Critical Materials

Where Scale Meets Scarcity

Developing a new clean technology in a laboratory is only the first step toward widespread adoption. To manufacture millions of batteries, solar panels, electrolyzers, and other climate technologies, industries need reliable access to the raw materials and manufacturing systems required for large-scale production. These materials—often called critical minerals—form the foundation of modern clean energy technologies, but obtaining them creates challenges involving resource availability, environmental impacts, geopolitics, and global supply chains [1].

Unlike traditional energy systems that rely primarily on fossil fuels, many clean technologies require large quantities of specific minerals. As demand for renewable energy and electrification grows, ensuring a stable and sustainable supply of these resources has become a major challenge in scaling climate technologies.

Why are these Critical Minerals Important?

Many clean energy technologies depend on minerals with unique chemical and physical properties. Electric vehicle batteries, for example, require lithium, nickel, cobalt, manganese, and graphite to store and release energy efficiently. Solar panels rely on high-purity silicon, silver, and other specialized materials, while wind turbines require rare earth elements such as neodymium and dysprosium to produce strong permanent magnets [1][2].

These resources are considered critical minerals because they are economically essential but face potential supply risks due to limited availability, complex extraction processes, or concentration in only a few regions. Although these minerals may exist around the world, the ability to extract, refine, and manufacture products from them is often concentrated in specific countries.

The challenge is not only finding enough raw materials but also developing the infrastructure needed to process them into usable components. A country may have large mineral deposits but still depend on other nations for refining and manufacturing capacity, creating vulnerabilities within the supply chain.

Figure 1: Graphical depiction of critical materials, highlighting their importance versus supply risk to show how critical they are [11]

Geopolitics and Global Supply Chain Risks

The supply chains for critical minerals are highly interconnected and often span multiple continents. Materials may be mined in one country, refined in another, manufactured into components elsewhere, and assembled into a final product in another location. This global structure allows industries to access resources efficiently, but it also creates risks when political or economic disruptions occur.

“Extraction or processing of some critical minerals in a few locations, limits diversity. For example, in 2019, 60% or more of lithium, cobalt, and graphite resources were extracted in Australia, Congo, and China, respectively, and 60% or more of lithium and cobalt were processed in China” [3]. Because so much of the global supply depends on a limited number of regions, trade restrictions, conflicts, or diplomatic tensions can affect the availability and cost of essential materials.

Figure 2: Tables listing various critical materials and the countries in which mining of the material is prevalent [4]

Although critical minerals may face short-term supply shortages as demand for clean technologies grows faster than mining and processing capacity, these challenges are unlikely to create the same level of geopolitical dependence as oil and gas. Unlike fossil fuels, critical minerals are widely distributed around the world, and new sources, recycling systems, and alternative materials can help diversify supply chains over time [4].

However, critical materials are still a major focus of international competition. Countries are increasingly working to secure their own supply chains through partnerships with resource-rich nations, investments in domestic mining and processing, and policies designed to reduce dependence on single suppliers.

Figure 3: World map depicting where critical materials are most concentrated [12]

China-Japan 2010 Rare Earth Dispute

The China–Japan rare earth dispute in 2010 demonstrated how geopolitical conflicts can disrupt critical material supply chains. Rare earth elements, including materials such as neodymium and dysprosium, are essential for technologies like electric vehicle motors, wind turbines, and electronics because of their unique magnetic properties.

At the time, China controlled the majority of global rare earth mining and processing capacity. After a diplomatic dispute between China and Japan over contested islands in the East China Sea, China temporarily restricted rare earth exports to Japan, causing concerns about shortages and price increases. Although China did not officially acknowledge the restrictions as a political action, the event highlighted the risks of relying on a single country for critical materials [6].

In response, Japan and other countries began investing in supply chain diversification, including developing alternative suppliers, improving recycling technologies, and reducing dependence on rare earth elements. This example shows how geopolitical tensions can quickly affect access to materials needed for advanced technologies [6].

Expanding Domestic Manufacturing Capacity

To improve supply chain security, many countries are investing in domestic manufacturing capabilities. Building local facilities for mineral processing, battery production, and clean technology manufacturing can reduce reliance on international supply chains while creating new industries and jobs.

In the United States, policies such as the Inflation Reduction Act increase clean technology development and scale-up by creating incentives like requiring only domestic sourcing of critical minerals for its electric vehicle tax credits [7].

2026 investments from the U.S. Department of Energy encourage the development of domestic battery manufacturing and critical mineral supply chains, such as a Notice of Funding Opportunity for up to $500 million to expand the U.S. critical materials processing. These efforts aim to expand production of battery cells, establish recycling infrastructure, and increase access to materials needed for electric vehicles and energy storage [5].

However, developing domestic supply chains is a long-term process. Building mines, refineries, and manufacturing plants requires significant investment, regulatory approvals, and technical expertise. Even when resources are available domestically, creating an entire supply chain from extraction to final product manufacturing can take years.

