The global lithium industry witnessed significant growth in reserves and resources during the first quarter of 2024, surging to 303.5 million metric tons, a remarkable 52.2% increase compared to the same period in 2021, per S&P Global Commodity Insights.

This uptrend aligns with the 2023 trajectory, where lithium reserves and resources expanded by 36.9 million metric tons. Despite this surge, lithium prices experienced fluctuations. While they soared to historic highs in 2022, reaching $79,650 per metric ton in China, they have since cooled down, resting at $15,250 per metric ton as of April 17, 2024. 

Nonetheless, experts suggest a prevailing upward trajectory in lithium demand and prices since 2016. However, short-term challenges such as recent price corrections and surpluses in battery metals have been noted. 

RELEVANT: Why Lithium Prices are Plunging and What to Expect

Still, medium-term supply deficits are anticipated to sustain interest in lithium exploration despite these fluctuations.

Mining Titans: Global Lithium Reserves Unearthed

Geographically, Argentina emerges as the global leader in lithium reserves and resources, contributing 29.6% in the Q1 of 2024. The United States comes second at 24.0% and followed by Bolivia at 18.2%.

Meanwhile, Australia, renowned as the top lithium producer globally, possesses 22.1 million metric tons of reserves and resources, securing the 6th position in global rankings.

Remarkably, Canada has shown substantial growth in its lithium sector. Its share of reserves and resources increase by 273.1% since Q1 of 2019, amounting to 28.2 million Mt in Q1 of 2024. This growth is underpinned by a surge in lithium exploration budgets, which spiked by 120% in 2023, marking the third consecutive year of expansion.

Canada, especially Quebec, is displaying a strong enthusiasm for the lithium and battery sectors. The country focuses on establishing a complete supply chain from mining to electric vehicle (EV) production. 

Jean-François Béland, Ressources Québec’s Vice President, highlighted the imperative of car electrification, noting the demand will be there, whatever happens. He further stated that “lithium and critical minerals are, in the 21st century, what coal was in the 19th century and what oil was in the 20th century.”

Lithium’s Role in the EV Revolution

According to the S&P Global Commodity data, lithium-ion battery capacity is projected to reach 6.5 TWh by 2030. Lithium is recognized as a crucial component in manufacturing EVs and is considered the cornerstone of achieving net zero emissions. 

The demand for lithium-powered EV batteries is anticipated to grow annually at a rate exceeding 22%. And the EV transport segment will capture 93% of the market share by 2030.

In response to the challenges posed by the pandemic and geopolitical tensions, companies are adopting these strategies to cope:

Reevaluating undeveloped lithium assets,
Expediting projects, and
Exploring new opportunities.

This trend has been further fueled by national government policies that advocate for energy transition and support battery supply chains.

The global lithium exploration arena has also witnessed significant financial inflows. Exploration budgets skyrocketed to a historic high of $830 billion in 2023, marking a 77% increase. 

Notably, four countries—Australia, Canada, Argentina, and the United States—each allocated over $100 million for lithium exploration in 2023. Collectively, they represent almost 75% of the global lithium exploration budgets for the year. 

Looking ahead, projections indicate further expansion in lithium production. China expected to capitalize on lower-quality deposits and Bolivia is poised to elevate its status as a formidable lithium producer, leveraging its substantial lithium reserves of 39.0 million metric tons.

Balancing Demand and Production

In a separate report by Benchmark’s Solid-State and Lithium Metal Forecast, the global lithium metal production struggles to keep pace with the surging demand. The sector encounters challenges in securing sufficient lithium metal for battery manufacturing, despite its substantial capacity potential.

In 2024, if all viable lithium metal produced were allocated to batteries, it could potentially support the production of 5 to 10 gigawatt-hours (GWh) of cells. 

However, a considerable portion of lithium metal is directed towards other industries, resulting in a supply shortfall this year. This deficit is projected to escalate from nearly 10 GWh in 2024 to about 60 GWh by 2026.

Interestingly, trading of the metal on platforms like CME Group Inc. is witnessing a notable uptick. This has garnered more interest from funds, even as prices of battery metals decline, showing market resilience.

