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Tag: critical minerals

  • GREEN HYDROGEN: THE PROMISE IS REAL. SO ARE THE CHALLENGES

    The green hydrogen industry, once buoyed by early optimism, is now facing significant challenges. Many projects in Europe and the US have either stalled or been delayed. In the US, regulatory uncertainty and in Europe, bureaucratic hurdles and insufficient funding are slowing progress. Earlier this year, the European Court of Auditors highlighted that the EU’s hydrogen goals face feasibility challenges. A McKinsey report states that 18% of North American and 5% of European clean hydrogen projects planned for 2030 have reached a final investment decision (Hydrogen Council).

    While progress in the US and EU is measured, emerging markets like Saudi Arabia, Morocco, and Chile are rapidly advancing their green hydrogen ambitions, leveraging abundant renewable resources and supportive policies. Yet, to sustain this momentum, these regions must overcome critical barriers, most notably water scarcity and material constraint – factors that will ultimately shape the viability of green hydrogen globally. Overcoming these challenges will require innovation in water efficiency, alternative materials, and recycling. Though progress is promising, these constraints remain central to the industry’s ability to scale effectively.

    A PARCHED PATH: WATER AND ENVIRONMENTAL HURDLES

    The production of green hydrogen through electrolysis is water intensive. The production through electrolysis proportionally requires about 9-14 litres of water per kilogram of hydrogen, with additional water for purification and cooling, bringing total consumption to 20-30 litres per kilogram, depending on electrolyser efficiency, water quality, and cooling systems.  This reliance on water exacerbates existing pressures in water-stressed regions. A growing global concern. For example, Saudi Arabia, home to the NEOM Green Hydrogen Project, despite its abundant renewable energy, faces severe water scarcity. Green hydrogen production, requiring significant water for electrolysis, poses a challenge in this “hyper-arid” environment (The Forum ERF).

    In Saudi Arabia, the NEOM project seeks to tackle the challenge of securing sufficient fresh water by relying heavily on desalination, an energy-intensive process requiring 4 to 5 kWh per cubic meter of water (UNEP). While renewable energy sources are used to power some desalination, the energy demand remains high, and the associated costs could undermine the economic feasibility of green hydrogen production in such a water-scarce region. In some markets, this could also divert renewable energy from the grid, limiting availability for other sectors.

    Additionally, the disposal of brine, a byproduct of desalination, presents environmental risks, particularly in marine ecosystems (UNEP). In Oman, for instance, desalination plants are facing challenges related to the high salinity of brine discharge, which negatively impacts coastal ecosystems (IEA).

    Morocco and Chile are also emerging as global hubs for green hydrogen production and face significant challenges due to water scarcity. Both countries are leveraging their abundant solar and wind resources, making them ideal for electrolysis-based hydrogen production, but their water resources are constrained. In Morocco, agriculture accounts for 88% of total water use (The World Bank), while in Chile, the Atacama Desert is among the driest regions on Earth, competing for water between mining, agriculture, and industrial use (IWA).

    Nevertheless, international partnerships, pilot projects, and growing market demand are accelerating the development of green hydrogen ecosystems in both countries. Morocco’s Green Hydrogen Strategy aims to produce 4 million tonnes of green hydrogen per year by 2030 (netzerocircleorg), while Chile is positioning itself as a key player in global hydrogen exports, with several high-profile projects in the pipeline (gh2org). Yet, both countries will need substantial investment in infrastructure, including water-efficient technologies and low-energy desalination methods, to ensure that green hydrogen production remains both sustainable and economically viable.

    To mitigate these challenges, green hydrogen projects need to focus on efficient water use and adopt innovative solutions like closed-loop water systems, which recycle water used in electrolysis, minimising overall consumption (Xylem). Furthermore, the development of low-energy desalination technologies, such as reverse osmosis and electrodialysis, can help reduce both the energy consumption and cost of desalination, making it a more viable option (Veolia). New desalination techniques could reduce energy costs by up to 30% compared to traditional methods (IEA-OES).