Battery Materials and the Role of Recycling

The rapid expansion of electric vehicles has highlighted the importance of battery supply chains. Lithium-ion batteries rely on several valuable materials, including lithium, cobalt, nickel, and graphite, making access to these resources essential for increasing battery production. As demand for electric vehicles and grid-scale energy storage grows, the need for these materials is expected to increase significantly [9].

One solution is developing a more circular battery economy through recycling. Instead of relying entirely on new mining, battery recycling allows manufacturers to recover valuable materials from used batteries and reuse them in new products. Recycling can reduce demand for additional mineral extraction, lower environmental impacts, and create a more resilient supply chain [8][9].

See "Li-ion Battery Recycling" article under Innovations for a deep-dive on a specific process explored by Stanford researchers.

Figure 4: A specific method of Li-ion battery recycling developed by researchers at Stanford [13]

Companies and researchers are developing improved recycling methods that can recover higher percentages of valuable materials while reducing energy use and waste. As more electric vehicle batteries reach the end of their useful lives, recycling could become an increasingly important source of critical minerals because it creates a valuable secondary supply source that reduces reliance on mining and importing materials [8].

Figure 5: Depiction of a transition into cobalt-free or reduced cobalt in next-generation lithium batteries [14]

Researchers are also exploring ways to reduce dependence on limited resources by developing alternative materials. For example, sodium-ion batteries use sodium instead of lithium, and newer battery designs are attempting to reduce or eliminate cobalt use (CoFBAT). These innovations could decrease pressure on vulnerable supply chains while making clean technologies more affordable and accessible [10].

See "Batteries" article under the Research Overviews section for more information on types of batteries.

Creating a More Sustainable Material Future

While expanding mineral production is necessary for scaling clean technologies, it must be balanced with environmental and social considerations. Mining can require large amounts of energy and water and may contribute to habitat destruction or pollution if not properly managed.

The future of large-scale deployment will depend on creating supply chains that are reliable, environmentally responsible, and geographically diverse. By combining domestic manufacturing, international cooperation, recycling, and material innovation, industries can overcome resource limitations and build the foundation needed to bring climate technologies from the laboratory into global use.

References

What Are Critical Minerals and Materials? (2025). In Energy.gov. https://www.energy.gov/cmm/what-are-critical-minerals-and-materials
Federal Register :: Request Access. (n.d.). In unblock.federalregister.gov. Retrieved August 4, 2026, from https://www.federalregister.gov/documents/2023/08/04/2023-16611/notice-of-final-determination-on-2023-doe-critical-materials-list
Critical Mineral Resources: National Policy and Critical Minerals List. (2025). In Congress.gov. https://www.congress.gov/crs-product/R47982
IRENA. (2023). Geopolitics of the Energy Transition: Critical Materials. In www.irena.org. https://www.irena.org/Digital-Report/Geopolitics-of-the-Energy-Transition-Critical-Materials
Energy Department Announces $500 Million to Strengthen Domestic Critical Materials Processing and Manufacturing. (2026). In Energy.gov. https://www.energy.gov/articles/energy-department-announces-500-million-strengthen-domestic-critical-materials-processing
Evenett, S., & Fritz, J. (2023). Revisiting the China–Japan Rare Earths dispute of 2010. In CEPR. https://cepr.org/voxeu/columns/revisiting-china-japan-rare-earths-dispute-2010
Barbanell, M. (2023). Overcoming Critical Minerals Shortages Is Key to Achieving US Climate Goals. Www.Wri.Org. https://www.wri.org/insights/critical-minerals-us-climate-goals
Recycling of Critical Minerals – Analysis - IEA. (2024). Recycling of Critical Minerals – Analysis - IEA. In IEA. https://www.iea.org/reports/recycling-of-critical-minerals
Lithium-Ion Battery Recycling | US EPA. (2023). In US EPA. https://www.epa.gov/hw/lithium-ion-battery-recycling
Sustainable alternatives to critical battery materials. (n.d.). In cicenergigune.com. Retrieved August 4, 2026, from https://cicenergigune.com/en/blog/sustainable-alternatives-critical-battery-materials
Critical Materials Factsheet. (n.d.). In Center for Sustainable Systems. Retrieved August 10, 2026, from https://css.umich.edu/publications/factsheets/material-resources/critical-materials-factsheet
Oldcorn, R. (2023, December 13). Strategic Partnerships on Critical Raw Materials in Central Asia. Srk.Com. https://www.srk.com/en/publications/strategic-partnerships-on-critical-raw-materials-in-central-asia
Misleh, J., Wright, G., Charnay, B., & Kanan, M. (2025). Li-ion Battery Recycling by Energy-Efficient, High Throughput Li2SO4 Salt Splitting in a Diaphragm Flow Cell. https://doi.org/10.26434/chemrxiv-2025-md04k
Gourley, S. W. D., Or, T., & Chen, Z. (2020). Breaking Free from Cobalt Reliance in Lithium-Ion Batteries. iScience, 23(9), 101505. https://doi.org/10.1016/j.isci.2020.101505

Page updated

Google Sites

Report abuse