READ MORE: Lithium Prices and The Insights into the EV Market’s Pulse

The first quarter of 2024 marks a pivotal moment in the global lithium industry, with reserves and resources experiencing a remarkable surge. Despite price fluctuations, the upward trajectory in demand and prices remains evident as governments advocate for clean and sustainable energy transition.

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Russia’s increasing influence in African countries and its focus on critical minerals pose significant challenges for the West. In a historic announcement on March 16 this year, Niger declared the immediate termination of its military cooperation with the US. The country nullified a military agreement that permitted US bases on its territory.

Critics argue that Russia’s resource-driven approach may exacerbate existing governance challenges, including corruption, environmental degradation, and social unrest.

As reported by Oregon News, Niger’s military junta and US officials, had a crucial meeting during which the latter conveyed apprehensions regarding Russia’s growing military involvement in the nation. Niger made the “announcement” immediately after the meeting. Additionally, concerns were raised about attempts by the junta to renegotiate mining contracts with potential implications for energy leverage against Western interests. 

Let’s learn how Russia’s pursuits for Africa’s critical minerals can impact the country and its global resource acquisition efforts.  

Russia’s Quest for African Mineral Resources

One of the focal points of Russia’s interest lies in rare earth elements (REEs), essential components in various high-tech applications, including electronics, renewable energy technologies, and defense systems.

Africa boasts 30% of the world’s mineral reserves, making it an attractive target for resource-hungry nations like Russia.

The Democratic Republic of Congo (DRC) emerges as a prime target in Russia’s mineral quest, given its abundant cobalt reserves, a crucial element in lithium-ion batteries powering EVs and smartphones. Russia’s interest in cobalt aligns with its ambitions to establish a stronger foothold in the rapidly expanding electric vehicle market.

In addition to cobalt, Russia has set its sights on other critical minerals such as lithium, vanadium, and platinum group metals. All these REEs are indispensable to modern industries involved in energy storage, battery and catalytic converters, etc.

Furthermore, Russia had always weighed minerals as a currency. They have intervened in Africa to bolster their control through paramilitary means. By providing security and employing intimidation tactics, Russia grabbed lucrative mining agreements. Furthermore, it offers military support to sustain the weaker regimes.

Russian tactics are in absolute contrast to the Western nations. The country operates ruthlessly without considering human rights, democracy, or legal frameworks.

Russia Intensifies Use of Private Military Companies (PMCs) in Africa

According to media reports, in recent years Russia has increased deployment of private military contractors (PMCs) to put a tight foothold on the continent. PMCs are for-profit organizations that provide combat, security, and logistical services for hire.

Russian PMCs first arrived in Africa under a contract with the Libyan Cement Company in 2017.

One notable example of Russia’s use of PMCs in Africa is its involvement in the Central African Republic (CAR). In 2018, the Russian government signed a military cooperation agreement with the CAR, leading to the deployment of the Wagner Group, the most famous Russian PMC.

Subsequently, the PMCs have swiftly extended their presence into Sub-Saharan Africa. They operate in Sudan, the Central African Republic (CAR), Madagascar, Mozambique, and Libya.

The group trains local armed forces to use Russian-supplied arms, protects Russian-operated gold, uranium, and diamond mines, and acts as bodyguard and advisor to the Central African president.

Africa’s Share of Critical Mineral Wealth

A few years back the World Bank projected that a ~ 500% rise in the production of key minerals and metals like lithium, graphite, and cobalt by 2050 is needed to meet global demand for REEs.

With a focus on revenue within Africa, the McKinsey Group has conducted an evaluation. It states:

Africa could generate between US $200 million and US $2 billion of additional annual revenue by 2030 and create up to 3.8 million jobs by building a competitive, low-carbon manufacturing sector.
Additionally, minerals could play a crucial role in meeting African citizens’ huge housing and transport needs by driving the sustainable development of these sectors. 

Africa holds 40% of the world’s gold and up to 90% of its chromium and platinum reserves. The continent also possesses the largest cobalt, diamonds, platinum, and uranium globally. Zimbabwe has huge lithium potential while Zambia’s copper reserves are capable of substantial revenue generation.

Despite owning 30% of the world’s mineral reserves, Africa accounts for less than 10% of global mining exploration spending. For instance, untapped raw mineral deposits in the DRC are estimated to be worth more than US$24 trillion.

