Europe risks exchanging over-reliance on Russian gas for dependency on Chinese-processed vital energy transition materials, warned a senior renewable power sector executive.
Samuel Leupold, chair of Corio Generation, the newly formed specialist offshore wind unit of global finance giant Macquarie, said the current focus on imported hydrocarbons should sharpen governments’ focus on the need to secure access to the commodities that will underpin the next energy era.
“The current crisis is opening our eyes to what it means to depend on commodity imports from big single supplying countries.
“The end of hydrocarbon commodities will not be the end of energy commodities,” Leupold told WindEurope’s 2022 event in Bilbao, as he cited copper, lithium, nickel, cobalt and rare earth materials as the key areas needing attention due to their roles in everything from battery storage to rare earth magnets used in wind turbines.
While mining and extraction of the various materials, although concentrated in certain markets, is not dominated by one country, Leupold said the situation is different when it comes to their refining and processing.
“This industry is essentially controlled by one country – China is the transition material refinery of the world. They’re producing or purifying all the materials that will drive net zero,” said Leupold, who before joining Macquarie was a pioneer of the European offshore wind sector with Orsted.
China has shares in refining that vary between 40% in copper to 60% in lithium and 90% in rare earths, according to Leupold, who said future energy dividing lines would be between the “haves and have-nots” in the extraction and processing of such materials.
“We need to build a supply chain for transition-critical materials here in Europe.
“Renewables and wind energy must position itself much more as an instrument of geopolitics going forward in Europe,” said the Corio executive.
“The age of hydrocarbons will be followed by the age of energy transition materials.”
Leupold's comments echo fears expressed recently by US energy secretary Jennifer Granholm, who warned fellow ministers that supply chains for key energy transition minerals and materials need to be scaled-up and secured as nations lay their plans for a future that is both green and less reliant on Russia.
