The purpose of the study was to identify which geopolitical aspects may have an impact on the raw materials that are relevant to the energy transition that has been initiated in much of the world, and specifically in Europe. To this end, it first identifies which raw materials are relevant to the energy transition, and why they are so in terms of the energy transition; secondly, it identifies and explains the geopolitical aspects that may have an impact on these raw materials, whether in their procurement, supply, use or any other relevant aspect, and the risks that these aspects pose; it then points out possible alternative solutions to those already in place to eliminate or reduce the risks identified. The paper concludes with practical conclusions.
Identification of relevant feedstocks for the energy transition
The criticality of feedstocks refers to their availability, which becomes a supply risk, and vulnerability as a consequence of that risk.
Critical raw materials include tellurium, silver, cadmium, cobalt, copper, gallium, indium, lithium, manganese, nickel, nickel, tin and zinc. The EU has drawn up a detailed list of these.
Geopolitical aspects that may have an impact on commodities and the risks involved
1. Identifying key states
Determining which states are key states in relation to the relevant raw materials for the energy transition can be done by taking into consideration different criteria. In this paper, three criteria have been considered: states that are relevant producers of feedstocks; states that are relevant in the feedstock supply chain; and states that are relevant because of their potential ability to influence the actions of other relevant states.
2. Relevant producer states
Some states, among the most relevant producers, stand out from others because they produce more than 50% of the world's critical raw materials. Examples of this are the USA with beryllium, China with scandium and vanadium, Brazil with niobium, the Democratic Republic of Congo with cobalt and South Africa with iridium, platinum, rhodium and ruthenium. Other states that stand out among the most important suppliers to the European Union as they provide more than 50% of a given critical raw material are: China with bismuth, Kazakhstan with phosphorus and Turkey with antimony.
3. Relevant states in the supply chain
Within the supply chain of raw materials destined for the EU, certain states stand out for raw materials which, although they do not produce, they do refine. This is the case, for example, of China with lithium or light rare earths, of which it supplies 75% of those needed in the European Union. Other relevant states would be Kazakhstan for the supply of phosphorus to the EU (71%), Turkey for feldspar (51%), Spain for strontium (99%) or Guinea for bauxite (63%).
4. Relevant states in terms of their potential capacity for influence
In terms of economic capacity as the main cause of influence of one state over another, the United States and China stand out as the world's two largest economic powers. Some details of their geographical areas of influence are given in the document.
5. Reliability as a determining geopolitical aspect. Risks and consequences.
Reliability, understood as trust: trust that one state can have in another to obtain the raw materials it needs to carry out its energy transition. There may be other aspects, but this has been taken as the clearest.
Proposed alternative solutions
The purpose of this paper is to focus on additional solutions, but first, it is deemed appropriate to refer to technological neutrality as a prerequisite for finding and exploiting these solutions. Technological neutrality implies that legislation should focus on the objectives to be set, without imposing specific technologies and, in return, without discriminating against the use of any type of technology that is suitable and appropriate for achieving the objectives set.
1. Promotion of self-production
The promotion of self-production is one of the main proposals to achieve the energy transition. It focuses on ensuring security of supply of key raw materials from the state's own sources.
2. Circular economy
The circular economy is that model of production and consumption in which the value of products, materials and resources is maintained for as long as possible, and in which waste generation is minimised. This implies an extension of product life achieved by recycling, repairing, refurbishing, in short, treating existing materials and products as much as possible to create added value, all of which should result in facilitating the energy transition.
3. Alternative forms of growth
Alternative forms of growth refer to forms of growth that assume that there is a limited amount of natural resources available. These alternative forms of growth may be accompanied by a decline in global production, but not necessarily by a decline in overall welfare, but rather by a reduction in consumption that is unnecessary to achieve adequate welfare.
Conclusions
We believe that the main geopolitical aspect that may have an impact on critical raw materials for the implementation of the energy transition is reliability, understood as the confidence that one state can have in another to obtain the raw materials it needs to carry out its energy transition, with its risks and consequences.
This makes it seem prudent for states that are not relevant in relation to these raw materials (as is generally the case for EU Member States) to seek options that reduce or eventually eliminate their dependence on relevant states. These options can be considered as alternatives to others that are already being worked on, such as improving energy storage, energy efficiency and energy savings.
In any case, a major awareness-raising effort is needed at all levels to make these solutions a reality.
