The Relationship Between Energy Metal Price Volatility and Clean Energy Assets

Currently, global economies are grappling with the challenges posed by aggressive climate actions aimed at reducing greenhouse gas emissions. These efforts are further complicated by high fuel prices, economic instability, inflationary pressures, and concerns about energy security, all of which are straining the global energy sectors. A proposed solution is a shift towards clean energy alternatives, but the technologies coupled with clean energy heavily rely on energy metals. This has led to increasing demand for these resources. Thus, the relationship between renewable energy metals and the price and volatility of clean energy assets needs to be explored. We analyse the volatility characteristics of the various clean energy sub‐sectors, regional indices, and oil prices and assess their dependence on renewable energy metals. Empirical results indicate that volatility in energy metal prices significantly influences the volatility of all clean energy indices, with the US lithium price having the most pronounced impact. These findings highlight the critical role of energy metal prices as risk determinants in the clean energy sectors. The success of the transition to clean energy may depend on the stability of energy metal markets. This underscores the need for stakeholders to ensure the continued availability and demand stability of these vital resources in our pursuit of clean energy.