    While these solutions offer potential, the competition for water in already-stressed regions cannot be overlooked. To ensure sustainability, hydrogen production must be planned strategically, prioritising regions where water use can be balanced with local needs, especially in areas already facing severe water scarcity.

    As green hydrogen scales up, these projects should be designed to minimise strain on limited water resources and ensure access to water for essential uses, including agriculture and drinking water.

    A PRECIOUS STRAIN: MATERIAL DEPENDENCE AND COSTS

    The green hydrogen industry also faces challenges from its reliance on scarce and costly materials like iridium and platinum, essential for electrolyser production. Iridium, with a global output of just 8–9 metric tons annually, is a by-product of nickel and copper mining (Enapter) and one of the most expensive elements, with prices driven by demand from electronics, aerospace, and automotive sectors (SFA Oxford). Platinum, though more abundant, has seen prices rise over 400% in recent years due to high demand from industries like automotive (catalytic converters), jewellery, and industrial applications (Platinum Investment).

    As the green hydrogen sector grows, reliance on rare metals for proton exchange membrane (PEM) electrolysis could become a bottleneck. PEM electrolysers require 300 to 400 kg of iridium per gigawatt (GW) of production capacity (Heraeus). With global PEM electrolyser capacity potentially reaching 30 GW, iridium supply is already stretched, and current production rates do not meet the forecasted demand. IRENA projects 5,700 GW of electrolyser capacity by 2050. As of 2023, global capacity was 1.4 GW, expected to reach 5 GW by 2024.

    To address supply constraints, researchers are exploring alternatives to iridium and platinum, such as non-precious metal catalysts (NPMCs) and metal-organic frameworks (MOFs), to reduce material dependence and costs in hydrogen production (MDPI). Recycling could also alleviate pressure on the iridium supply, but extracting iridium from electrolyser components presents technical challenges. Efficient recovery requires advanced technologies, and cost-effectiveness must be assessed against savings from reduced reliance on primary iridium. Supportive regulations are also necessary to incentivise recycling and ensure environmental sustainability (Johnson Mathey).

    Alkaline electrolysers use nickel, relative to iridium, as a more cost-effective option for large-scale hydrogen production. While widely used for this purpose, they are increasingly being outpaced by PEM electrolysers, which are better suited for smaller-scale, modular applications. As demand for green hydrogen increases, PEM technology is preferred for fuel cell vehicles and industrial processes. Both alkaline and PEM electrolysers offer unique benefits and drawbacks, with the best choice depending on specific use cases and operational needs (Idetechex).

    Reducing material dependence and managing supply chain complexities are key to scaling green hydrogen production. Strategic investments in alternative materials, advanced recycling, and diversified electrolyser designs are crucial to addressing resource bottlenecks limiting growth.

    ON BALANCE

    Water scarcity and material demand are real challenges for green hydrogen but not insurmountable. With enough time and investment, solutions such as improved water management, recycling, and alternative materials can address these issues.

    However, the greatest barrier is not the challenges themselves, but the time and financial resources required to overcome them. As green hydrogen aims to integrate with established clean technologies like wind, solar, and battery storage, its ability to compete will be shaped by the availability of these critical resources.

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  • From Washington to Westminster – The Weight of Choices

    I am struck by the vibrant energy that fills the air this autumn in Washington DC. It is after all a season of change, and the atmosphere reflects the weight of the choices ahead. With the US elections just days away, many are calling it one of the most consequential elections in modern history. The outcome will not only shape US domestic policy but will also have far-reaching implications for international relationships, particularly for us in the UK. Potential policy shifts under either a Harris or Trump administration will significantly influence the UK’s energy security, critical mineral access, and climate finance.

