The dark side of the energy transition
Interview with Guillaume Pitron, journalist and documentary maker
By Jana Caulier and Gaston Moonen
As the European Commission appears to recognise in its current focus on critical raw materials, the energy transition is accompanied by a switch to a new set of basic materials. But rare metals and minerals come at a cost which may not be so visible in the final product that makes your smart phone, electric vehicle or solar panel work. Guillaume Pitron, journalist, documentary maker and associate researcher at the French Institute for International and Strategic Affairs (IRIS), has done extensive research on the raw materials which are now crucial to the success of the energy transition, leading for example to his book The Rare Metals War. In this interview with Jana Caulier and Gaston Moonen, both from the ECA’s Directorate of the Presidency, he shares his concerns and proposes some ways of tackling the hidden drawbacks of clean energy so as to ensure that green really is clean.
What are critical raw materials?
The European Union’s attention to critical raw materials goes back at least a decade. Guillaume Pitron explains that the EU has kept a list of critical raw materials since 2011, updating it every three years, with the last list published in March 2023. ‘The first list contained 14 materials, and it grew to 34 this yearin 2020, including some agricultural raw materials, while most of the others are either minerals, such as graphite, or metals, such as silicium metal or lithium. These materials are deemed to be critical because their production is concentrated in the hands of very few countries.’ He adds that Europe is too dependent on a handful of countries for its imports, which puts it at risk of supply shortages because of the lack of diversification. ‘Just like we saw with gas, all these other resources are critical for green energies, for the replacement of fossil fuels.’
Green energy not necessarily that green
The energy transition is currently in full spate in Europe, and rare materials are the driver for the switch to new energy forms. Guillaume Pitron observes that, just as oil has to be produced, transported and stored, the metal that makes green electricity possible also has to be extracted, and the green energy itself must be transported and stocked. ‘For each step, you will need metals. You need rare earths from the ground to produce electricity using magnets. You need copper to transport the electricity through the grids. For storage, you will need lithium, nickel, cobalt, manganese, and iron for lithiumiron- phosphate batteries for example.’
He refers to 2020 figures from the International Energy Agency. ‘The IEA has said that we will need 42 times more lithium, 24 times more cobalt, nickel and graphite, and 7 times more rare earths in the next 20 years.’ Adding a historical perspective, he explains that, 170 years ago — middle of the 19th century, Europe produced 65% of all metals. ‘This has decreased to 3% today! The reason for this is that we do not want to have the dirty mines or the dirty refineries in our backyard. We relocated the production, including the pollution of such metals, elsewhere.’
Guillaume Pitron has travelled to China four times during the last 10 to 12 years. ‘I have been in mines, illegal and legal ones, refineries, refinery areas. There you see the impact on the environment and on the health of people. You know about regulations, which are not respected on the ground. It is simply a reality that sometimes green technologies, “clean” technologies, are a dirty business.’ He concludes that the western world often has no notion of this issue. ‘Because it has been moved far away from our eyes.’
Geopolitics and everyday products
About 15 years ago, Guillaume Pitron dived into the ‘business’ of critical raw materials. ‘Geopolitics seems like a far-away subject for the everyday reader of an article. However, when you talk about raw materials that are being extracted or produced at the other end of the world, with all the environmental, sociological, political and economic impacts that entails, and you think of your everyday needs as a consumer, what is happening at the other end of the world suddenly becomes very relevant for you because you’re an actor in that.’ He gives a concrete example. ‘I wrote an article about gum arabic in Sudan. No one cares about the geopolitics of Sudan — until the moment you realize that gum arabic is necessary for Coca-Cola, and Coca-Cola get all its best quality gum arabic from Sudan. Then, suddenly, the geopolitics of Sudan become so much more interesting.’
According to Guillaume Pitron, one could think of critical raw materials as the next oil, which is one of the reasons he wrote a book to share his knowledge and understanding of the topic. That book is The Rare Metals War, published in French in 2018 and subsequently translated into ten languages and published in 16 countries. In it he uses his six years of research to explain the new dependence on rare metals. ‘No one cared about this topic until recently. But for the development of the new green and digital society these metals are indispensable.’
