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Will carbon neutrality alleviate China's energy security concerns? – The strategic importance of critical metals in batteries

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  • Du, Yufan
  • Li, Jie
  • Xu, Yuan

Abstract

How carbon neutrality may reshape energy security concerns weighs greatly for all major energy-importing countries, including China. Large-scale electrification and energy transition as a crucial pathway will potentially alter the strategic importance of different resources. This study examines three key battery-related metals – lithium, cobalt, and nickel – in China's carbon-neutral future by calculating their foreign dependency ratios and import costs and then comparing them with those of oil and natural gas. Scenario analysis shows that China's foreign dependency ratios of the metals could exceed 80% in many scenarios in 2030 and 2050 with import costs possibly reaching USD 135 billion in 2030 and USD 265 billion in 2050. Their strategic importance in 2050, as represented by import costs, can be equivalent to the average level during 2016–2020 for oil and natural gas if unfavorable conditions happen simultaneously, specifically high metal intensity, low recycling rates, and high metal prices. Hence for China, carbon neutrality might swap conventional energy security concerns with new ones, especially considering the much higher geographic concentration of metal imports. Nevertheless, their foreign dependency could also be substantially reduced or even completely avoided in low-demand scenarios with optimistic recycling rates.

Suggested Citation

  • Du, Yufan & Li, Jie & Xu, Yuan, 2024. "Will carbon neutrality alleviate China's energy security concerns? – The strategic importance of critical metals in batteries," Resources Policy, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:jrpoli:v:93:y:2024:i:c:s0301420724004239
    DOI: 10.1016/j.resourpol.2024.105056
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    References listed on IDEAS

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