Raw material demand and geopolitical risk in carbon-neutral futures

Raw materials are essential for robust global pathways towards carbon-neutral futures. However, many raw materials are subject to geopolitical risks, meaning that potential supply bottlenecks can be an obstacle to a rapid transformation of the energy system towards carbon neutrality. In order to investigate this in more detail, we combine integrated assessment modelling, material flow analysis and a scenario-level geopolitical risk assessment in this study. We show that the total raw material demand for construction and operation of the energy and transport system decreases when considering both, fossil fuels and non-fuel raw materials for the construction of technologies. However, the expected sharp increase in demand for many raw materials in clean energy and transport technologies requires a steep ramp-up of the global raw material production to avoid supply shortages and corresponding price increases. Ambitious system transformation leads to lower total raw material costs compared to a business-as-usual scenario and – depending on assumptions on raw material price development – than today. Finally, scenario-level geopolitical supply risk factors (country concentration and weighted country risk of raw material supply) depend only weakly on the degree of defossilization of the energy and transport system. The declining raw material costs are thus the main driver for a considerable reduction in geopolitical-economic dependencies of ambitious climate protection compared to business-as-usual strategies.