Therefore, accessing Africa’s abundant resources is imperative to achieve these ambitious goals.

Image: Distribution of Africa’s shares of global production of selected critical minerals.

Russia’s Engagement in Africa: Understanding Strategic Motivations

1. Bypassing sanctions: Gold and diamonds provide Russia with a means to circumvent economic sanctions enforced since the invasion of Ukraine. Africa, boasting 40% of the world’s gold reserves and the largest diamond reserves, serves as a key resource hub.

2. Geopolitical influence: As already explained, Russia has established fresh military and political alliances to reduce Western influence in African nations. Specifically, Russia offers “regime survival packages” in exchange for natural resource extraction rights, bolstering its geopolitical standing. This serves as a huge vantage point for native Africans. 

Moreover, Russia’s engagement in African mineral extraction extends beyond traditional mining operations. The Kremlin has forged strategic partnerships and investment deals with African nations, leveraging its resource extraction and infrastructure development. These partnerships often come bundled with political and military agreements, bolstering Russia’s influence in Africa.

A stark example is the Blood Gold Report’s Findings that stated, 

“The Kremlin has earned more than US$2.5 billion from trade in African gold since Vladimir Putin launched his full-scale invasion of Ukraine in February 2022.”

Is Russia’s Intervention Loosening the West’s Grip on Africa? 

The intensification of Russia’s mineral scramble in Africa has raised concerns among Western powers and regional stakeholders. They anticipate worse implications from the geopolitical dynamics and local governance. Critics argue that Russia’s resource-driven approach may exacerbate existing governance challenges, including corruption, environmental degradation, and social unrest.

Furthermore, Russia’s expanding presence in African mineral extraction poses a potential challenge to Western dominance in resource markets. It prompts calls for increased vigilance and strategic engagement from Western policymakers.

Niger’s Recent Decision: A Threat to the West

Niger, the world’s seventh-largest producer of uranium, supplies France this vital resource for nuclear power generation. Apart from uranium, Niger has abundant natural resources of coal, gold, iron ore, and phosphates.

However, Niger’s recent decision to temporarily halt the issuance of new mining licenses highlights the challenges faced in maintaining stable supply chains.

Niger’s situation exemplifies the broader concern regarding Russia’s increasing influence in African nations.

It poses a looming threat to the West in securing its critical mineral supply chains. The withdrawal of US troops from neighboring Chad is another testament to the burgeoning geopolitical tensions.

Jack Watling, land warfare specialist at the Royal United Services Institute (Rusi) has examined the situation and commented,

“While lithium and gold mines are clearly important, in Niger the Russians are endeavoring to gain a similar set of concessions that would strip French access to the uranium mines in the country.”

Image: Share of Africa’s critical minerals and their global demand projections 

As Russia continues to deepen its involvement in Africa’s mineral sector, the geopolitical implications will likely reverberate far beyond its borders. Balancing the economic opportunities with the geopolitical risks inherent in this mineral scramble will be paramount for both African nations and the broader international community.

FURTHER READING: Africa Clean Sweeps into $900B Global Carbon Credit Economy (carboncredits.com)

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The European Commission’s move to address greenwashing practices among airlines is significant. Greenwashing, especially in industries as impactful as aviation, undermines consumer trust and misleads individuals about the environmental consequences of their choices. 

Air France, its Dutch subsidiary KLM, and Lufthansa’s Brussels Airlines are among the 20 airlines under investigation by the European Union for potential greenwashing practices. It’s unclear which other airlines have received a letter from the EC.

Eco-Friendly Flight or Marketing Mirage?

The Consumer Protection Cooperation (CPC) works with the European Commission to enforce EU consumer protection laws. They address cross-border issues, triggered in this case by a BEUC alert about misleading green claims by airlines.

The European Green Deal and the New Consumer Agenda prioritize sustainability and combatting greenwashing. Directives like the one on unfair commercial practices prohibit misleading actions. 

Additionally, the proposed Green Claims Directive aims to enhance consumer protection by requiring traders to substantiate explicit environmental claims and be transparent about offsetting claims, specifying the portion that relies on buying carbon offsets. The Directive ensures that traders adhere to requirements when making claims about the environmental performance of products. 

