Europe’s plan to slash Russian fossil fuel imports and accelerate renewable energy production will test its ability to find the minerals, metals and other components that are needed for a dramatic shift to clean power.
The plan, outlined by the European Commission yesterday, would speed the continent toward a historic transition to wind and solar energy, while diversifying its sources of natural gas and expanding energy efficiency.
But it could come at a high cost.
The rapid switch to renewables will depend on Europe’s ability to mine or import the materials that are needed for clean energy technology, like copper, lithium and cobalt. And it comes as supply chains strain against rising demand for renewable energy globally.
“What we’re talking about doing is going from variable cost volatility on hydrocarbons to fixed-cost volatility on transition metals and minerals, going from the limitations on European domestic capacity to produce hydrocarbons to limitations on European domestic capacity to manufacture and deploy full value-chain renewables,” said Kevin Book, managing director of ClearView Energy Partners LLC.
“These are risk-shifting choices, and a lot of the details will matter,” he added.
The plan builds on a package of legislation that would reduce Europe’s greenhouse gas emissions 55 percent by 2030 and reach net zero by midcentury. It aims to accelerate renewable energy to 45 percent of the E.U. energy mix by 2030, up from 40 percent now. That would bring total renewable energy generation to more than 1,200 gigawatts within eight years.
If the E.U. achieves its near-term targets, the European Commission estimates that it would cut two-thirds of its current gas imports by the end of this year, with a goal to end them completely well before the end of the decade.
“Today, we are taking our ambition yet to another level to make sure that we become independent from Russian fossil fuels as quickly as possible,” said European Commission President Ursula von der Leyen.
Some experts say more details will be needed to determine whether those plans are achievable.
Europe could face shortages of the materials needed for its clean energy transition, or risk forming new dependencies on unsustainable suppliers, according to a recent report commissioned by the metals industry group Eurometaux and written by the Belgium-based research university KU Leuven.
It found that the E.U. target of zeroing out emissions by 2050 would require around 35 percent more copper and aluminum than it consumes today, and around 45 percent more silicon – a key component in solar panels. At the same time, lithium demand could grow by 35 times, to more than 800,000 tons, and as much as 26 times more rare earth elements will be needed. Cobalt and nickel demand could rise by 330 percent and 100 percent, respectively.
Those materials are needed to produce electric vehicles, batteries, wind turbines and solar panels – all of which are key to meeting Europe’s ambitious emissions-cutting targets.
An international energy strategy, also released yesterday, acknowledged those supply chain risks.
“While the EU is determined to end its dependence on Russian energy, it is equally determined to avoid new dependencies in the future,” the strategy states. “As demand for fossil fuels decreases, increased demand for raw materials, including rare earths and metals could lead to new supply challenges in the course of the energy transition.”
The E.U.’s plan comes as the world pushes closer to the temperature limits that scientists say could lead to irreversible climate impacts. Rising seas, greenhouse gas concentrations, and ocean heat and acidification all reached record highs last year, according to an annual report released yesterday by the World Meteorological Organization.
United Nations Secretary-General António Guterres responded to the report by calling for a massive infusion of renewable energy.
“We must secure, scale up and diversify the supply of critical components and raw materials for renewable energy technologies,” he said, pointing to how raw materials and supply chains for renewable energy technology are concentrated in a handful of countries.
“The renewable age cannot flourish until we bridge this vast chasm,” he added.
A race to source up
The E.U. energy strategy lists ways to avoid future trade dependencies by encouraging new mining and refining within Europe and by recycling scrap metals and waste. It also mentions the potential for strategic raw material partnerships and trade agreements with countries in Africa and Latin America.
One challenge, particularly for solar power, will be boosting production of solar panels and other components in Europe. While the E.U. plan offers funding to increase domestic production, it will be hard to overcome the competitive advantages that have pulled production from Europe and sent it to China and Southeast Asia, said Bram Claeys, a senior adviser at the Regulatory Assistance Project, a nonprofit focused on the clean energy transition.
