Critical Minerals for Low-Carbon Economy as a New Dimension of the Energy Transition

The increased efforts of the international community to combat climate change after the adoption of the Paris Agreement in 2015 has accelerated the transition of the world’s largest economies, including China, the United States and the European Union, towards low-carbon development. As part of forming low-carbon economy, some technologies designed to decarbonize energy consumption in industry, transport, and other sectors play the leading role: in particular, renewable energy, electric transport, and energy batteries and storage have become an integral part of national economic development strategies which emphasize to varying degrees the need to reduce the consumption of fossil fuels. However, the strengthening of the climate change factor in the global economy has led to a sharp increase in demand for another type of natural resources, which is minerals needed for the production of low-carbon technologies. Given their strategic importance for the development of new priority industries, primarily in energy and transport, and due to the vulnerability of their supply from other markets, these minerals are classified as critical and represent a new area of international competition in the field of economics and trade policy. The article aims to identify the characteristics of commodities markets that have been shaped and influenced by the energy transition. It examines the current state of the global critical minerals market, considering the geographical concentration of their extraction and processing. In addition, this paper looks into the approaches of the world’s leading economies to define and assess critical minerals depending on the nationally determined factors. The article also characterizes key trends in trade policy measures related to supply chain derisking, which is the focus of the industrialized economies of the Global North, and increasing value addition in the production of low-carbon technologies in Global South countries which previously used to export primary raw materials.