Metal Shortage Threatens Green Energy Push; Supply Uncertainty Amid Government Support


Amidst the green energy push, a looming shortage of transition metals has been largely overlooked, despite warnings from mining experts. The United States and the EU are racing to secure metals crucial for renewable energy technologies. However, stringent environmental regulations and government support are creating a complex supply landscape.

Challenges in Securing Metals for Green Energy Transition

A recent S&P Global report reveals considerable challenges in sourcing metals essential for achieving net zero emissions targets. Governments are prioritizing “friend-shoring,” relying on metals from friendly nations, a move that limits available sources. In the U.S., the Inflation Reduction Act drives the race to secure materials for wind, solar, EVs, and green hydrogen.

Despite subsidies boosting mining efforts, the Biden administration’s complex stance hampers local mining. While facilitating production, it hinders it through environmental regulations and permit revocations. Global geopolitical dynamics add to the uncertainty, as major producers like Indonesia propose controlling metal prices.

The S&P Global report suggests that government support will spur soaring demand, leading to supplier incapacity.

McKinsey projects a significant gap in nickel and rare earth metals by 2030 due to electrification.