When it comes to raw materials, Europe also has the ability to source some commodities domestically, including the aluminum and copper used in its electricity networks. But mining projects in Europe – as well as renewable build-outs like offshore wind – have faced opposition from local communities and green groups.
Timing, too, remains a challenge. New mines take years to be permitted and developed – if they ever are. Record-high energy prices could also limit the ability to refine metals used in clean energy technologies.
And on an accelerated scale, those delays matter.
“2030 is practically tomorrow in infrastructure terms,” said Book of ClearView Energy.
Even then, some of the minerals Europe will need most, such as cobalt, nickel and rare earths, will still need to be imported. And proposed due diligence rules that would require E.U. companies to avoid human rights abuses and environmental degradation through their supply chains could put some suppliers off limits.
Then there’s this barrier: Europe imports much of its copper, aluminum and nickel from Russia.
“Europe wants to diversify suppliers and accelerate the circular economy, to reuse and recycle materials in Europe,” said Claeys of the Regulatory Assistance Project.
Supply chain bottlenecks and geopolitical uncertainties could create additional challenges.
A recent report by the International Energy Agency shows that renewable power generation is on track to break global records this year. But its growth is expected to plateau in 2023, due to a lack of supplies and slow permitting.
Investing in tomorrow
The plan the European Commission presented yesterday expands on an ambitious proposal released in March that many observers said would be difficult to achieve so quickly (Climatewire, March 9).
A number of other strategies were also published alongside yesterday’s announcement.
One piece of the plan aims to double current solar power capacity to more than 320 gigawatts by 2025 and install 600 GW by decade’s end. It would also make rooftop solar installations mandatory on commercial and public buildings starting in 2025 and all new residential buildings in 2029.
In addition, Denmark, Germany, Belgium and the Netherlands pledged to increase their offshore wind capacity from 15 GW today to 150 GW by 2050, despite long permitting times that have slowed the pace of wind development.
The European Commission also recommended measures that would accelerate complex permitting processes and dedicate “go-to” areas for renewables with lower environmental risks.
“Abundant supply of raw and processed materials is essential for the energy transition,” Dries Acke, policy director at SolarPower Europe, said in an email. The group represents 260 organizations in the solar sector and has pushed for more investment in domestic manufacturing and the elimination of trade barriers to ease access to raw materials and components for photovoltaic solar production.
While some work has been done to identify which raw materials will be needed to meet Europe’s clean energy ambitions, “a further critical outlook on raw materials for E.U. solar, and their availability, is needed,” Acke added.
Recycling could help.
According to the KU Leuven study, local recycling of metals used in cars and wind turbines could provide Europe with up to 75 percent of its clean energy metal needs, but that won’t happen until after 2040. After that point, future growth would depend on Europe’s ability to invest in recycling operations now and prevent scrap metals from being shipped to other countries.
Workforce shortages are another problem – and one the E.U. plan would address through a skills training program.
“Installers across Europe, and in many markets internationally, report difficulty finding the skilled labor needed to build and install projects,” said Acke.
At the same time that the E.U. is boosting its ambition, some member states have increased their renewable targets. Germany now plans to meet 100 percent of its electricity needs with renewable sources by 2035, five years earlier than originally planned. And the Netherlands plans to double its offshore wind generation to nearly 22 GW by 2030.
Those moves will require more materials as other parts of the world are also clamoring for expanded renewable capacity.
Solutions are available, some experts say.
“Everyone is aware of the commodity cycle that we’re in right now and the price spikes that are there. And some of those price spikes can be alleviated by simple investment,” said Jon Creyts, chief program officer at RMI.
Regarding lithium, not enough capital has been invested to harvest it at the scale required, he said. That’s different than cobalt, of which there are concentrated reserves in a few places in the world, but all sorts of ethical and extraction concerns.
“So to the extent that governments are focused on those issues, it is about understanding and tracking the attributes and making sure that there is a fair trade around these minerals,” Creyts said.
“But more importantly it is about investing in the alternatives and making sure we can innovate our way out of a dependence on cobalt or nickel or some of the other metals that are right now significant constraints to the energy transition.”
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