The involvement of the CPC emphasizes the collaborative effort to enforce EU consumer laws and hold airlines accountable for their practices. This approach sends a clear message to the industry that greenwashing will not be tolerated.

BEUC’s advocacy and the support of consumer organizations further highlight the growing awareness and demand for genuine sustainability efforts. Consumers deserve accurate information to make informed choices, and actions like this help protect their rights.

Legal Eagles vs. Misleading Claims: Aviation Edition

The recent legal rulings against KLM and Austrian Airlines demonstrate the consequences of misleading advertising in the aviation sector. Such rulings set precedents and serve as deterrents for other airlines engaging in similar practices.

The EC, along with EU consumer authorities, is targeting misleading claims regarding the environmental impact of flying. They particularly focus on airlines’ assertions that carbon emissions can be offset through additional fees or the use of sustainable aviation fuel (SAF).

SAF is from renewable and sustainable resources, offering a way to reduce emissions when combined with fossil-based jet fuel. It’s a “drop-in” fuel, meaning airlines can use it without modifying their existing infrastructure. SAF is viewed by experts as a highly promising solution for accelerating the aviation sector’s transition to a low-carbon future.

RELATED: Google Signs Up Shell’s SAF Program to Cut Business Travel Emissions

The identified misleading practices include:

Creating the incorrect impression that additional fees can fully counterbalance CO2 emissions.
Using the term “sustainable aviation fuel” without adequately justifying its environmental impact.
Using terms like “green,” “sustainable,” or “responsible” without clear justification.
Claiming to move towards environmental performance like net zero emissions without verifiable commitments, targets, and monitoring systems.
Presenting flight emissions calculators without scientific proof of reliability.
Comparing flight emissions without providing sufficient information on the methodology.

These actions follow the EU Commission’s legislative proposals aimed at protecting consumers from greenwashing. These include updates to directives like the unfair commercial practices directive (UCPD) and the consumer rights directive (CRD). These updates aim to include green transition aspects and introduce rules banning unverified environmental claims and requiring independent verification of green claims.

Věra Jourová, EC Vice-President for Values and Transparency, emphasized the importance of providing consumers with accurate and scientific information, saying:

“More and more travelers care about their environmental footprint and choose products and services with better environmental performance. They deserve accurate and scientific answers, not vague or false claims. The Commission is fully committed to empowering consumers in the green transition and fighting greenwashing.” 

EU’s Greenwashing Battle Plan

The European Commission and CPC authorities have taken proactive steps to address concerns regarding environmental marketing claims made by airlines under EU consumer law. By inviting companies to provide responses within a specific timeframe and organizing meetings to discuss proposed solutions, the Commission is fostering dialogue and collaboration to ensure alignment with consumer legislation.

The process involves:

Invitation for Response: Companies have 30 days to outline proposed measures to address concerns raised about their environmental marketing claims.
Dialogue and Discussion: Following receipt of replies, the Commission will organize meetings with the CPC network and the airlines to discuss proposed solutions.
Monitoring Implementation: The Commission will monitor the implementation of agreed-upon changes to ensure compliance with EU consumer law.
Enforcement Actions: If airlines fail to take necessary steps to address concerns, CPC authorities have the authority to take further enforcement actions, including sanctions.

Overall, these legislative measures and directives aim to promote transparency and combat greenwashing, particularly involving airlines’ use of carbon offsets. By targeting airlines that make misleading claims about use of carbon offsets or the sustainability of flying, the Commission is taking a proactive step toward ensuring transparency and accountability in the sector.

The post EU Takes Action Against 20 Airlines for Greenwashing Claims appeared first on Carbon Credits.

President Joe Biden’s signature climate legislation, the Inflation Reduction Act (IRA), has sparked a multibillion-dollar market for clean energy tax credits within a short span of time. This surge in activity is driven by a provision in the IRA that allows project developers and manufacturers to directly sell their credits for cash, thereby facilitating the “transferability” of tax breaks. 

Guidance from the US Treasury Department and Internal Revenue Service confirmed that this provision covers 11 types of tax credits.

