Climate Chance Observatory
While global economic growth sets off again at full tilt, the disorganisation of logistics chains and the high demand for low-carbon technologies have led to a spike in the prices of metals that are strategic to the energy transition, to the point of generating shortages of essential electronic components and jeopardising production in some industrial sectors. To achieve the climate objectives of the Paris Agreement, guarantee their geopolitical independence and secure their material supplies, States and businesses are sharpening their elbows to create integrated industrial sectors, from mining to battery production.
- In this time of energy transition, the global competition for the raw materials needed for low-carbon technologies is intensifying.
- The meteoric growth in renewable energy production and the electrification of mobility has highlighted the geostrategic vulnerability of States and supply chains with regard to the concentration of resources, of the production and of the transformation of the metals required for low-carbon technologies (wind turbines, photovoltaic panels, electric cars, etc.).
- The economic recovery and the high demand for electronic goods have increased pressure on lithium, cobalt, nickel, rare earths and also semiconductors, which have been subject to high price inflation since the second half of 2020.
- Supply is failing to keep up with demand, and this is already resulting in supply deficits. Consequently, this imbalance could in the medium term jeopardise the transition of sectors whose decarbonisation depends on electrification and on electronics.
In order to strengthen their geostrategic autonomy and provide themselves with the means to achieve the objectives of the Paris Agreement, the European, American, Japanese and Indonesian governments are working to diversify their sources of supply and to shorten value chains by developing regional supply chains for the manufacture of low-carbon technologies. Held to account for their environmental and climate impacts, large mining companies are using mergers and acquisitions to increase the exposure of their business portfolios to the metals required for the energy transition. They are also creating bonds further downstream in the supply chains, where companies producing batteries and low-carbon technologies are seeking to establish long-term contracts for their raw material supplies.