The energy transition and green mineral value chains: Challenges and opportunities for Africa and Latin America

ABSTRACT

There is growing momentum to address climate change and other environmental challenges through a ‘green energy transition’, that is, a shift from fossil fuel-based energy sources to renewable sources such as wind and solar. To carry out this global transition, a variety of resources – particularly minerals such as copper, lithium or cobalt – are required, and these are primarily extracted in the ‘Global South’. This means that these resource-rich countries face a double transition: the transition in their energy supplies, and the transition in their mining sectors. This special issue brings together different perspectives on the green energy transition and mineral value chains from Latin America and Africa. The articles investigate challenges for these countries, but also the opportunities that could potentially unfold as part of these far-reaching changes.

KEYWORDS:

• Energy transition
• mineral supply chains
• Africa
• Latin America
• geopolitics

With the Paris Agreement of 2015, 194 parties – 193 countries and the European Union (EU) – agreed to increase common efforts to limit global warming to 1.5°C. The most important element of the Paris Agreement was the introduction of the nationally determined contributions (NDCs) of the participating countries, an arrangement under which each country lays out a path towards reducing carbon emissions.¹ At the heart of these decarbonisation strategies is a shift away from fossil fuels to renewable energy sources, such as wind and solar power. This transition can be understood as a process rather than a radical transformation: ‘Rather than completely shifting from one set of dominant energy resources to another, energy transition involves the phasing out of fossil fuels, while increasing renewable energy resources such as solar and wind, which used to occupy only a small share of the energy mix’.²

Historically, countries in the Global South have emitted far less carbon and have thus contributed less to the current effects of climate change than industrialised countries. Even so, by signing the Paris Agreement, they have committed to a change in their energy supply. While industrialised countries owe a large part of their economic development to the use of fossil fuels, countries in the Global South are embarking on a new development path based on the use of renewable energies and new technologies.³ This has triggered discussions about the question of justice in this global transformation – and coined the term ‘just energy transition’.⁴

The discussion around the ‘just energy transition’ encompasses various dimensions of justice: on the one hand, there is the question of how industrialised countries can support others in successfully implementing their energy transformation. The transformation of the energy supply is associated with high technical effort and immense financial costs. Therefore, the conceptualisation of the energy transition should not be understood as a decoupled regional process but rather as an integrated global endeavour that entails immense efforts for international cooperation.⁵ On the other hand, the necessary implementation of the energy transformation sets in motion social negotiation processes between different actors in many countries that offer particularly high potential for social conflict. This means that the ‘success and implementation of justice-oriented transformation policies are context-dependent’.⁶ To understand what drives a successful transformation therefore requires investigating ‘social costs (…) as part of any just energy transition’.⁷

This applies in particular to those countries that not only have to convert their energy supply, but are also massively dependent on the extraction of fossil fuels, especially of oil and coal, for their state revenues. The successful implementation of the energy transformation goes hand in hand with the increasing demand for minerals and metals.⁸ Thus, it does not render resource extraction completely irrelevant, but rather leads to a shift away from a certain set of raw materials (such as coal) to another (eg, lithium, graphite, cobalt). Resource-rich countries are therefore faced with a double transition or a ‘double burden’⁹: on the one hand, the transition of their energy supply and, on the other, the transition of their mining sector. This leads to different perspectives, narratives and approaches employed by countries in different world regions. While approaches to implement green transition measures in the Global North usually focus on addressing environmental challenges with market-based and technological solutions, (resource-rich) countries in the Global South focus on advancing the green transition by increasing their raw material production.¹⁰

Growing tensions between China and the United States (US) as well as a shaky multilateral world order since the Russian invasion of Ukraine, has intensified the competition between states over access to minerals and metals. These new geopolitical dynamics have prompted players from the Global North, particularly the EU as well as the US, to reduce their dependency on China by diversifying their supply chains and expanding their trade relations with other resource-rich countries.¹¹ Increasingly, the focus here is also on countries on the African and Latin American continents that are themselves heavily dependent on fossil fuels.¹² Some of them are already long established raw material exporters, while others are now able to seize the potential of their previously untapped reserves.¹³

The goal of this special issue is to bring the perspective of these Global South actors into view and to consider what risks and what opportunities they face as a result of the double transition noted above as well as the rising global geopolitical competition characterising the current period. So far, there have been only a few attempts to intensively cooperate internationally (between the North and South) to foster increased value or alternative modes of production and energy sources. Existing programmes such as the just energy transition partnerships represent first steps on a long journey to comprehensive cooperation on a joint approach towards a global energy transition.¹⁴ However, the needs of raw material-producing countries are often not sufficiently integrated into approaches for global climate change mitigation.¹⁵