Revolutionizing Clean Energy Financing

Previously, developers had to navigate more restrictive and complex tax equity deals, which limited their access to capital from a relatively small pool of investors, mainly large financial institutions. The IRA has changed this landscape, freeing up capital for deployment at a faster pace.

Frank Burkhartsmeyer, CFO of battery storage developer GridStor LLC, noted that the IRA has accelerated the energy storage industry’s ability to deliver cost-competitive zero-emission capacity. This is particularly true in areas where renewables have outpaced capacity market growth.

GridStor recently announced its first tax credit sale to JPMorgan Chase & Co. to support its California Goleta Battery Storage Project. The transaction exemplifies a broader trend of record solar PV and battery storage installations in the US. This is driven by the IRA’s impact on clean power financing.

RELEVANT: US Energy Storage Rises 59% Amidst the Era of EVs and Lithium

The IRA has particularly boosted the battery storage business by providing new investment tax incentives and offering an alternative to traditional tax equity financing structures. Now, developers have the option to sell tax credits for cash, attracting more corporate taxpayers to support various projects.

Market participants and analysts emphasize that the IRA has diversified the pool of potential investors. This leads to more competitive pricing and attractive financing structures for financial giants like JPMorgan Chase and Bank of America. 

Arevon Energy Inc. President and CEO Kevin Smith highlighted the importance of a robust tax credit transferability market to meet the needs of the renewable energy industry, noting that:

“There’s no question that in order for the financial markets to meet the requirements of the growing renewable energy industry, it’s going to take a robust tax credit transferability market…That means we need other players entering into the market, and we are seeing other players entering in.”

Arevon recently secured financing for its Condor Battery Storage Project in California with $350 million. This comes along with commitments from Stifel Financial Corp. to purchase investment tax credits. 

Unleashing the Potential of Clean Energy Tax Credits

The tax credit transfer market saw a significant surge in activity in 2023, reaching an estimated $7 billion to $9 billion, according to Crux Climate Inc. This momentum is expected to continue, with Crux CEO Alfred Johnson anticipating the market to double in size in 2024. 

Crux has witnessed substantial interest, with nearly $9 billion in tax credits available for sale on its platform. Buyers are submitting around $1.5 billion in bids in the first quarter of 2024, primarily targeting renewable energy and battery storage projects.

RELEVANT: US Corporations Ramp Up Renewable Energy, Amazon Leads the Pack

The surging renewables and battery storage markets will fuel the growth of the clean energy tax credits market. Some analysts believe that this financial mechanism is more effective than carbon pricing. 

That’s because a carbon price, though generating revenue for the government, results in the highest electricity prices. In contrast, energy costs are lesser in clean energy tax credits market. 

For instance, a study conducted on a clean energy tax revealed that its benefits are 4x higher than its costs. The chart shows the cost and benefits of the “Build Back Better” policy. 

Moreover, the authors found that on a cost per tonne of CO2, the tax incentives tend to bring higher emission reductions than other climate policies available. 

Scaling Up for the Clean Energy Future

Johnson from Crux emphasized the need for the clean energy tax credit market to scale up considerably to meet future demand, aiming for a $50 billion market by the end of the decade. This expansion requires increased participation, efficiency, and standardization across the market.

Diversifying the pool of tax credit buyers, including large banks, smaller financial services firms, and companies from various industries such as industrial, energy, retail, and technology, can help mitigate economic uncertainties and regulatory challenges. By broadening the participation base, the market becomes more resilient to shocks affecting specific sectors.

Reunion Infrastructure Inc., another marketplace for tax credit transfers, has also experienced significant growth, with over $6 billion in credits available for sale on its platform. CEO Andy Moon projected the market to exceed $80 billion by 2030, indicating robust long-term growth potential.

The market’s rapid expansion is evident from various industry estimates, with projections ranging from $4 billion – $9 billion in 2023. S&P Global Commodity Insights executive emphasized the market’s extraordinary growth rate, despite being fundamentally unproven. 

This growth trajectory underscores the market’s potential to become a significant player in clean energy financing. As more deals are completed and more buyers enter the market, the transfer credit market would become increasingly robust and will play a pivotal role in accelerating the transition to a sustainable energy future.

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