All eyes on critical minerals, please, Energy News, ET EnergyWorld

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As G20 leaders go down to business in New Delhi, a great deal of attention will be on how they collectively and collaboratively push the needle on tackling challenges in a world rife with geopolitical tensions and competition. Considering that the Delhi summit is taking place as the world experiences its hottest summer yet, it is not unreasonable to expect the leaders of the world’s largest economies to chart a course for tackling what arguably poses the most significant risk to their economies: climate change.

The world has witnessed the wrangling over committing to a ‘phase-out’ of fossil fuels, even though science unequivocally tells us the urgent need to do so. There has been a pushback by some countries on reiterating past commitment to ‘phasing-down’ unabated coal, which means coal power plants without carbon capture and storage technology equipment.

There has been ambivalence around setting an ambitious target of tripling global renewable energy capacities and doubling energy efficiency targets. Hopefully, many of these issues will be addressed at G20 and discussed threadbare over this weekend.

What is irrefutable is that the pace and success of the energy transition that the world needs rests on the equilibrium between fossil fuels phase-out and non-fossil fuels phase up. An equilibrium that makes possible what several G20 leaders, most recently French President Emmanuel Macron, have stressed: climate action cannot be at the cost of development.

The fulcrum of this argument rests on several elements: while finance and technology are important, critical minerals such as lithium, cobalt, nickel and copper are the most significant. These minerals help power EVs, wind turbines, solar panels and similar devices that help the world transition to clean energy.

Discussions on critical minerals have focused on securing access and supply chains. This is evident in the outcome document of the Energy Transitions Ministerial Meeting recently held in Goa, too. It emphasises a ‘need to maintain reliable, responsible and sustainable supply chains of such critical minerals and materials’.

The transition to a net-zero economy demands an exponential demand increase for critical minerals. The International Energy Agency estimates that achieving the global goal of net-zero energy systems by 2050 would require six times more mineral inputs in 2040 than today.

If the energy transition has to deliver development and environmental goals, it must recognise the importance of addressing the governance of critical minerals, even though there is a supply crunch. In his address at the B20 summit, Prime Minister Narendra Modi warned of the consequences of failing to deal with the governance of critical minerals. ‘If those having it do not see it as their global responsibility, it will strengthen a new model of colonialism,’ he said.

There is a need to expand responsibility to avoid the experience the world had while allowing resource extraction, mining and deforestation. The fossil fuels phase-out must be linked to aligning critical minerals extraction and production to long-term development objectives, transparency of contracts and licensing, and disclosure of final beneficiaries and setting up guard rails to avoid corruption risks.

In Delhi, G20 leaders must put down in clear language that they recognise that the governance of critical minerals is central to the meeting, accelerating the objective of fossil fuels phase-out and ensuring that the transition is just, fair and equitable. Such a declaration will serve as a placeholder for discussions on the governance of critical minerals in future G20 meetings.

Views expressed are author’s own

  • Published On Sep 9, 2023 at 08:01 AM IST

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