Amid the rapid transformation of the energy sector worldwide to meet global climate goals, demand for rare earth elements, such as lithium, nickel, cobalt is expected to increase as much as six times by 2040, according to a report by the International Energy Agency (IEA) on Wednesday.
The report, The Role of Critical Minerals in Clean Energy Transition revealed that supplies of critical minerals are essential for key clean energy technologies like electric vehicles, wind turbines and power grids.
The report showed that critical minerals are key to an accelerated transition to clean energy and in meeting global climate goals.
To this end, the IEA urged governments to act now to avoid energy security hazards and supply vulnerabilities that vary widely according to mineral variations.
Fatih Birol, executive director of the IEA, said in the report that the “data shows a looming mismatch between the world’s strengthened climate ambitions and the availability of critical minerals that are essential to realizing those ambitions.”
"The challenges are not insurmountable, but governments must give clear signals about how they plan to turn their climate pledges into action. By acting now and acting together, they can significantly reduce the risks of price volatility and supply disruptions," he said.
The IEA highlighted that the mineral requirements of an energy system powered by clean energy technologies differ profoundly from one that runs on fossil fuels.
"A typical electric car requires six times the mineral inputs of a conventional car, and an onshore wind plant requires nine times more mineral resources than a similarly sized gas-fired power plant," the report read.
In the report, the IEA forecasts a change in profit-making in moving away from fossil fuels to a cleaner energy transition.
"Today’s revenue from coal production is ten times larger than from energy transition minerals. However, in climate-driven scenarios, these positions are reversed well before 2040," the agency said.
By Gulsen Cagatay and Nuran Erkul Kaya