The energy transition as a catch-22 situation
When discussing how ‘green’ the green energy transition can actually be, Guillaume Pitron recalls a point raised by French researcher Jean-Baptiste Fressoz. ‘He said that, rather than an energy transition, we are going through an energy addition. He argued that if you look at the future of energy production in the next 15 years, according to IEA projections, we will consume as much oil and coal as today.’ While the percentage of oil and coal in the electricity mix will be less, the absolute numbers will remain the same. ‘The production of green energy will satisfy economic growth and the growth in demand. We might get the worst of both worlds unless we have much more technological progress, especially given the environmental impact of green technologies. And unless we change the way we consume.’
Guillaume Pitron refers to his recent book Dark Cloud: how the digital world is costing the earth, to be published in English in May 2023. ‘It’s absolutely essential to run the energy transition with IT, for a simple reason: wind doesn’t blow all the time and the sun doesn’t shine all the time. It is intermittent energy production. So, on the one hand, the electricity coming into the grid is not regular, unlike with nuclear or coal. On the other hand, our needs for electricity are getting more diversified. To make sure that the production of electricity meets the demand at the right time in real time, we will need IT technologies and calculations. There won’t be a green transition without AI.’
He explains that the metals that are necessary for green technologies are exactly the same as those needed for digital technologies. ‘The batteries and magnets of phones and other devices are made of the same materials as those for electric engines in cars. We have two families of different technologies which nurture each other, which work together hand by hand, which need the same methods. The history of energy transition and digitalisation is a history of complexification, for which we need increasingly more metals.’ He points out that, to extract just 15 grammes of a rare metal, it may be necessary to mine over 250 kg of material. ‘The lighter the device is in your pocket, the heavier it is to manufacture.’
Another dimension of the dilemma relates to the cost of refining raw materials. ‘Lithium is mostly produced in Australia in a way that is much more consistent with western environmental regulations. However, Australia does not refine what it produces, and China refines metals that it does not necessarily produce. So in any case China is in the process, whether it is in the extraction or refining process.’ He explains that refining is very energy-intensive, which makes it even more relevant to determine where the electricity comes from. ‘China’s electricity mix is 70 % oil and coal; that we can call ‘scope one’. When we look at ‘scope two’ — the emissions of CO₂ in order to produce the metals that end up in a low-carbon solar panel — you end up with a lot of CO₂.’ Solar panels emit much less CO₂ than a coal-powered plant. ‘However, the paradox is that to emit less carbon with solar panels you need to produce more metals. Instead of solving a problem, we are shifting from one problem to another.’
Energy transition 2.0
Guillaume Pitron argues that the focus on lower CO₂ emissions means that other environmental impacts are not really considered. ‘Mining and refining not only are very polluting but also pose health risks for the communities where they are happening.’ He recalls that a Chinese expert once told him that China is devastating its environment to feed the rest of the world with rare earth. ‘To say this is not a comfortable truth. It is uncomfortable to say that green is not clean. Green is not responsible, not sustainable. Green is not recyclable.’
Guillaume Pitron labels the current phase of the energy transition as ‘energy transition 2.0’: how we align our actions with our claims, and with the values we associate with these claims. ‘This is where, at EU level, the question of extraction at a lesser cost enters the discussion. It is a question of ESG standards¹ for mining and refining; of ethical supply chains. Of investigating your supply chain to make sure that what is mined has been refined a better way.’ These discussions, and regulatory discussions, are taking place in France. ‘At European level there is a proposition for a regulation from the European Commission on ethical supply chains: companies will have to investigate their supply chains to make sure that the mining and processing of minerals and metals have been carried out in a fair way². There is also a Critical Raw Materials Act in the works, to be published in March, as far as I know³.’
