US Weighing Support for Materials ‘Critical’ to Electrification

The Energy Department is exploring strategies for filling supply chain gaps in some of the building blocks of renewable energy, electric vehicles, and the power grid, an agency official said following an assessment of critical energy materials.

The department, which has been doing criticality assessments since 2010, released a list of 18 materials that are crucial globally to energy technologies and face risks of supply disruptions by 2035. The list is highlighted by copper for wind turbines and transmission lines; electrical steel for transformers and electric motors; graphite for electric vehicle batteries; and other major materials like aluminum, nickel, and silicon that are important in electrification.

“We’re including more—including constituents of power electronics, more items, more technologies that are important for electrification across the economy, which is an important aspect of decarbonization,” said Diana Bauer, deputy director of the agency’s Advanced Materials and Manufacturing Technologies Office and an author of the report.

The DOE report contemplates strategies to mitigate the supply crunches. They include expanding US supplies of a listed material, developing alternative materials and technologies, and developing technologies that need less of a listed material to have the same functionality. The department also explores recycling and reuse of a material.

The assessment will also inform eligibility for the Qualifying Advanced Energy Project Credit, known as 48C, a $10 billion tax credit program expanded by the Inflation Reduction Act enacted last August. Projects could be eligible to apply for the credit if they expand clean energy manufacturing and recycling, and critical materials refining, processing, and recycling. The Energy Department accepted concept papers for the credit through July 31.

“With so many resources going towards this area, it’s really valuable and beneficial to have a structure to help us organize and prioritize what we do,” Bauer said, declining to comment further on the 48C credit, which is being run by the Treasury Department. “We’re really excited to be able to take advantage of the moment, help to shape the nation’s agenda.”

Future Trends

The report highlights several trends that have developed in recent years. Global EV sales increased to 10.6 million vehicles in 2022 from 716,000 vehicles in 2015. Offshore wind capacity has doubled, compounding demand for rare earth magnets. Electric expansion and upgrades will grow the global power grid market value by about 52% by 2032.

The DOE’s assessment of future energy trends globally and supply shortages distinguishes it from the critical mineral list compiled by the US Geological Survey (USGS), housed in the Interior Department. The USGS list, with 50 minerals that are incorporated into the DOE list, uses historical data to determine critical minerals within the context of the US economy and national security.

The DOE list includes: aluminum, cobalt, copper, dysprosium, electrical steel, fluorine, gallium, iridium, lithium, magnesium, natural graphite, neodymium, nickel, platinum, praseodymium, terbium, silicon, and silicon carbide.

The DOE’s list includes about a half-dozen materials that are not listed on the USGS list: copper, electrical steel, fluorine, natural graphite, silicon, and silicon carbide.

The addition of copper to the DOE’s list comes amid a monthslong lobbying push from the industry for USGS to enshrine the product on its list.

“Recognizing copper as critical is a first step, and a strong signal of the importance of increasing and strengthening the domestic supply of copper and its various products,” said Andrew G. Kireta Jr., president and CEO of the Copper Development Association.

But with rising demand forecasts, “the US must add copper to the USGS Critical Minerals list without delay before the supply risk increases further,” Kireta said.

The association has been advocating for the Copper is Critical Act, legislation introduced in June by Rep. Juan Ciscomani (R-Ariz.) to formally designate copper as a critical mineral. Arizona accounts for nearly 70% of US copper supply.

Next Steps

Whether listing a mineral or material on a government list moves the needle on accelerating projects is a subject of debate, said Ian Lange, an associate professor of economics at the Colorado School of Mines.

“My colleagues feel it’s important as a signaling device to people that the government is really interested” in the minerals, he said. Lange believes it’s a chance for investors to tout their product, when the economics of any given project drive investor interest more than a listing. In that way, the DOE’s list could help projects secure the 48C tax credit.

“In the sense it’s codifying what we already know, it’s hard to argue it helps,” Lange said.

Bauer said the next steps would be up to a broad array of parties.

DOE has been working on unlocking new sources of neodymium, a magnet in wind turbines that has been on the list for years, the agency said. But it has also worked on developing alternative magnets that reduce or eliminate the use of neodymium, improving the efficiency of making neodymium, and recycling the materials from end-of-life magnets.

“The point of the report is to lay this out fairly clearly and in some level of detail so our partners across the government, in the national labs and universities, and industry can work together with us to address this complex challenge,” Bauer said.

—Kellie Lunney contributed reporting.