Oct 22, 2024 07:07 PM IST
It is pertinent that India increases its R&D expenditure to study alternate technologies and substitute minerals and chemistries for clean energy equipment.
India has set a target of net zero emissions by 2070 as part of its ambitious climate change mitigation and adaptation strategy. There are several challenges in achieving the short- and long-term targets, including mobilising adequate investments, solving technical and operational challenges, and creating a just transition framework. Another imminent concern is ensuring resilient access to the requisite clean energy technologies, along with the raw materials and minerals required for their manufacture. Compared with traditional energy generation equipment, renewable energy devices, including solar, wind, and nuclear, require considerably large and diverse amounts of minerals. The same holds for electric vehicles when compared with conventional internal combustion engine vehicles, and the batteries required for energy storage and mobility.
As several countries move towards net zero emissions over the coming decades, the demand for minerals for the clean energy transition is expected to rise manifold. As setting up new mining operations is a time-consuming process, the evident sharp increase in demand would result in price spikes and non-availabilities of minerals, which may slow down the transition. As a result, many countries have devised strategies to ensure resilient supplies of these critical minerals most essential for their economies. A 2023 study by CSEP quantified the economic importance (how important is the mineral for the industry?) and supply risks (how concentrated and vulnerable are the supply chains?) of various minerals and found 22 to be critical for India. A subsequent ministry of mines report, Identification of Critical Minerals for India, identified 30 minerals as critical.
Minerals such as cobalt, copper, lithium, neodymium, nickel and silicon, among others, are some of the most critical for India’s — and the world’s — green transition. These minerals are required to manufacture three major green transition technologies: solar panels, wind turbines, and batteries. The global mineral production and processing of most of the critical minerals are concentrated in a few geographies, and so too is the manufacturing of green technologies components and equipment. As India aims to establish domestic supply chains for manufacturing these technologies, it would be important to quantify the demand for critical minerals for the transition to help reduce any vulnerabilities and ensure continuity in supply chains.
The clean energy technologies most important for India’s transition are solar PVs, wind turbines, and battery energy storage systems. The types and quantities of critical minerals would depend on the clean energy capacities required to meet the net zero emissions target, recycling rates, the lifespans of the equipment, and the types of technologies. A recent CSEP study finds that the demand for critical minerals will increase manifold over the coming decades. For example, the demand for copper in clean energy equipment will increase over 5.3 times between FY2025 and FY2047. The demand for neodymium, a rare earth element used to manufacture permanent magnets, is set to increase over 10 times, driven by the demand for wind turbines. Lithium demand for battery energy storage systems will rise exponentially as more renewables are installed in the grid. India is currently fully import-dependent on neodymium and lithium and a net copper importer despite having domestic mineral deposits.
Based on the projected requirements of critical minerals, policymakers can develop mineral-wise strategies to create resilient mineral supply chains, domestic and global, for India’s manufacturing needs. For minerals with some domestic production but low self-sufficiency (such as copper and rare earth elements), India needs to prioritise allocating mining leases and ensure that the domestic policy regime can attract investments. For minerals with resources but no production (such as lithium and cobalt), there should be increased efforts in exploration to convert these resources into economically mineable reserves. For minerals with no known domestic availability (such as gallium and germanium), India may work with partner countries to secure critical mineral supply chains, such as through the acquisition of foreign mining and processing assets, trade agreements, and knowledge sharing.
Additionally, it is pertinent that India increases its R&D expenditure to study alternate technologies and substitute minerals and chemistries for clean energy equipment. Innovative technologies can help reduce mineral intensities (i.e., the mineral requirements per unit of the specified technology) and mitigate the demand for hard-to-procure raw materials. For example, lithium demand can be tempered if alternative, commercially viable battery technologies are developed, such as sodium-ion or vanadium redox flow batteries. Increasing the lifespans of clean energy technologies would help push back the minerals required to replace old devices and give more time to tap into critical mineral supply chains or transition to new technologies which require fewer of these minerals. Finally, recycling existing stocks of critical minerals – such as those found within e-waste in urban mines – and using them in manufacturing inputs would help reduce additional requirements from mines. These strategies will help ensure India has resilient access to critical mineral and green technology supply chains to meet the country’s climate change targets.
Rajesh Chadha is senior fellow and Ganesh Sivamani is associate fellow, Centre for Social and Economic Progress (CSEP). The views expressed are personal
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