He explains that more could be done to monitor the impact of mining to make the clean energy transition cleaner and more acceptable. He has held discussions in this connection with a number of politicians, such as Pascal Canfin, chair of the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI). ‘But only very few discussions with the Greens. Perhaps they don’t see me as their best friend since I am saying that we will not produce enough metals for the energy transition if we keep up this path of production. The IEA says there is a discrepancy, a gap between the availability of future materials and the Green Deal objectives. This means that, if you want to make the green transition possible, you have to extract more. If we do not tackle this issue, the transition will be much slower than expected.’
He also sent his book to Commission President Ursula von der Leyen during the summer of 2022. ‘Then came her speech on September 14 where she talked about lithium and rare earths, which gave me the thought that I may have contributed somehow a bit to this. Actually, she replied to me after I sent the book. That does not mean I have played a role in the subsequent regulations…but who knows that may have played a role, even very little…I will never know, discussions are just starting.’ He explains that recent events, such as the COVID-19 pandemic, the Russian invasion of Ukraine, the energy crisis, and the Evergrande incident in the Suez Canal, have completely changed the perception of what security is. ‘We used to base our security on the efficiency of supply chains. Now, we realise that the invisible hand of the market cannot always make the materials and end products available and we talk more about turning from efficiency to resilience. This means the relocation of production, more recycling, possible stockpiles. That is going to come at a cost. What price are we going to pay for being consistent with our values and our claims? Do people understand that a greener world will be a more expensive world?’.
Circularity will be pivotal for critical raw materials
Guillaume Pitron identifies two reasons why critical raw materials are not yet that high on the political agenda. The first reason is that, in the energy transition, the criterion of CO₂ emissions somehow overshadows all other criteria. In this connection he mentions the biodiversity COP that took place in December 2022 to no great public fanfare. ‘This primary criterion of CO₂ emissions dissimulates the other criteria of the ecological transition, which means that ecological criteria such as ocean acidification, impact of mining on water, on soils, on biodiversity and resource depletion are somehow less considered.’
His second reason is that, as long as pollution in not in one’s backyard, it is hard to grasp the material impact. ‘The complexification of logistics chains has made it possible for companies to disregard where their resources come from and to simply act as assemblers of products.’ He argues that the same goes for consumers. ‘Who really knows what is in their phone or electric car? We have gained buying power, but lost the knowledge of the origin of resources. The energy transition and digitalisation bring these issues back to the forefront.’
He identifies the paradox that a low-carbon world is a high-resource world. ‘We are solving one issue, while replacing it by other issues. The good news is that you can recycle metals much more easily than CO₂. The technology is available, which makes it more possible, from a physical viewpoint, to recycle metals.’ The great challenge today is to lower the ecological impact of green technologies to make them socially and politically acceptable. ‘In the end, ideally we are going to harmonise the low-carbon world with a low-resource world. We want to make more, but with fewer resources. This is where circularity happens. People tend to think that recycling is circularity. However, circularity is much more than that.’
Guillaume Pitron gives the example of recycling water. ‘The Chuquicamata open copper mine in northern Chile, which is the biggest open copper mine in the world, consumes 2000 litres of water every second. You can recycle 70% of the water and they do. In this case, circularity starts with recycling water. Then eco-design. Then collection and territorial economy. Then we can talk about the sharing economy, repairing products, making product lives longer. And at the very end of the process comes the question of recycling.’ He sees circularity as the challenge for the coming decades. ‘It is going to be much more difficult to make the world more circular than to make it greener. We need to have the technologies to make the supplies meet the demand. Most importantly, we have to reorganise and make all the actors in the loop talk to each other. The circular economy is a network economy, in which the actors in the chain should cooperate. This cooperation is going to be the hard part. One challenge hides another, as they say. The green challenge hides another: the challenge of becoming circular. An important success factor will be the cooperation mode of companies.’
