Global initiatives to secure critical minerals face challenges.
The global demand for critical minerals, such as lithium and cobalt, continues to rise as countries pursue ambitious clean energy goals. Yet, international efforts to diversify supply chains have struggled to reduce U.S. dependence on dominant suppliers, including China. For the United States, this reliance creates vulnerabilities in accessing the materials essential for energy security and technological innovation.
Previously, including during the Biden Administration, the United States took initiatives to address this issue, such as regulating the international supply chain of critical minerals. These efforts, however, have not led to new supply chains of critical minerals for the United States.
Demand for the critical minerals needed for clean energy applications is growing. The International Energy Agency reports that “if countries fully implement the national energy and climate pledges they have announced, mineral demand for clean energy technologies would more than double by 2030 and triple by 2040, reaching nearly 35 million tonnes annually.”
Critical minerals are not produced in significant amounts within the United States. Kate Magill, lead editor at Utility Dive, a utility industry, comments that the United States may face supply chain issues because of its reliance on supplies of critical minerals from overseas.
Two years ago, Australia and the United States endorsed a non-binding compact. In a joint statement, the two governments described the non-binding compact as a “framework” for focusing bilateral cooperation on climate initiatives and clean energy. The compact was aimed at creating a clean energy supply chain, but results remain unclear. Although a joint statement by Australia and the United States describes projects that have begun under this compact, noting that both countries remain committed to the cooperative effort, the practical consequences of the compact to create a new “end-to-end” supply chain are not yet evident.
The United States and the European Union also began negotiations to reach a critical minerals agreement around the same time. These efforts largely stalled after about a year of negotiations, as the U.S. government seeks to address congressional concerns on an agreement. Analysts at the Library of Congress’s Congressional Research Services have noted that Congress may wish to consider whether to avoid such an agreement because it may prevent either the United States or the European Union from making more ambitious commitments elsewhere. The United States has not continued with these negotiations.
Three years ago, the United States announced a large plurilateral partnership with 23 countries to accelerate the development of sustainable clean energy supply chains and encourage “responsible” production of critical minerals. South Korea became the chair of this partnership last year and, as chair, the country is focusing on “de-risking” supply chains. Although commentators see the opportunities of the partnership, it has not yet led to significant developments in alternative critical mineral supply chains for the United States.
Policymakers seem to agree that steps need to be taken to address the shortage and lack of diversification in the supply chain. Despite U.S. legislative efforts to encourage battery and automakers to source raw materials from countries other than such as China, critical minerals supply worldwide remains controlled by a select few countries.
As global efforts have faltered, the United States has shifted its focus inward, prioritizing domestic production under a recent executive order issued by President Donald J. Trump. The executive order states that the United States should use its vast supplies of minerals to create jobs and to reduce its reliance on “foreign nations.” The executive order does not address clean energy applications for critical minerals, but it is consistent with concerns about diversifying supply chain access to critical minerals. The order describes the domestic production of critical minerals as a “national security” imperative. The purpose of the executive order, as described by Gracelin Baskaran and Meredith Schwartz at the Center for Strategic & International Studies, is to send a “strong signal” to the private sector that President Trump is focused on domestic critical mineral production
Sydney Hudson and Wilson Beaver at The Heritage Foundation comment that the United States is “almost fully reliant” on imports of critical minerals, arguing that American “protectionism” is the solution to these concerns.
Looking forward, the International Energy Agency reports that the demand for critical minerals will increase as countries around the world seek to meet their climate pledges. Even if the Trump Administration opts to withdraw from its international environmental and clean energy commitments, the demand for clean energy technologies will likely increase in the future, driven by markets in China and Europe, resulting in a continuing increase in demand for critical minerals. If the United States wishes to further diversify its supply chains for these minerals, it will need to continue to consider the possibility of international cooperation, as the Center for Strategic & International Studies explains.
