Critical Metals in Strategic Energy Technologies - Assessing Rare Metals as Supply-Chain Bottlenecks in Low-Carbon Energy Technologies

Abstract

Due to the rapid growth in demand for certain materials, compounded by political risks associated with the geographical concentration of the supply of them, a shortage of these materials could be a potential bottleneck to the deployment of low-carbon energy technologies. In order to assess whether such shortages could jeopardise the objectives of the EU’s Strategic Energy Technology Plan (SET-Plan), an improved understanding of these risks is vital. In particular, this report examines the use of metals in the six low-carbon energy technologies of SET-Plan, namely: nuclear, solar, wind, bioenergy, carbon capture and storage (CCS) and electricity grids. The study looks at the average annual demand for each metal for the deployment of the technologies in Europe between 2020 and 2030. The demand of each metal is compared to the respective global production volume in 2010. This ratio (expressed as a percentage) allows comparing the relative stress that the deployment of the six technologies in Europe is expected to create on the global supplies for these different metals. The study identifies 14 metals for which the deployment of the six technologies will require 1% or more (and in some cases, much more) of current world supply per annum between 2020 and 2030. These 14 significant metals, in order of decreasing demand, are tellurium, indium, tin, hafnium, silver, dysprosium, gallium, neodymium, cadmium, nickel, molybdenum, vanadium, niobium and selenium. The metals are examined further in terms of the risks of meeting the anticipated demand by analysing in detail the likelihood of rapid future global demand growth, limitations to expanding supply in the short to medium term, and the concentration of supply and political risks associated with key suppliers. The report pinpoints 5 of the 14 metals to be at high risk, namely: the rare earth metals neodymium and dysprosium, and the by-products (from base metals) indium, tellurium and gallium. The report explores a set of potential mitigation strategies, ranging from expanding European output, increasing recycling and reuse to reducing waste and finding substitutes for these metals in their main applications. A number of recommendations are provided which include: \n•\tensuring that materials used in significant quantities are included in the Raw Materials Yearbook proposed by the Raw Materials Initiative ad hoc Working Group, \n•\tthe publication of regular studies on supply and demand for critical metals,\n•\tefforts to ensure reliable supply of ore concentrates at competitive prices,\n•\tpromoting R&D and demonstration projects on new lower cost separation processes, particularly those from by-product or tailings containing rare earths,\n•\tcollaborating with other countries/regions with a shared agenda of risk reduction,\n•\traising awareness and engaging in an active dialogue with zinc, copper and aluminium refiners over by-product recovery,\n•\tcreating incentives to encourage by-product recovery in zinc, copper and aluminium refining in Europe,\n•\tpromoting the further development of recycling technologies and increasing end-of-life collection,\n•\tmeasures for the implementation of the revised WEEE Directive, and\n•\tinvesting broadly in alternative technologies.\nIt is also recommended that a similar study should be carried out to identify the metal requirements and associated bottlenecks in other green technologies, such as electric vehicles, low-carbon lighting, electricity storage and fuel cells and hydrogen.