Promoting the value of recycling
This last statement requires some explanation. He highlights the competitiveness of second-hand products compared to the primary material. ‘The metal business is the only business I know where the second-hand product is more expensive than the first-hand product. Why would you buy a second-hand product at a more expensive price than a new product?’ He foresees two solutions. ‘The first one has already been put into practice with the 2022 EU Battery Regulation, which was passed in December 2022. It creates artificial value for recycled products by forcing EV electric battery constructors to feature recycled materials in their future batteries in 2030–2035. If you do not respect this regulation, the fine would be more expensive than the price you have to pay for using secondary material. This creates an artificial economic model based on the law.’
The second solution may lie in new narratives. ‘Until you take into account specific values relating to reputation, privacy, strategic foresight and autonomy, there will probably always be more interest in the primary product. This can be autonomy, because recycling brings autonomy as it’s another source of supply. It can also be strategic visibility, as it helps organise your business in the medium or long term, because it gives you supply security. The same goes for privacy, for example when recycling servers, to prevent them ending up in, for example, Nigeria, and to protect the people whose data is in the servers. Then there is reputation, being seen as a responsible company.’
Guillaume Pitron highlights the need for a proper business model, with the prospect that it will pay off in the long run. ‘When you recycle, you will have to invest in recycling techniques for a specific metal, which may require you to invest hundreds of millions of euros into techniques and recycling plans in order to develop, for example, lithium. What guarantee do you have that lithium will be as strategic and critical tomorrow as it is today, in this rapidly changing world?’ He explains that right now, Tesla is replacing cobalt, which comes from DR Congo, with nickel for reputational reasons. ‘Nickel may be replaced by lithium-iron-phosphate batteries. In this ever rapidly changing environment, it is hard to make sure that you’re investing in the right technology for the recycling of the right metal for the right end use. That ever-changing environment of innovation, paradoxically, hampers innovation for the recycling sector. It may create uncertainty and to some degree makes it more difficult to invest in the long term.’
Crunching the numbers makes it clear that recycling alone will not do the trick. ‘The world consumed 100 000 tons of lithium in 2022, but in 2040 we’re going to use 42 times more. Even if we recycle 100% of the lithium used this year, we won’t have enough for 2040, as the lithium is not available right now. As the expression goes, if you want to recycle something, you need to have something to recycle.’ He calls this the ‘time-diversified effect’, meaning that what we consume right now will be used for recycling in 15 or 20 years. ‘Recycling is not a short-term option, but rather a long-term strategy we will not be able to achieve without mining.’
EVs and their footprint
Recycling is only one aspect of our environmental footprint. Guillaume Pitron zooms in on electric vehicles to identify some others. ‘An electric car is as clean as the metals that are inside it. An electric car is as clean as the type of electricity which is used to refine the metals and manufacture the product.’ He calls this a car’s ‘scope two’. For him recharging is scope three: ‘An electric car is as clean as the type of electricity that is used at the recharging station. ‘Here you have 50 shades of green. Most often, depending also on the country of production, when an EV gets out of manufacturing, it is dirtier than a conventional car because it needed more electricity and the battery manufacturing is complex. After a while, it will be better to drive an electric car, because conventional cars need oil or gas.’ In Norway, where the electricity mix is skewed towards nuclear and hydroelectricity, EVs emit much less CO₂ than diesels. But the data shows that, in China, EVs emit only 30% less CO₂ during their life cycle than do diesel-powered cars — and in India EVs and diesels emit the same quantity of CO₂. ‘So, you have green cars, less green cars, dirty cars and in some countries electric cars which emit as much CO₂ as a diesel.’
Studies by Harvard and Tsinghua University have shown that gas or coal-fired power plants are turned on to deal with universal simultaneous demand for electricity. ‘As a result, EVs in China can be more CO₂-emitting during their life cycle than diesel cars. You have to think about when to charge your EV in China.’
