China’s pincer in new energy raw materials
China influences and will influence the raw materials markets for the energy transition. The article by Giuseppe Gagliano
In the context of a pressing global energy transition, China emerges as a preponderant figure, profoundly influencing the global energy and raw materials landscape.
THE PRIMATE IN THE SOLAR INDUSTRY
Its ability to lead the way in the production of solar panels, lithium batteries and other essential components for renewable energy puts it in a prominent position as Europe and other global powers race to reduce their dependence on the fuels fossils.
China not only holds a near-monopoly in the manufacturing of solar panels, but also in the production of the silicon wafers needed to build them, with companies such as China Rare Earth Group fueling its industrial dominance. Beijing's $50 billion investment in its growing rare earth industry highlights this trend, making the country an unavoidable benchmark for any economy seeking a green conversion.
DEPENDENCE ON CHINA FOR “GREEN” RAW MATERIALS
The growing global need for critical metals for the clean technology industry, such as lithium, cobalt and rare earths , increases dependence on China-dominated supply chains. The Asian nation has proven itself very capable, extending its reach to Africa, where it controls a significant portion of the mines of these essential metals.
This influence extends beyond simple trade, with tangible geopolitical implications. China's ability to impose restrictions on the export of critical resources, as demonstrated by recent moves regarding solar wafers and rare earths, represents a powerful geopolitical weapon that can shape international dynamics in its favor.
THE GEOPOLITICAL CONSEQUENCES
Europe, meanwhile, finds itself in a precarious position, almost completely devoid of critical resources, and heavily dependent on imports. This vulnerability becomes even more evident in the face of scenarios of geopolitical tension, such as the conflict in Ukraine, which have shown how quickly energy supplies can be compromised.
Looking ahead, according to estimates such as those from Bloomberg , demand for metals critical to the clean energy sector is expected to increase exponentially, placing China even further at the center of a complex web of economic and political interdependence. The transition to cleaner, more sustainable energy, therefore, finds itself intricately intertwined with China's power strategies, requiring other global players to carefully evaluate their next steps in the delicate balance of this new world energy order.
In conclusion, as the world moves towards decarbonization, China consolidates its role as a leader in raw materials essential for the energy future. For other countries, particularly Europe, this poses significant challenges and the need for forward-looking strategies to ensure energy security and autonomy in the emerging post-fossil era.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/cina-materie-prime-transizione-energetica/ on Sat, 11 Nov 2023 06:09:46 +0000.