Secure, resilient and sustainable energy technology supply chains are central to successful clean energy transitions. The race to net zero emissions will redefine global energy security and shift the focus from the supply of fossil fuels to the supply of the minerals, materials and manufacturing capacity needed to deliver clean energy technologies.
The IEA’s report, Securing Clean Energy Technology Supply Chains, assesses current and future supply chain needs for key technologies – including solar PV, batteries for electric vehicles and low emissions hydrogen – and provides a framework for governments and industry to identify, assess and respond to emerging opportunities and vulnerabilities. The IEA highlights five key strategies to build secure, resilient and sustainable supply chains: diversify, accelerate, innovate, collaborate and invest.
The deployment of clean energy technologies needs to be scaled up rapidly around the world to avert the worst effects of climate change. Rapid expansion of solar energy is central to getting to net zero. The generation of electricity using solar PV technology is a central pillar of the clean energy transition. Rising global solar PV needs will boost opportunities for expanding manufacturing capacity in the Indo-Pacific region. Almost all of today’s global manufacturing capacity for solar PV is in the Indo-Pacific region, most notably in China. The region also hosts the majority of material processing capacity to sustain such manufacturing capacity. Although there are plans to scale up module manufacturing capabilities in North America and Europe, the region is well placed to remain a major supplier of components and a key manufacturer of panels.
Electrifying vehicles hinges on adequate supplies of critical minerals for batteries. Accelerating the uptake of EVs will require a massive expansion in the supply of batteries, which will drive up demand for several critical minerals. Like solar PV, global sales of electric cars have soared over the last few years, doubling in 2021 alone to a record 6.6 million. Just 120 000 were sold in 2012. Sales of electric buses (up 40%) and medium- and heavy-duty trucks (up 100%) have likewise seen large increases in the last year.
In the Net Zero Emissions by 2050 Scenario, the global fleet of EVs reaches 350 million (excluding two/three-wheelers) and their share of the total vehicle fleet around 20% in 2030. By then, EV sales reach over 65 million per year – almost 60% of total vehicle sales. This contributes to an average increase of 30% per year over 2021-2030 in global demand for lithium (compared with 6% over the last five years), 11% annual demand growth for nickel (5%) and 9% annual demand growth for cobalt (8%).
Today’s global battery manufacturing production capacity is about 871 GWh. Increased material and production requirements for EV batteries are set to benefit the Indo-Pacific region. Australia is the largest producer of lithium, producing over half of global mined production in 2021, and is home to two of the top five global producers – Pilbara Minerals and Allkem. For nickel, laterite deposits are mainly found in Indonesia, the Philippines and New Caledonia. There are plans to launch or expand battery manufacturing in several countries. Indonesia recently created a government-owned battery corporation that aims to build 140 GWh of battery capacity by 2030, of which 50 GWh will be for export.