Projecting Critical Minerals Need for India’s Energy Transition: How Much of Which Minerals are Needed for the Transition?
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Abstract
The Paris Agreement, adopted by 196 countries at the 21st Conference of Parties (COP21) in 2015, provided a significant boost to the clean energy transition process, including solar and wind energy and battery storage, resulting in unprecedented global growth in the demand for critical minerals required as inputs to manufacture the requisite equipment. At COP26 held in 2021, India presented its climate action strategy, including a commitment to achieving the target of net zero emissions by 2070. However, there are several challenges in achieving these targets, including mobilising adequate investments, solving technical and operational challenges, and creating a just transition framework. Another imminent concern is ensuring resilient access to the requisite green technologies and the raw materials needed for their manufacturing, referred to as “critical minerals.” This paper estimates the mineral requirements to manufacture the clean energy technologies needed for India to meet its climate action commitments. It highlights the cases in which India has access to these materials domestically and the reliance on imported minerals—in either their raw, processed, or component-embedded forms—to meet the needs of the growing domestic clean energy equipment manufacturing sector. Though the mineral requirements for EV manufacturing have not been considered in this paper, a large demand is expected from this sector as well. Other sectors being electrified in India include cooking and heating, but their mineral requirements are not computed either. The demand for critical minerals in the clean energy transition will rise manifold over the coming decades. Most of these have been identified as critical by the CSEP and Ministry of Mines reports. For these minerals, especially those with no known domestic resources, mineral-wise strategies are required to ensure robust access for India’s manufacturing needs and climate change mitigation ambitions. The study also shows that promoting recycling and the use of recycled materials in supply chains can help mitigate additional requirements for mines, as would improvements in mineral intensities and technology efficiencies.
Q&A with the authors
- What is the core message conveyed in your paper?
The demand for critical minerals for the clean energy transition will rise manifold over the coming decades. Most of these have been identified as having high economic importance and supply risks by an earlier CSEP study. They were also found to be critical in the Ministry of Mines report on the Identification of Critical Minerals for India. India has the geological potential for some of these minerals, which may be further utilised to meet raw material requirements. For minerals with no known domestic resources, the paper recommends strategies which policymakers can employ to ensure India has robust access to its manufacturing needs and climate change mitigation ambitions.
- What presents the biggest opportunity?
Given the vast geological potential in India, some of the critical mineral needs can be met through increased investments in commencing new or expanding existing mining activities in the country. While the mining industry can cause serious social and environmental externalities, responsible practices can help ensure adverse impacts are minimised and adequate benefits are shared with local communities. The sector can help create both direct and indirect jobs as well as provide the raw materials required in the downstream manufacturing sectors, which would help reduce India’s dependence on imported minerals. Increasing mineral self-sufficiency will become increasingly pertinent due to the various domestic manufacturing incentive schemes for clean energy equipment.
- What is the biggest challenge?
There are several challenges in achieving the climate action targets set by India, including mobilising adequate investments, solving technical and operational challenges, and creating a just transition framework. This paper highlights the imminent concern in ensuring resilient access to the requisite clean energy technologies and the raw materials required for their manufacture. As all countries move towards net zero emissions, the demand for critical minerals globally is set to rise, which would result in price spikes and non-availabilities, thus slowing down the transition. This challenge has already been highlighted at various international forums, and various countries, including India, are working together to ensure adequate supplies of these minerals.
Rajesh Chadha
Ganesh Sivamani
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The Centre for Social and Economic Progress (CSEP) is an independent, public policy think tank with a mandate to conduct research and analysis on critical issues facing India and the world and help shape policies that advance sustainable growth and development.