    1. Green Industrial Policy and the Energy Transition

    A potential Harris administration is expected to extend President Biden’s pro-climate agenda, prioritising international partnerships and green investment. The US Inflation Reduction Act (IRA), with an allocation of USD369 billion over ten years to renewable energy and climate initiatives, signals this commitment. A Harris administration would create stronger opportunities for transatlantic investment, supporting UK growth in renewable sectors like offshore wind, hydrogen, and battery technology. If this momentum continues, the UK government could look to joint initiatives with the US, easing access to funding for green projects and making significant progress toward the UK’s 2050 net zero target.

    However, under Biden the IRA has faced criticism from some manufacturers and international trading partners for its reliance on domestic supply chains, which could limit the availability of components needed for the UK projects, Should this happen, the UK may have to seek alternative sources, complicating the UK’s green transition.

    A Harris administration is expected to support favourable trade policies for green technologies, facilitating UK imports of renewable technology components. This could support efforts by the UK government to make US-UK trade in renewables more accessible and reducing reliance on non-allied suppliers for clean tech components.

    If Donald Trump is re-elected, his previous administration’s affinity to roll back environmental regulations could limit the UK’s potential for US green investment. Trump’s policies have historically favoured fossil fuels over renewables, raising concerns about long-term climate commitments and support for developing green industry and infrastructure at home and abroad.

    Trump’s protectionist stance could make UK trade in green technologies more expensive, as seen in past tariffs on steel and aluminium. If a similar approach extends to critical minerals, the UK government may need to counter these costs by increasing subsidies for UK-based manufacturers of renewable technology, reducing dependency on high-cost imports. This could mean allocating a significant portion of the budget to incentivise local clean tech industries, creating a more resilient domestic green economy.

    2. Critical Minerals and Securing Supply Chains

    A Harris administration would likely focus on secure allied supply chains, such as through the Minerals Security Partnership (MSP), facilitating UK access to critical minerals. Resources like lithium are fundamental for the UK’s electric vehicle (EV) and renewable sectors, making it essential for the UK to consider increasing funding for mineral procurement partnerships in its budget. Joint ventures in processing and securing critical minerals would reduce UK dependency on China, ensuring a stable supply chain for technologies central to the energy transition.

    However, reliance on US exports could still pose risks if protectionist measures are enacted, The UK may need to diversify its mineral supply sources further to mitigate these risks.

    In contrast, Trump’s policies may lean toward domestic production and a protectionist approach, potentially restricting US exports of critical minerals. If faced with limited US supply, the UK may need to further  strengthen alternative partnerships with Australia or Canada, to secure these essential resources. This would likely require the government to allocate a larger portion of spending for mineral sourcing and develop incentives for UK-based mineral processing industries, shielding the country from possible US export restrictions.

    3. Climate Finance and International Commitments

    Harris’s anticipated support for international climate finance aligns with the UK’s goals, allowing the UK government to potentially allocate matching funds for green development projects. With US contributions to international climate funds, such as the Green Climate Fund, a Harris administration would enable the UK to access additional financial support for green infrastructure projects, making ambitious UK initiatives more achievable.

    Nevertheless, any cuts to these funds would require the UK to reassess its climate financing commitments and potentially adjust budgetary priorities.

    Trump will deprioritise US climate finance and has promised to withdraw once again from the Paris Agreement. Upholding UK leadership in climate finance will require budget adjustments to support global climate initiatives. Such a shift would likely place additional financial pressure on the UK government .

    Chancellor Reeves’ Autumn Budget on October 30 will be an initial opportunity to prepare the UK for potential US policy changes. Under a Harris administration, the UK government could strengthen the UK’s renewable energy goals through increased US cooperation in critical minerals, green technology, and climate finance, minimising the need for heavy domestic spending. And a Trump administration would likely prioritise US energy independence and domestic production, requiring the UK to allocate more resources to self-reliance in minerals, energy security, and green tech investment. This scenario would demand a more robust fiscal commitment to secure the UK’s energy transition and climate objectives.

