Can the world transition to clean energy? Not without critical minerals

A lack of minerals could prevent the world from reaching its emissions reduction goals, according to Goldman Sachs Asset Management portfolio manager Vikrum Vora.

Slashing carbon emissions would require two global shifts, Vora explains. The first is the widespread electrification of transportation, industrial processes, buildings, and heat. The second is the transition from fossil fuels to clean power sources like solar, wind, bioenergy, and nuclear energy.

The problem? Both clean energy and electrification require more minerals than conventional energy, Vora says. “Electric cars need six times more minerals than gasoline vehicles, and solar and wind power are up to nine times more mineral-intensive than natural gas power,” he notes.

The mineral requirements are staggering. In order to make enough progress to reach net zero emissions by 2050, production of lithium, copper, nickel, and aluminum will need to increase six-fold from 2022 production levels, according to Vora.

While adequate reserves may well exist, “investments are lagging because of heightened geopolitical, operational and financial risk,” he says.

Vora says a three-part solution is required. “We need better policies at the country level, more efficient mineral use, and higher mineral prices.”