Really useful thread, thank you all.
Original Message:
Sent: 21-07-2023 08:57
From: James Doyle
Subject: The Reality of meeting 2050 Net Zero Target!
Indeed - agree with the above re: materials and resources are crucial to support the energy transition and investment in new technologies (e.g. demand for copper, lithuim, cobalt etc).
Good article in the FT the other day from Adair Turner, Myths are clouding the reality of our sustainable energy future_FT article and related report from Energy Transition Commission. Notes that there's enough long-term supply for key minerals from known resources easily exceeds total future requirements to support new technology and transition from fossil fuel to decarbonise electricity production to renewable sources (and need to increase and diversify supply of these materials and resources).
See link to main report Material and Resource Requirements for the Energy Transition and Exec summary/infographics below:
In its latest report Material and Resource Requirements for the Energy Transition the ETC dives into the natural resources and materials needed to meet the needs of the transition. Large investments and strong policy support are needed to ensure that the supply of some key minerals grows quickly and sustainably over the next decade to meet rapidly growing demand.
There is no fundamental shortage of any of the raw materials to support a global transition to a net-zero economy: geological resources exceed the total projected cumulative demand from 2022-50 for all key materials, whether arising from the energy transition or other sectors.
However, even with strong action on innovation and recycling, scaling supply rapidly enough to meet demand growth between now and 2030 will be challenging for some metals, and mining will need to expand significantly.
Without strong action to improve materials efficiency, increase recycling or increase mined supply, there could be significant supply gaps for six key energy transition materials: lithium, nickel, graphite, cobalt, neodymium and copper.
The analysis identifies four key actions policymakers, miners and manufacturers must take to reduce that risk and expand supply quickly and sustainably:
- Building new mines and expanding existing supply of materials quickly
- Building more diverse and secure supply
- Driving sustainable and responsible material production
- Boosting innovation and recycling to reduce pressure on primary supply
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James Doyle
Director, Green Finance, Investment Management
Original Message:
Sent: 20-07-2023 17:01
From: Oliver King
Subject: The Reality of meeting 2050 Net Zero Target!
A knotty issue James and I agree with Stuart's point on a multi-faceted approach to energy commodities and materials.
With electrification of nearly everything energy demand is going up (7x by 2030, IEA) and needs to to transition away from a fossil fuel economy. Commodities and materials for electrification are crucial. Given energy is a social good that lifts countries out of poverty and fuels global GDP growth, it's the cost of that energy we need to better understand across all capitals: natural capital (environment & resources), social capital (forced labour) and financial capital.
Innovation is the key and the gaps left behind are trade-offs. The role of AMs I think is 2-fold, firstly, allocation of capital to innovators and second investee engagement with issuers to reduce the gaps and therefore lessen the necessity of trade-offs. On allocation of capital we can nab the well-used maxim reduce, re-use and recycle:
Reduce – investment in efficiency boosting innovation that reduces the quantity of material input per kW of output. OxfordPV perovskite solar panels does this by adding another layer of irradiation increasing solar power output by 75% and reducing the relative number of panels as well as the input materials per kW.
Reuse – repurpose EV batteries that aren't up to grade for cars into domestic batteries to store the power generated from your perovskite solar. Someone somewhere is doing this…
Recycle – extract material from old kit that has no viable use. A Tesla co-founder's Redwood Materials does just this on everything from key fobs to laptops and more. A recent funding round valued Redwood at $5bn.
On stewardship I'd offer building an engagement strategy around transition efforts: Energy firms increasing capex to renewable energy generation and storage and away from fossil fuels (sadly, the opposite of what BP did Q1 this year) and for mining companies to shift from or lessen coal extraction and move into lithium etc (in a sustainable manner!).
I'm a hatchling on this forum and already amazed by everything CFA UK is doing in this area; lots to do and no reticence to get stuck in.
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Oliver King
Sustainable Investing Data Solutions
Original Message:
Sent: 18-07-2023 13:47
From: James MacLeod-Nairn
Subject: The Reality of meeting 2050 Net Zero Target!
HI All,
I hope this is a suitable post to add, I thought this is interesting given sustainability and Net Zero targets go hand-in-hand. I watch a lot of documentaries on a variety of subjects, but I follow this one particular channel on YouTube that centres around the subject of geopolitics. This video discusses how the lofty aspirations of reaching net zero and the technological revolution required to meet this is likely to be insurmountable, given what drives this is raw materials required to manufacture the technology we are pinning our hopes on (i.e. renewable energy, batteries, hydrogen...etc). The point the video is making that the technology required to make this dream a reality isn't there yet and that there isn't enough raw materials to meet this demand (as it currently stands), and if it was the consequences of extracting all of this would effectively destroy the ecosystems of many countries, as current mining practices do not prioritise the protection of environment above all else. But also looks at the geopolitical angle of how China effectively controls the mines that produce most of these so called "green minerals" that are required in the technology, and as we ramp up production it will drive up demand and will likely cause resource conflicts between key global powers.
It would be interesting how given what he is suggesting, how can the AM industry effect change that will facilitate reaching this goal? because clearly there are some significant hurdles
https://www.youtube.com/watch?v=iibsrDXdEos&t=337s
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James MacLeod-Nairn
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