To win the battle against climate change, the world must undergo a dramatic shift in how we produce and use energy. The technologies enabling this transition require an increased supply of critical materials on an unprecedented scale.
If the United States is to remain a leader in the energy and automotive arenas, we must secure adequate supplies of the metals necessary to power the 21st century’s industrial revolution.
On Thursday, President Joe Biden will welcome as many as 40 world leaders to the White House for an unprecedented summit on climate change. High on the agenda are two key themes: Spurring transformational technologies that can help reduce emissions, and mobilizing public and private sector finance to drive the transition to net-zero emissions.
The route to meet climate change goals is clear: The mass adoption of electric vehicles and the global transition to renewable energy systems. However, the existing supply of metals needed for clean energy technologies is nowhere near sufficient, not in America nor across the world.
Even conservative projections for electric vehicle sales over the coming decade would require three times the total global cobalt supply and more than 15 times the amount of nickel currently required by EV batteries.
Tesla, for example, has talked about a target of selling 20 million vehicles a year by 2030, which would require more than three times the current total global lithium supply. And Tesla is only one manufacturer –– to meet the projected demand from all auto manufacturers worldwide, our supply of lithium would need to grow six times.
Over the last decade, the transformational technologies that can help reduce emissions have improved dramatically. It is now cheaper to produce electricity by solar and associated battery storage than by even the cheapest fossil fuels in every region of the U.S.
Electric vehicles are now more cost-effective over their lifespan, and performance is often better. These advancements have enabled many governments to make significant commitments –– nine European countries, including the United Kingdom and France, have announced bans on internal combustion engines by 2030.
U.S. policy is sprinting to catch up. President Biden’s American Jobs Plan admits that “America lags its peers – including Canada, the U.K., and Australia – in the on-time and on-budget delivery of infrastructure, and is falling behind countries like China on overall investment.” A key part of the plan is a $174 billion commitment to the EV market, including building half a million EV chargers by 2030.
In Europe, automotive giants are moving swiftly to electrify their fleets. By 2030, BMW expects half of its sales to be electric, and VW expects 70% of European sales to be electric.
In the U.S., Ford has doubled its financial commitment to EVs to $22 billion by 2025, and GM has pivoted heavily toward EVs with its Ultium battery brand and a commitment of $27 billion by 2025.
However, these commitments fail to address the limited supply of the metals and materials vital for this dynamic transition taking place, such as lithium, nickel and cobalt that are necessary for EV batteries, or rare earth elements required for the motors.
U.S. must rely on imports
In the past, the U.S. enjoyed a wealth of commodities within its borders, mining iron for cars and trucks and exploiting oil and gas for cheap gasoline and electricity. Now, America is in the precarious position of relying heavily on foreign imports to acquire vital materials for new technologies –– and commodities necessary to produce and maintain military equipment and national defense systems.
Biden’s recent executive order in support of resilient, diverse and secure supply chains is a step in the right direction, but the U.S. is already far behind. New resources do not suddenly come online –– it can take five to 10 years to develop a new mine and processing facilities.
So, what can be done? For the U.S. to compete effectively, the supply of minerals must become central to both foreign and domestic policy.
In addition to promoting domestic production, the U.S. must act quickly to work with the private sector to enhance supply chains among partners and allies.
U.S. International Development Finance Corporation’s investment in initiatives such as TechMet’s Brazilian nickel and cobalt project is a good start, but it is only scratching the surface. A critical piece of this effort is responsible sourcing; ensuring the highest standards of social and environmental operating practices in otherwise underdeveloped areas is an opportunity to broaden America’s impact beyond its climate goals.
China investing in key metals
Transitioning to renewable energy systems will reshape 20th century geopolitical power structures. China’s President Xi Jinping is rightly among those invited to Biden’s summit. Without China, global climate change efforts are futile, and China is far ahead of the U.S. in the race to secure technology metals.
China’s dominance is not sudden; it is the result of decades of successful central planning to secure the minerals required to develop technologies across strategic sectors such as energy, auto and defense. Securing the Li-Ion battery supply chain, for instance, has been a key part of the country’s industrial policy.
China may not have all the critical metal resources, but Chinese entities are significant shareholders in strategically important resources around the world. China has pursued a program of investment in mining and processing of battery metals for over 15 years, creating an entire ecosystem of supply for its battery factories.
The bottom line: the U.S. will need massive funding to transform its critical metals industry and ramp up global production to meet the impending demand of new technologies that will combat climate change.
If America fails to significantly increase the mining and processing capacity that it controls, the country risks losing its place on the global industrial stage in the future. Asserting renewed commitment to combating climate change and taking greater responsibility for its economic security interests depends on acquiring the materials that will keep the U.S. in the technology race.
The United States cannot afford to be a bystander in the most significant transformation of the global industrial and technological landscape since the invention of the steam engine.
Brian Menell is the founder, chairman and chief executive officer of TechMet, which builds projects that produce, process and re-cycle “technology metals” critical to EVs, renewable energy systems and energy storage.
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This article originally appeared on USA TODAY: Climate change summit: Why U.S. lacks resources vital for clean energy