McKinsey Sees Bottlenecks in Strategic Raw Materials

by | 18. Oct 2022 - 13:49 | Economy

The energy transition is not only increasing the need for critical minerals, but also for skilled personnel.

The pace of decarbonization in Europe will have to more than triple to meet the specified target of reducing carbon dioxide emissions by 55 percent from 1990 levels by 2030, writes consulting firm McKinsey & Company in a recent study. Demand for the technologies needed to achieve this, such as photovoltaics, wind energy, as well as batteries and charging infrastructure, will therefore grow strongly, it adds. This would pose new challenges for supply chains, which are already severely impaired.

The entire value chain, from raw materials to the manufacture of wind turbines and similar end products, will be affected. In the case of raw materials, supply bottlenecks and dependence on just a few producing countries are among the greatest risks. This applies above all to rare earths, for which, according to McKinsey, current data indicate a supply shortfall in 2030 and consequently significant price increases. High-grade nickel and lithium could also become scarce from 2025, it adds.

The study also points to the increasing need for skilled workers, as solar plants and other equipment would need to be maintained. Finding technical personnel, in particular, is likely to be difficult. McKinsey therefore advises companies to identify potential problems along the entire value chain and see the situation as an opportunity for innovation and cooperation.

Photo: iStock/WUT789

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