The energy transition is essential to combat climate change, but it also brings with it significant challenges in political, economic, social and environmental areas.

Political Effects:

• Dependence on critical raw materials (MPCs): The demand for lithium, cobalt, and rare earths has increased, leading to geopolitical dependence and concentration of suppliers in countries such as China and the Democratic Republic of Congo.
• Price Increase and Volatility: The increasing demand for MPC can drive up prices and lead to market instability.

Economic and Social Effects:

• Increase in energy prices: The transition can increase energy prices, affecting business profitability and household well-being.
• Impact on the oil, coal and gas industry: The decrease in demand for fossil fuels affects these industries, causing job losses and local economic decline.

Environmental Effects:

• Intensification of mining activity: The demand for MPC has intensified mining activity, generating pollution and affecting ecosystems.
• Biofuel production: It competes with food production, contributes to deforestation and can have a negative impact on climate change.

The energy transition presents significant challenges that need to be properly managed to minimise its effects. Effective measures, such as policy coordination, investment in infrastructure and the development of sustainable technologies, are crucial to achieving a just and sustainable transition in the long term.

Are you interested in learning more about these challenges of the energy transition?

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