    #USelection2024 #UKbudget2024 #energytransition #netzero #criticalminerals #climatefinance #greeninvestment #industrialpolicy #supplychain

    References: U.S. Department of Energy –  Critical Minerals Policy, The White House – Section 232 Tariffs Impact on Metals., UN Climate Change Conference. U.S. Climate Finance Commitments and Green Climate Fund Pledges.,Bloomberg New Energy Finance, Columbia SIPA – Center on Global Energy Policy, Reuters, Financial Times. Image credit: Linkedin image generator

  • Balancing the Fragility of Energy Security and Uranium Supply

    Amid rising demand and high prices, Kazatomprom has been forced to announce a reduction in their 2025 uranium production target by 17% due to project delays and a severe shortage of sulphuric acid, a critical component for uranium extraction. The announcement raises significant concerns about potential global supply shortages and increased prices for nuclear fuel. Key risks and implications of the Kazakh supply reduction include:

    1. Supply shortages and increased prices, disruption to the nuclear supply chain.

    2. Higher uranium prices could make nuclear power less competitive, affecting investment and development.

    3. Disruptions from major producers like Kazatomprom could have substantial geopolitical effects, especially for countries reliant on nuclear energy.

    Concentration of #uranium supply

    The uranium supply chain is notably concentrated in a few countries: Kazakhstan, Canada, Australia, and Namibia, which collectively produce over 60% of the world’s uranium. Kazatomprom’s recent production cut, driven by project delays and a sulfuric acid shortage, could exacerbate market tightness. Analysts at Canaccord Genuity predict that Kazahk output might fall from the current level – from 30,000 to approximately 23,000 tonnes, further straining the already fragile supply chain.

    Vulnerability in nuclear supply chains

    Kazatomprom’s production reduction further highlights the nuclear sector’s reliance on a limited number of key suppliers. The ongoing global energy crisis, compounded by geopolitical tensions such as Russia’s invasion of Ukraine, underscores the vulnerability of energy supply chains.  Shortages in the nuclear supply chain of one sector, even of secondary resources like sulfuric acid, can disrupt the global nuclear sector at least for short periods of time and potentially reduce the perceived reliability of the sector relative to alternative energy sources.

    Geopolitical and Strategic Considerations

    Kazatomprom is also a key factor in another geopolitical vulnerability, which is the close relationship with Russia, which controls nearly 50% of the world’s uranium enrichment capacity.  Russia is closely integrated with Kazakh uranium suppliers through feedstock purchases and investment by Russia’s state nuclear champion, Rosatom in uranium reserves. The close Russian relationship with Kazakhstan introduces strategic risks for Western countries reliant on nuclear power.

    The Need for Strategic Resilience

    The current challenges underscore the necessity for strategic resilience in the nuclear industry. To mitigate these vulnerabilities, the industry must focus on:

    1. Expanding uranium production in regions like #Canada, #Australia, and #Namibia can help address supply shortages. However, these investments require substantial time, capital, and regulatory navigation.
    2. Enhancing global energy security crucial for long-term stability depends on international collaboration to stabilise uranium supplies and reinforce market stability.

    The global energy system relies on a robust, diversified, and well-managed uranium supply chain. As nuclear power expands, ensuring a stable uranium supply is crucial for the sustainability of the global energy transition.

    #nuclearenergy #uranium # energy security

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  • Exploring the Complexitiesof Europe’s Lithium Future

    Summary:

    • The EU relies heavily on China for lithium, threatening its clean energy goals. The Jadar mine in Serbia could reduce this dependence.
    • The mine boasts a high production capacity, potentially fulfilling 17% of Europe’s future EV lithium needs and boosting Serbia’s GDP.
    • Serbia’s EU accession bid would be bolstered by the project’s success. Although, China and Russia may continue to influence Serbia to remain outside the EU.
    • Strict environmental regulations and responsible mining practices are crucial to gain public trust and avoid environmental damage.
    • The Jadar mine is a critical test of balancing economic benefits with environmental responsibility in securing a sustainable European battery supply chain.

