The United Nations Conference on Trade and Development (UNCTAD) has published a series of papers under the ‘Commodities at a Glance’ banner to present accurate and relevant statistical information linked to international primary commodity markets.
Rather than merely serving economic means, an enhanced and broader understanding of commodities will be essential to combat climate change.
STRATEGIC AND CRITICAL RAW MATERIALS
Fossil fuel use is currently the primary source of anthropogenic GHG emissions, and it is increasingly appreciated that attempts to reduce fossil fuel-based energy emissions and mitigate effects on the climate will require a drastic switch to greener alternatives.
However, some of the raw materials used in renewable energy systems, as well as in key industries like health and defence, currently have few substitutes and are not widely globally distributed. They are defined as strategic and critical raw materials because they serve an essential function in the manufacturing of a product, the absence of which would have substantial consequences for a country’s economy or national security.
The list of these raw materials is not static as it evolves depending on technology advances, changes occurring in their global supply and demand, concentration of production, as well as current policy priorities.
The report notes that metals such as cobalt, lithium, manganese, copper, and minerals like graphite play a significant role in energy related technologies such as rechargeable batteries that are used in a variety of applications ranging from electronics to electric vehicles as well as in renewable energies such as wind and solar power. The market for rechargeable batteries, particularly for lithium-ion batteries (LIBs), is growing rapidly owing to its cost and efficiency advantages over other rechargeable battery types.
It has been largely driven by environmental concerns, a growing market for electric vehicles and support from governments. Rechargeable batteries open opportunities to boost supplies for the raw materials used in manufacturing them lithium, nickel, manganese, cobalt and natural graphite, but they also present challenges in ensuring that the raw materials are sustainably sourced given that their exploitation is often associated with undesirable environmental footprints, poor human rights and worker protection.
This growing demand also raises questions on whether there is enough supply of these raw materials – many of which are not widely geographically distributed in high concentrations and have low substitutability. The UNCTAD report suggests that policymakers can have a direct influence on the options highlighted to mitigate risks to supplies by facilitating research into new battery chemistries that rely less on critical raw materials, adopting recycling policies and providing a conducive environment to attract investment to establish new mines or expand existing ones.
The authors suggest this could alleviate the vulnerabilities of consumers to supply disruptions while ensuring sustainable mining practices can contribute to mitigating GHG emissions. By fueling the transition towards cleaner sources of energy, the production and use of the strategic metals discussed in this report can contribute to efforts to keep global temperature rise well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit temperature increase even further to 1.5 degrees Celsius as enshrined in the Paris Agreement.