EY – Critical raw materials for the energy transition

The global awareness of climate change has grown significantly in recent years due to increasing climate-related disasters. This has led to a rise in calls for climate action and the adoption of national net-zero commitments by over 100 governments. These commitments cover a large percentage of global emissions and GDP, with most nations aiming to achieve net zero by 2050. Countries in Central, Eastern, and Southeastern Europe, as well as Central Asia, have also set their decarbonization targets, aligning with the European Union's goal of achieving net-zero emissions by 2050. Other countries such as Turkey, Serbia, Uzbekistan, and Azerbaijan have set their own timelines for reaching net zero or reducing emissions. The need for energy supply chain diversification and security has become apparent, particularly in light of recent geopolitical crises that highlighted the dependence on fossil fuels. Policy support for energy transition has also strengthened globally, with various countries driving investment in decarbonization and renewable energy projects. However, the transition to clean energy sources, such as renewable power and electric vehicles, has increased the demand for critical raw materials (CRM) like copper, lithium, nickel, cobalt, aluminum, and rare earth elements. The metals and mining sectors may face challenges in meeting this growing demand, as they have long lead times and require significant capital investments. The report emphasizes the need for metals and mining companies to grow quickly and sustainably, while midstream and end-user sectors must consider potential resource constraints and sustainability requirements in their technology development and growth plans. The analysis explores both the opportunities and challenges that lie ahead in the energy transition.