    Serbia’s revival of the Jadar lithium mine project, set to be Europe’s largest, goes beyond mere economic considerations. It ignites a debate on environmental responsibility, geopolitical influence, and the future of the European battery supply chain. This article examines the project’s potential impact on the EU’s strategic goals for lithium dependence reduction and analyses the complex interplay between economic benefits, environmental concerns, and geopolitical manoeuvring.

    The European Union (EU) faces a critical vulnerability – its overreliance on China for lithium, a vital component in electric vehicle (EV) batteries. A 2021 European Commission report reveals that the EU imports 80% of its refined lithium from China. This dependence exposes Europe to price fluctuations dictated by China and potential supply chain disruptions, endangering the continent’s ambitious clean energy transition goals.

    The Jadar mine boasts impressive figures that could be a game-changer for the EU’s strategic autonomy. Here’s a breakdown of its potential impact:

    • Estimated to produce 58,000 tons of lithium carbonate equivalent (LCE) per year.
    • This production capacity is projected to fulfil the lithium needs for 17% of Europe’s forecast EV production in 2030.
    • The project is estimated to contribute €10bn-€12bn annually to Serbia’s GDP.

    Its potential significance is underscored by the urgency of the EU’s strategic needs. A deeper dive into the data highlighting Europe’s lithium conundrum:

    • The EU’s lithium demand is projected to grow 14 times by 2030 compared to 2020 levels. This exponential growth fuels the EU’s ambitious electric vehicle transition plans.
    • The EU aims for domestic battery cell production capacity to reach 400 GWh by 2025 (and four times more by 2040). However, this ambitious target centres on a secure and stable supply of lithium, a critical component missing from the equation currently.
    • Recognising its current vulnerability, the EU enacted the Critical Raw Materials Act in 2023. This act stresses on diversifying supply chains and aims to secure at least 25% of its lithium needs from domestic sources like recycling by 2030. The Jadar mine, if successfully developed, could be a key piece of this puzzle.

    The revival of the Jadar project coincides with Serbia’s renewed push for EU accession. Serbia has been a candidate country for EU membership since 2012, but progress has stalled due to concerns about the rule of law, corruption, and its ongoing dispute with Kosovo. The Jadar project presents an opportunity for Serbia to demonstrate its commitment to the EU’s strategic goals and environmental standards, and in doing so potentially strengthening its accession bid.

    China has become a major investor in the Balkans, with a focus on infrastructure projects. A recent report, from the European Parliament in 2022, estimates that China has invested over €32 billion in the region between 2009 and 2021. This economic influence gives China significant leverage in the Balkans, and Serbian coordination with the EU in Jadar could be seen as a challenge to China’s growing presence.

    Russia also maintains close ties with Serbia, particularly on issues related to Kosovo. EU involvement in Jadar could similarly be interpreted as an attempt to weaken Russian influence in the region, potentially creating tension between the EU and Russia. The success of the Jadar project relies not only on environmental responsibility and economic viability but also on careful navigation of this complex geopolitical landscape. So how will Serbia navigate these challenges?

    While Serbia promises strict environmental standards, environmental groups remain understandably skeptical. Public trust depends on transparency and adherence to the highest environmental standards, ensuring responsible mining practices and mitigating potential risks like water pollution and land degradation. Lessons also must be learned from past environmental controversies surrounding Rio Tinto, the project developer.

    The Jadar mine presents a microcosm of the global challenge of balancing economic development with environmental responsibility in the clean energy transition. Europe urgently needs to diversify its lithium supply chain, but not likely at the cost of environmental degradation.  Can Serbia balance economic benefits with stringent environmental regulations?  How will the project navigate the existing investments of China and Russia in the region?

    The Jadar mine serves as a real-world test of balancing the security of supply with environmental responsibility.  Only through careful consideration of all factors can stakeholders determine if this project paves the way for a secure and sustainable European battery supply chain. The world will be watching closely.

    #criticalminerals #lithium #jadar #geopolitics