KPMG has encouraged a larger focus on securing the supply of resources needed for the world’s clean energy transition.
Its report, Resourcing the Energy Transition: Making the World Go Round, highlighted that the world’s resources reserves used for the transition are plentiful, but supply chain and ESG (environmental, social and governance) issues may emerge.
KPMG stated that the extractive industries will face scrutiny from industry, investors and the public over ESG issues, while political agendas that limit access to certain commodities could also pose a key risk in the future.
“Sectors dependent on green technologies and energy storage solutions, such as infrastructure, transport and automotive, or on the alternate application of cross-cutting critical resources, such as industrial manufacturing and life sciences, will need to manage and assess these risks to ensure supply chain resiliency,” KPMG stated.
KPMG global mining leader Trevor Hart said the extractive industry must be prioritised to enable the transition.
“Governments, investors, mineral producers, corporates and end users each have a part to play in the shift in energy mix and resource availability,” he said. “A society keen to accelerate the energy transition must now prioritise working with the mining sector to help it deliver.”
According to Hart, a circular economy will also emerge to repurpose resources.
“The redesign of products alongside the reuse, recycling, and repurposing of these resources can relieve some pressure on commodity supplies to meet demand – aiding the rapid pace of the energy transition, transformation of related industries, and reduction in temperature rises globally,” he said.
KPMG stated lithium, cobalt, vanadium, indium and graphite are all essential to clean energy supply chains.
“These five have been chosen as they are expected to experience the greatest growth in demand (in percentage terms) from energy technologies by 2050,” Hart said. “However, we need to be careful that geographical and geopolitical constraints don’t bottleneck supply chains.”