McKinsey & Company has released a report showing an expected increase in materials demand for renewable energy technologies, and it cites the need for shifting demand patterns, amplifying breakthrough technologies, and implementing policies which allow for scaling-up supply.
Materials, such as nickel, cobalt, and rare-earth minerals, are crucial in achieving a net-zero transition. According to the International Energy Agency, a typical electric car requires six times the mineral inputs of a conventional car, and an onshore wind plant requires nine times more mineral resources than a gas-fired plant.
As the demand for many minerals and metals used in low-carbon technologies rises, the sector is expected to see shortages by 2030.
Such shortages would hinder decarbonization as customers would have fewer low-carbon options and price spikes would make clean technologies more expensive. As mineral deposits are highly concentrated in only a few countries, including China, Democratic Republic of Congo, and Indonesia, regional access to materials may be limited as well.
Proposed Actions for Scaling Up Supply, Facilitating Innovation, Implementing Policy
The report expresses the need for mining to accelerate beyond historical growth in order to meet the rapidly shifting market.
Investments in mining, refining, and smelting would need to increase by about $3 trillion to $4 trillion by 2030, and labor capacity will need to increase by about 300,000 to 600,000 mining professionals. 200 to 500 gigawatts of energy will need to be available by 2030 to power mining assets. The report also recommends shifting demand patterns in downstream industries to using technologies which are less materials-intensive.
Innovations in materials technologies should also be implemented, whether exploring material substitutes or enhancing recycling practices for new materials. Policies should promote streamlining permit procedures and work to safeguard regional security of supply.
While policy should certainly allow for mineral supply to meet the needs of a clean energy transition, environmental groups and communities express a need to regulate mining practices as a part of this process. Mining, even for clean energy materials, maintains an environmental cost, including damage to the excavated land, pollution, and water contamination.
Renewable energy production is needed for the net-zero transition, and the report emphasizes the crucial role of materials in this process. In order to achieve net-zero goals without excessive contribution to further environmental damage, though, innovations in mining practices and mineral recycling will need to be emphasized.
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