these approaches financially viable.
[1] International Energy Agency, 2022 The Role of Critical Minerals in Clean Energy Transitions
[2] Middle East Institute, 2022. Ukraine’s critical minerals and Europe’s energy transition: A motivation for Russian aggression?
[3] IndustriAll, 2022. Ukraine Monitor: raw materials.
[4] World Economic Forum, 2022. The world needs 2 billion electric vehicles to get to net zero. But is there enough lithium to make all the batteries?
[5] Euractiv, 2022. Will Europe’s new battery regulation give it pole position?
[6] Smart Energy, 2022. Everledger and Ford release EV battery passport pilot for material recycling.