While these shortcomings create an imbalance in the current concept of a global energy transition, they also offer potential for the development of more innovative and therefore more promising policy approaches for these states to themselves also take into account in discussions at the national level.¹⁶ This ownership by states in the Global South, and their efforts to implement a green industrialisation programme with a focus on the future of the minerals sector, is significant because it makes these states less dependent on global uncertainties and helps all parties to move away from quick solutions. It also offers opportunities to formulate forward-looking reform programmes for the minerals sector.¹⁷ To succeed, the sustainable energy transition must be understood in a holistic way. Such an understanding will require recognising, firstly, the mutual dependence of countries importing and exporting raw materials, and secondly, the particular challenges and opportunities with regard to their minerals sector vis-à-vis the inclusion of national development interests.

A sustainable energy future will require re-conceptualising ‘green energy’ in a more integrated framework. Within this framework, the issue of sustainability also needs to be integrated more holistically. Ultimately, this raises the question of how to implement global sustainability standards, to which states worldwide have committed themselves through the adoption of the UN Sustainable Development Goals (SDGs). With the adoption of the SDG agenda, countries around the world have committed to implementing these goals. At the same time, implementation has progressed differently in different countries. In the meantime, however, the pressure on resource-rich countries is increasing, especially in the raw materials sector, through the adoption of national laws or the discussion around the introduction of a European law to regulate sustainability and due diligence in supply chains.¹⁸ On the one hand, this is in the interest of many states in the Global South, which have been calling for the regulation of supply chains with regard to sustainability and human rights for many years;¹⁹ on the other hand, commodity exporters in particular now have to meet additional requirements on top of the already high geopolitical and economic challenges they face.

In this special issue, we contribute to this endeavour by bringing together different perspectives on the green energy transition and mineral value chains from Latin America and Africa. In doing so, the authors seek to paint a picture that represents not only the challenges associated with the global energy transition, but also the opportunities that could potentially unfold as part of these far-reaching changes.

First, Melanie Müller discusses in her article how the hunger for (critical) minerals for the energy transition in the Global North hold challenges but also opportunities for mineral-rich sub-Saharan African countries. Müller provides a comprehensive overview of current geopolitical dynamics regarding the tensions arising over access to minerals for the green transition. She emphasises the role of China, as a broker between minerals-exporting countries, especially in Africa, and countries in the EU, which are dependent on mineral imports. Thereby she shows how as a consequence of the current international crisis, a ‘new geopolitics’ of mineral supply chains is currently on the rise with the potential to restructure mineral supply chains; this situation represents challenges but also opportunities, especially, Müller argues, for African exporting economies.

Christopher Vandome directs the readers’ attention towards Zambia, demonstrating how the Hichilema government managed to balance tensions between the international and local priorities concerning international investment for national benefits. Zambia did so by broadening its economic diplomacy and the development of a holistic policy strategy, which Vandome argues is needed in the future. Therefore, this case can serve as an example for African countries to gain agency when developing policies for exploiting their potential in terms of resource rents.

Saliem Fakir in his essay, as well as Krish Chetty et al in their research article, targets South Africa’s Just Energy Transition (JET) as one example of an African approach towards a sustainable energy transition. In his essay, Fakir asks how the South African Just Energy Transition Partnership (JETP) may serve as driver for a transformative transition towards more sustainability in an emerging country and discusses where international partnerships can be useful within the process of building local ownership and fostering institutional mechanisms as a move towards a just transition. Chetty et al, taking the case of wind farms where local developers partner with international companies in the context of the South African Renewable Energy Independent Power Producer Programme (REIPPPP), shows what is needed to make these wind farms work according to the principles of a just transition.

South Africa also provides the case study for Faizal Ismail’s article. The author argues that a policy focus on the ‘just energy transition’ – referring to the transition from a high to low carbon economy – is insufficient to tackle climate change. A better concept is offered, Ismail suggests, by climate resilient development (CRD), which broadens the view by including adaption and resilience. Connecting these aims with plans for a local green industrialisation would be a holistic approach, which he suggests be implemented with South Africa’s regional partners and more engagement in multilateral fora.

The topic of different forms of possible new partnerships are also present in the articles of Pedro Alarcon and Jan Ickler, who both look at the challenges and opportunities of the JET for Latin America. Alarcon shows how in South American states such as Ecuador and Colombia – where the narrative of national development is inextricably linked to ‘extractivism’ and the dependence on fossil fuels – a global energy transition requires the breaking of new ground, including technological innovation and an improved cooperation between the Global North and Global South. Jan Ickler provides a closer look at Ecuador’s energy politics and its development strategy based on the extraction and export of raw materials. He describes how rent dependence functions as a resource-driven development model in Ecuador, where despite the ‘sustainability’ concept becoming more prominent within national strategies, the entrenched driver of ‘rent’ remains a formative power – a discourse echoed in many Latin American countries. The article shows that the question of rent distribution is a key factor for overcoming old dependencies.

