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Critical Metals in the Path towards the Decarbonisation of the EU Energy Sector: Assessing Rare Metals as Supply-Chain Bottlenecks in Low-Carbon Energy Technologies

In order to tackle climate change, to increase energy supply security and to foster the sustainability and competitiveness of the European economy, the EU has made the transition to a low-carbon economy a central policy priority. This report builds on the first study conducted in 2011 (Critical Metals in Strategic Energy Technologies), where critical metals were identified which could become a bottleneck to the supply-chain of various low-carbon energy technologies. The first study concentrated on the six SET-Plan technologies, namely: wind, solar (both PV and CSP), CCS, nuclear fission, bioenergy and the electricity grid. Fourteen metals were identified to be a cause for concern. After taking into account market and geopolitical parameters, five metals were labelled ‘critical’, namely: tellurium, indium, gallium, neodymium and dysprosium. The potential supply chain constraints for these materials were most applicable to the deployment of wind and solar energy technologies. In the follow-up study reported here, other energy and low-carbon technologies are investigated that not only play an important role in the EU's path towards decarbonisation but also may compete for the same metals as identified in the six SET-Plan technologies. Eleven technologies are analysed including fuel cells, electricity storage, electric vehicles and lighting. As in the first report, sixty metals, i.e. metallic elements, metallic minerals and metalloids are considered; only iron, aluminium and radioactive elements were specifically excluded. Graphite was also included, reflecting its status as a critical raw material. Where possible, the study models the implications for materials demand as a result of the scenarios described in the EU Energy Roadmap 2050. Consequently, the results obtained in the first study are updated to reflect the data that has become available in the roadmap. This second study found that eight metals have a high criticality rating and are therefore classified as ‘critical’. These are the six rare earth elements (dysprosium, europium, terbium, yttrium, praseodymium and neodymium), and the two metals gallium and tellurium. Four metals (graphite, rhenium, indium and platinum) are found to have a medium-to-high rating and are classified as ‘near critical’, suggesting that the market conditions for these metals should be monitored in case the markets for these metals deteriorate thereby increasing the risk of supply chain bottlenecks. Metals demand in the electric vehicle, wind, solar and lighting sectors were identified to be of particular concern. As in the first report, ways of mitigating the supply-chain risks for the critical metals are considered. These fall into three categories; increasing primary supply, reuse/recycling and substitution In addition, a number of topics were identified as possibly meriting further research, but could not be considered within the immediate scope of this study. These include conducting further studies to look at raw materials requirements for hybrid and electric vehicles for a wider range of technology uptake and penetration scenarios; developing new and more detailed scenarios for the uptake and technology mix of options for stationary energy storage; undertaking similar studies in defence and aerospace; improving statistics on the contribution of recycling to world production for a number of metals; and investigating the contribution of greater traceability and transparency to reducing raw materials supply risk. Finally, it is important not to overstate the bottlenecks due to the risks of raw material shortages for key decarbonisation technologies. This is because there are still many years before the large uptake of some technologies and in the coming years, there are numerous options that will become available to mitigate the risks identified.