Clean tech’s mineral intensity: problem or red herring?

• The resource requirements of clean technology are a fraction of those of fossil fuel-based systems
• Improving efficiencies in clean-technology manufacturing are reducing waste
• Recycling capacity is scaling up and will cap long-term demand for natural resources

The exponential increase in demand for batteries, solar panels and wind turbines is resulting in exponential growth in demand for the materials they are built with, particularly:

• lithium
• nickel
• cobalt
• graphite

• manganese

According to the World Bank, the clean-energy transition will create a cumulative demand for 1.8 billion to 3.5 billion metric tons of minerals through to 2050. Supplies of these minerals will therefore need scaled up rapidly and responsibly to meet this need. Is this possible? And is it sustainable?

These look like big numbers – and in the context of current production levels they are. Perhaps shockingly, clean technologies are more mineral-intensive than the fossil-fuel based technologies of the past: building a wind turbine requires more minerals (per MWh of capacity) than building a gas turbine; it takes more minerals (per MWh of capacity) to build a solar panel than a coal-fired power station. 

So why are we replacing one with the other? I believe the answer (or confusion) lies in the word mineral.

Mineral intensity ≠ resource intensity

Mineral (noun): A solid, naturally occurring inorganic substance

When discussing the overall resource-intensity of clean technology versus fossil-fuel technology, we need to remember this basic point: fossil fuels are not minerals. They are the organic remains of living things. This is not a minor nuance: fossil-fuel technology is vastly more resource-intensive than clean technology.

Approximately 8 billion metric tons of oil and gas and 7.5 billion metric tons of coal were produced and consumed last year. Assuming there is no energy transition and demand for fossil fuel grows by 1% per year, the world will burn through 520 billion metric tons of resources by 2050.

The natural resources needed to build the clean technology transition are dwarfed by the resources that are consumed by fossil-fuel based economy

Put another way, if the World Bank’s forecasts are roughly correct (that the transition to clean technology will require 1.8 billion metric tons of minerals through to 2050) then the cumulative resources required would amount to just 0.35% of the fossil-fuel resources that we’ll need if we don’t make that transition.

Or look at it this way: by weight, in the next six-to-12 weeks alone the world will burn through fossil fuels equivalent to the total natural resources that will be required by clean technology over the next 28 years... (and remember that those fossil fuels, once burned, are gone forever; the minerals in batteries, turbines and solar panels can usually be reclaimed and reused).

This is a red herring. So are worries about clean technology’s mineral intensity.

The energy transition means emissions will fall in the short and long term

Transitioning to clean technology means fewer natural resources will need to be extracted on a net basis. It also means that lifecycle emissions will fall to a fraction of those created by today’s fossil fuel-based system. When calculating the overall impact we acknowledge that while the mineral intensity of clean technology may be higher (per MWh), its resource intensity is much, much lower – this means the CO2 intensity is also far lower.

Despite their higher ‘mineral intensity’ the lifecycle CO2 emissions of wind and solar power are significantly lower than for coal and natural gas: 100 year lifecycle emissions by electricity source

As clean tech scales up, efficiencies are emerging

We have written before about the Wright’s Law learning curves that new technologies enjoy. The predictable compounding of these improvements (and the rising rates of adoption that follow) tends to surprise those who conceive of progress in linear terms. In the case of clean technologies, the improvements seen over the last decade have been dramatic – but because we are still relatively early in the adoption cycle there is still a lot of room for improvement.

A paper published by Nature in 2021 estimated that the emissions produced by extracting and producing metals found in EVs will be further reduced by:

• Targeting metal-rich deposits (a 78% reduction)
• Increased material efficiency (39% reduction) and
• Recycling (35% reduction)

The combined effect could be to reduce the emissions that result from extracting and processing minerals in EV batteries by as much as 90%.

Take the example of Li-ion batteries. The energy density, cycle life (the number of charges a battery takes before its capacity falls below 80%) and increasing efficiencies in the manufacturing process mean the resource intensity of Li-ion storage will continue to fall over time:

• A study published in 2016 estimated that making a Li-ion (NCA) battery¹ required 0.24 tons of material per megawatt-hour.
• By 2018, the IEA estimated that making a similar battery required 0.1 tons of material per megawatt-hour².

Furthermore, according to research group Circular Energy Storage (CES), the amount of waste produced during the battery manufacturing process is rapidly declining. Reflecting the major breakthroughs in production efficiency seen over the last few years, it recently slashed its long-term forecasts for the amount of scrap generated through to 2030 from the previously forecast of 1.7 million tonnes to roughly half that amount: 911,655 tonnes

Recycling and reuse create circularity

Theoretically, about 95% of the materials found in a spent battery can be recycled. Because clean technologies are still early in their adoption cycle, most products (EVs, solar panels and blades for wind turbines) will remain in use for years. It won’t be until the mid-2030s that the industry reaches the point where high volumes of used Li-ion batteries will begin feeding back into the supply chain.

Demand for freshly mined minerals is therefore expected to be high over the next 10 to 15 years, but that will fall over time – and many companies are already scaling up operations in preparation. In fact, Tesla is already integrating this into its process…

“Battery packs are very recyclable. They are – you can think of it like high-grade ore. Do you want to crunch up a bunch of rocks or crunch up a battery pack, which is like super high-grade ore. It’s a no-brainer to recycle battery packs.”

Elon Musk in a presentation to Tesla shareholders, August 2022

The US EPA reported in 2014 that lead acid batteries have a recycling rate of nearly 99%, making them the most recycled product in the US. This is a result of years of standardisation, experience and good regulation – all of which can be applied to recycling Li-ion batteries.

Focusing on the mineral intensity of clean tech is a red herring

The negative environmental and social impacts of our current fossil fuel-based energy system are orders of magnitude greater than the clean-technology system that will disrupt and replace it. As production scales up, it is likely that the mineral intensity of clean technologies will meaningfully decline. Furthermore, in contrast to fossil fuels, there is the potential for closed-loop circular value chains to emerge.

In that context, focusing on the ‘mineral intensity’ of clean technology as it stands today is myopic. In the short term, the world needs to extract and process more minerals to build the bridge to the positive-sum future we envisage; over the longer term, not only will the clean technologies that we invest in be vastly less resource-intensive than today’s fossil-fuel based system – investing in them should also be more profitable for our clients.