Newsletter
30 August 2023
Complexities of clean energy demand and how supply chain transparency responds to potential barriers
Welcome to the Circulor monthly newsletter, where we aim to bring you the latest insights on progress toward more resilient, transparent and responsible global supply chains.
In an era dominated by growing concerns about sustainability and environmental impact, renewable energy has risen as a beacon of hope for its promise to harness the Earth's natural resources for a cleaner future. But beneath the surface of this potential lies a complex web of challenges and opportunities that converge on the need for greater supply chain transparency.
Globally, $1.7 trillion is expected to be invested into clean energy, like wind, solar, electric vehicles, and batteries this year, well surpassing fossil fuel investments at $1 trillion (IEA). While the past couple of years have created essential momentum, surety that investments and clean energy deployments will continue toward achieving global climate goals remains at risk, especially while investments remain unevenly distributed across both technology sectors and geographies.
Key policies like the U.S.’s Inflation Reduction Act (IRA)—now one year old—have created a major clean energy milestone that's spurred an estimated $389B in public spending, with over $1.2T expected in private investments over the coming decade. Since the IRA’s passage, 270 clean energy projects have been announced, with investments totalling $132B, manifesting in the form of 51 solar plants, 91 battery factories, 100,000 clean energy jobs, and overall growth of America’s economy.
The Inflation Reduction Act heralds the largest shift in U.S. climate policy to date, pushing clean manufacturing and incentivizing consumers toward electric vehicles via tax credits. Want to know more click the image
The IRA, however, comes with one important piece of unfinished business—siting and permitting reform was contingent on its passage and remains undone. This isn’t solely a U.S. issue. The lack of efficient and effective evaluation of projects’ environmental and community impacts is increasingly stalling the global energy transition as solar projects, wind turbines, manufacturing facilities, and transmission lines form a growing queue of untapped clean energy capacity and greater investments stay at bay.
Transparency emerges as a solution to break this chicken-and-egg dilemma. Greater transparency on projects, the materials they source, their domestic content, and continuous monitoring of their impacts on local environments and communities can unlock investments and regulatory approvals. A virtuous cycle can form, in which more responsibly and sustainably produced clean energy is powering more clean energy manufacturing and clean energy capacity with unquestionable proof of an overall positive impact. An unambiguous license to operate through traceability, coupled with investment and policy, can remove obstacles to fully unleash the energy transition and ensure it delivers on its promises.
More detail on these trends, as well as a number of others, can be found below. We look forward to continuing to bring you these global insights both here, as well as on circulor.com and LinkedIn.
What we are reading...
BHP breaks ground on wind farm to slash emission in nickel production
Circulor customer and investor, BHP, began installing the tallest wind farm in Western Australia which will be wholly used to power its Nickel West operations. The wind farm will generate renewable energy equivalent to the Kalgoorlie nickel smelter’s and the Kambalda concentrator's annual electricity consumption, reducing Nickel West’s Scope 2 carbon emissions by approximately 32% and overall emissions by 16.5%. Australian Mining has more here.
EV demand for critical minerals is creating supply pressures.
S&P Global forecasts that the Inflation Reduction Act will help drive up U.S. demand for energy transition minerals nickel, cobalt, and lithium by 23 times by 2035. However, a maze of regulatory obstacles, labor issues, and environmental concerns, exacerbated by geopolitical tensions, could seriously hamper efforts to match this rising demand with effective supply, posing a threat to energy transition goals. S&P Vice Chairman Dan Yergin explains more here.
All eyes on Africa, especially Europe’s
According to The Economist, Africa is increasingly seen as a potential solution for Europe's near-term and long-term energy needs. With 13% of the world's natural gas reserves, countries like Mozambique, Senegal, and Nigeria are attractive alternatives to Russia and its unpredictable high-priced supplies, especially during the ongoing war with Ukraine. In the long term, Africa could have even more potential to shape Europe’s energy landscape, with its critical mineral capacity as a key source to both diversify resources and enable a pivot to low carbon power.
Greening aluminium production
As renewable energy infrastructure fuels demand for green aluminium, the industry's focus on producing clean, affordable, recycled aluminium has the potential to reduce overall emissions by 22% and offer aluminium products with 5 to 25 times smaller carbon footprints than new metal, according to Wood Mackenzie. Additionally, the exploration and innovation in alternative materials, such as copper, offers promising potential as replacements. Bloomberg’s Switched On podcast shares more.
Dry cell technology unlocks carbon emissions reductions.
Automakers are actively pursuing ‘dry cell’ technology to, in part, meet low energy requirements. The innovative approach eliminates the use of a slurry in the battery electrode fabrication process, reducing battery manufacturing energy consumption by almost 50%, according to EE News. Recognizing this, Tesla acquired Maxwell Technologies in 2019 and today offers dry cell tech through its new 4680 battery cell, aiming to drastically decrease energy consumption and the production footprint.
What we’re sharing…
The EU Battery Regulation officially enters into force.
On August 17, 2023, Europe’s new law for a more sustainable, secure, and circular battery economy officially entered into force, which mandates a digital battery passport by February 2027. All participants within the battery value chain will need to demonstrate requirements, including embedded carbon footprint, responsible sourcing, recycled content, and state of health performance. Read more.
Beyond compliance
It’s not only about compliance when it comes to battery passports, but also about creating greater value and efficiency for industry and consumers. Luise Müller Hofstede, Circulor Business Development Director and CatenaX board member, and Ilka von Dalwigk, Policy Manager at European Battery Alliance and EIT InnoEnergy, talk with Dr. Simon Engelke, Founder and Chair of Battery Associates, about industry benefits and opportunities to optimize in developing battery passports. Read more.
KPMG survey: The data speaks loud and clear
KPMG, a partner of Circulor, recently shared survey results revealing that 74% of U.S. ESG practitioners are incorporating ESG criteria into their dealmaking plans, signifying a shift in business ethics. Over half of the respondents reported having cancelled deals due to ESG concerns, and nearly two-thirds of investors are willing to pay more for ESG-aligned companies. The study also indicated that the frequency of ESG due diligence is expected to increase going forward, with the main challenge being the lack of robust data. Read more
Welcome back from vacation!
We hope you enjoyed a lovely summer holiday. As September rolls in, we understand that it's a busy month for everyone. That's why we wanted to let you know that Circulor will be participating in some key events, and we would love to have the opportunity to meet you there.
6 – 9 Sept: IAA MOBILITY 2023
6 – 7 Sept: RECHARGE International Congress of Battery Recycling
13 – 14 Sept: TECH BBQ with Polestar
13 Sept: BT Sustainability Festival
13 – 15 Sept: Detroit Auto Show
18 Sept: SMMT Electrified Summit
18 –20 Sept: Fastmarkets European Battery Raw Materials Conference
18 – 21 Sept: Oracle Cloud World
21 Sept: Battery Associates Battery Day (virtual)
26 – 27 Sept: MOVE America
28 Sept: Battery Tech Expo
If you would like to know more about the topics we have discussed above or would like to see a demonstration of our PROOF Platform, then you can get in touch here.