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Daily Newsletter

08 August 2023

Daily Newsletter

US adds copper to critical raw materials list

In its finalised Critical Materials Assessment for 2023, the US Government has for the first time included copper as a critical material.

The US Department of Energy (DoE) officially added copper to its list of critical raw materials earlier this week in an historic move that reflects the growing importance of energy transition technologies.

In its finalised Critical Materials Assessment for 2023, the US Government has for the first time included copper as a critical material, following the example set by the EU, Japan, India, China and Canada. The Critical Materials Assessment evaluates materials based on whether they “serve an essential function” in the production of energy transition technologies such as electric vehicles (EVs). It is also defined as any non-fuel mineral that has a high risk of supply chain disruption.

The critical materials list will inform eligibility for government subsidies under the Inflation Reduction Act (IRA). The final list includes aluminium, cobalt, copper, dysprosium, electrical steel, fluorine, gallium, iridium, lithium, magnesium, natural graphite, neodymium, nickel, platinum, praseodymium, terbium, silicon and silicon carbide.

Alejandro Moreno, Acting Assistant Secretary for the DoE’s Office of Energy Efficiency and Renewable Energy, said in a statement: “As our nation continues the transition to a clean energy economy, it is our responsibility to anticipate critical material supply chains needed to manufacture our most promising clean energy generation, transmission, storage and end-use technologies, including solar panels, wind turbines, power electronics, lighting, and electric vehicles.

“Ultimately, identifying and mitigating material criticality now will ensure that a clean energy future is possible for decades to come,” he added.

In March, the US Geological Society (USGS) controversially denied a request to add copper to its official critical minerals list. The request was made by the Copper Development Association (CDA) due to a “dramatic supply risk”.

At the time, the CDA’s president Andrew Kireta criticised the decision as not being “consistent with the spirit or the letter of the law”. Several large copper miners including Rio Tinto, BHP and Freeport-McMoRan are CDA members.

The DoE’s recent assessment provides an updated list to previous Critical Materials Strategy reports, the first of which was released in 2010. It serves as a separate, complementary analysis to other criticality assessments conducted by the US Government, such as those by the USGS.

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.