Nevertheless, Guillaume Pitron still makes the case for investment in EVs. ‘We are going to make progress and we are going to make technological changes.’ He calls this ‘a transition into the transition’, underlining that things are going to get better in the fields of mining, recycling, standards for mining abroad, etc. ‘However, do not tell me that it is green and do not tell me that it is clean. Yes, EV CO₂ figures are good in Europe. Generally speaking, we have a greener electricity mix. Yet Europe is 7 % of humanity. What about the 93% left? How do they drive, which electricity do they use? Half of the EVs in the world are traded in China. CO₂ pollution in China is not going to stop at the Chinese border. It is global warming. It is not Chinese warming or European warming.’ He emphasises the need to focus on global emission figures, not only country by country. ‘If we don’t have a global outlook, we don’t get the full picture and we don’t get to understand the full extent of the challenge.’
Getting clarity on the green taxonomy — scopes, figures, scenarios and behavioural changes
Guillaume Pitron strongly advocates including mining in the EU’s taxonomy for green energy. ‘If you don’t do so, investors will be hesitant to invest in mining, claiming that there are too many reputational risks. The ESG standards are getting so high that investors don’t want to take the long-term risk of investing in mining. At the European level, I would put the mining of critical minerals for EVs, solar panels and wind turbines, and copper for electricity grids into the taxonomy, in order to help investors invest heavily in this sector, because we will not be able to do without. They need to do this at European level, because otherwise we won’t have sufficient resources to make the green transition possible.’ He refers again to IEA studies that have noted the discrepancy between objectives and the availability of resources in the medium term.
He sees it as the ECA’s role to provide clear figures and more information about scopes. ‘For example, the scopes of pollution. We have scope one, scope two, scope three, and now we are even speaking about scope four, which is the social and health issues associated with production.’ He provides a specific example relating to copper, which is necessary for green electricity grids. ‘When making a documentary on green technologies we went into the copper mines of Chile. You need water to extract copper. The water comes from the Pacific Ocean, because there is not sufficient water in the ground. They move it from zero altitude to 2 800 metres by pumping the water with electricity. Where does the electricity come from? It comes from a coal power plant.’ He explains that the coal comes from New Zealand and Colombia. ‘These are the scope-three effects of producing one ton of green metal. If we do not understand all the direct and indirect impacts we don’t have the full picture of these scope three effects.’
For Guillaume Pitron these concerns necessitate both more regulation and an enhanced ability to make calculations and interpret all the facts and figures. ‘There is a large field of research and development for the ECA to investigate and use, in order to bring this knowledge to the public, to political decision-makers so that they can see the full picture of what electricity and technologies entail’. For him this might include projecting scenarios, in the same way as the IEA, as to whether Europe will have sufficient resources for its future needs. ‘I am afraid that we would probably see that these resources will be lacking even in the short term. In my view, this is something very interesting to look at.’
Besides technological issues, he raises the dimension of society and democracy. ‘In the democratic world, we can see how ecology and democracy are getting intertwined. NGOs and civil society are putting their heads together to disseminate the scientific information. How do you better integrate governance bodies in order to include local populations in the decision-making process? How do you share in a better way? How do you reduce inequalities in order to make the green world more acceptable?’ He highlights that technology is just the tip of the iceberg. ‘All this entails profound democratic political discussions that build on something Albert Einstein once said: “We cannot solve our problems with the same thinking we used when we created them.” We must make a transition at the political level and act on it, not only as consumers, but also as citizens.’
He concludes by noting that human behaviour is currently dominated by a lifestyle based on individual consumption. ‘To what extent do we want to put back some collectiveness into the way we consume.’ Take transportation, for example. ‘Our current model, based on individual transportation, may come to an end at some point because it is just not sustainable. Which brings us to light mobility, also called “intermodal modularity” between transportation systems, of sharing driving devices. Quite a change from a world with SUVs or even electric cars driven by only one person. A change of mind in the collective interest.’
¹ Environmental, social and governance.
² The draft European Supply Chain Act requires EU companies to carefully manage social and environmental impacts along their entire value chain, including direct and indirect suppliers, their own operations, and products and services.
³ The European Commission indeed presented its proposals on 16 March 2023.
This article was first published on the 1/2023 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.
