Critical minerals - bottleneck in the energy transition?
The global transformation of energy systems towards more electrification and renewable energies is leading to a massive increase in demand for critical raw materials such as lithium, cobalt and rare earths. But can global supply chains keep up with this pace?
Exploding demand until 2040
According to the International Energy Agency (IEA) the demand for lithium could increase by more than 400 % by 2040 - driven primarily by the production of batteries for electric vehicles and stationary storage solutions. Cobalt and nickel are also indispensable for high-performance energy storage systems. The boom in solar, wind and hydrogen technologies is also increasing demand for rare earths such as neodymium and dysprosium.
Risks in the supply chain
However, supply is lagging behind demand. Geopolitical tensions, national export restrictions and increasing protectionism pose major challenges for the international supply of raw materials. A few countries - such as China for rare earths or the Democratic Republic of the Congo for cobalt - control large parts of the global supply. This concentration increases price sensitivity and undermines the security of supply for many industries.
Recycling - hope with hurdles
Recycling is seen as a promising strategy for alleviating supply bottlenecks. Research and technological development are progressing rapidly, particularly in the field of batteries. Companies such as Li-Cycle, Umicore or Redwood Materials are driving forward new processes for the recovery of rare metals. However, there is still a lack of scale, infrastructure and economic incentives to establish recycling as a genuine replacement for primary extraction.
What counts now: Strategies for resilience
Industrial companies and countries are faced with the task of diversifying their procurement strategies. This means tapping into new sources of supply in regions rich in raw materials, expanding strategic warehousing, regionalizing supply chains and securing partnerships with producers. With the Critical Raw Materials Act created the first framework conditions for more raw material sovereignty.
Conclusion:
Critical raw materials are not only a key lever for the energy transition, but also a potential Achilles' heel of the transformation. Companies must act now to ensure long-term resilience, sustainability and competitiveness.
Sources and further information:
- IEA Critical Minerals Outlook 2024
- EU Critical Raw Materials Act
- Benchmark Mineral Intelligence
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