Yellen warns of risks of over-concentration of clean energy supply chains
Tuesday, 15 August 2023
LAS VEGAS, Aug 14 (Reuters): The United States (US) is working to build resilient, diversified clean energy supply chains to protect its economic security, while guarding against the risks posed by over-concentration in a handful of countries, US Treasury Secretary Janet Yellen said in remarks prepared for an event in Las Vegas on Monday.
Yellen will touch on the challenges of transitioning away from fossil fuels in a major speech she will deliver after touring a union facility where workers are learning skills to work on clean energy projects.
Yellen's speech comes days before the one-year anniversary of the Inflation Reduction Act (IRA), which includes $500 billion in new spending and tax breaks that aim to boost clean energy, reduce healthcare costs, and increase tax revenues.
Yellen plans to laud the continuing resilience of the US economy while underscoring the importance of key legislation like the IRA in helping to rebuild the US manufacturing base and "reduce chokepoints, mitigate disruptions, and protect our economic security."
"As we move away from fossil fuels, we remain concerned about the risks of over-concentration in clean energy supply chains," she said in excerpts of the speech obtained by Reuters. "Today, the production of critical clean energy inputs - from batteries to solar panels to critical minerals - is concentrated in a handful of countries."
A report by the International Energy Agency earlier this year noted that China holds at least 60 per cent of the world's manufacturing capacity for most mass-manufactured technologies, such as solar photovoltaic and wind systems, and 40 per cent of electrolyser manufacturing.
It said critical minerals needed for these industries were also highly concentrated, with the Democratic Republic of Congo supplying 70 per cent of cobalt, China 60 per cent of rare earth elements, and Indonesia 40 per cent of nickel. Australia accounts for 55 per cent of lithium mining and Chile for 25 per cent, it said.