Without taking into consideration geopolitical dynamics as well as unequal socioeconomic structures within countries of the Global South – in addition to the power asymmetry between North and South – the transition cannot be just. As Hirsch et al formulate, ‘justice in how the burdens and opportunities of the energy transition are shared, and justice to nature and for future generations’ are valid claims in a needed justice discourse.²⁰ The contributions in this special issue shed light on some of these areas. The articles show that the Global North, the EU in particular, cannot focus only on advancing their own energy transition. Current geopolitical tensions are leading most highly industrialised countries to focus on strengthening their own industrial base, trying to secure the necessary access to raw materials, green technologies and a secure energy supply. The EU is also on this path, seeking greater economic autonomy and the ‘de-risking’ of strategic supply chains. In this, diversification of these supply chains is essential. To this end, however, the EU and other states in the Global North need to build new partnerships – as well as strengthen existing partnerships – and engage more actively at the international level. In doing so, the EU must be honestly representing its interests – vis-à-vis security as well as sustainability – even as it works at the multilateral level to meet the demands of the Global South. Only in this way will the international community establish a viable mode of cooperation that ultimately contributes to a just transition globally.

Many Global South countries are facing challenges with the disruptions of the energy transition: Historic rent dependencies, unequal distribution mechanisms and a lack of integration into global supply chains hamper their options. Many governments, however, are choosing to actively re-evaluate and re-design their domestic and foreign policy strategies in order to address these challenges, as well as to seize the opportunities generated by increasing demand for minerals and green energy. The global endeavour for new partnerships, and in some instances international cooperation, represents a window of opportunity for a variety of Global South countries.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This article was created as part of the research project ‘Transnational Governance of Sustainable Commodity Supply Chains’, which was funded by the German Federal Ministry for Economic Cooperation and Development (Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung, BMZ).

Notes on contributors

Melanie Müller

Melanie Müller is a Senior Associate with a focus on Southern Africa at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik, SWP) in Berlin and head of two research projects with a focus on mineral supply chains. She has been working on political and social developments in South Africa since 2011. Melanie Müller has also conducted research in other countries of the SADC region and in Niger and Ghana and has published extensively on the political and socioeconomic developments in Southern Africa, on resource governance and migration, as well as on European-African relations.

Meike Schulze

Meike Schulze is a Research Associate at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik, SWP) in Berlin. At SWP, she works on the project ‘Transnational Governance of Sustainable Commodity Supply Chains’ and focuses on the Southern African region. Her research centres on sustainability governance of global supply chains, geopolitics and industrial policy relating to mineral resources. She holds an MA in Political Science from Free University of Berlin and an MSc in Public Policy and Human Development from the United Nations University-MERIT and Maastricht University.

Svenja Schöneich

Svenja Schöneich is an Associate at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik, SWP) in Berlin, where she is working on the project entitled ‘Transnational Governance of Sustainable Commodity Supply Chains’. Svenja has worked in Mexico, Chile and Peru. Her research interests focus on resource extraction in Latin America as well as on transnational mineral supply chains.

Notes

1 United Nations (UN) 2023, https://www.un.org/en/climatechange/paris-agreement.

2 Xinxin Wang and Kevin Lo, “Just Transition. A Conceptual Review,” Energy Research & Social Science 82 (2021), https://doi.org/10.1016/j.erss.2021.102291.

3 Annalisa Saveresi, “The Paris Agreement: A New Beginning?” Journal of Energy and Natural Resources Law 34, no. 1 (2016): 16-26, https://doi.org/10.1080/02646811.2016.1133983.

4 Sanya Carley and David M. Konisky, “The Justice and Equity Implications of the Green Energy Transition,” Nature Energy 5 (2020): 569–77, https://doi.org10.1038/s41560-020-0641-6.

5 Andreas Goldthau, Laima Eicke and Silvia Weko, “The Global Energy Transition and the Global South,” in The Geopolitics of the Global Energy Transition, ed. Manfred Hafner and Simone Tagliapietra (Lecture Notes in Energy, 73, Cham: Springer, 2020), 319–39, https://doi.org/10.1007/978-3-030-39066-2_14.

6 Wang and Lo, Just Transition. A Conceptual Review.

7 N. Healy and J. Barry, “Politicizing Energy Justice and Energy System Transitions: Fossil Fuel Divestment and a ‘Just Transition’,” Energy Policy 108 (2017): 451–59.

8 International Energy Agency (IEA), “The Role of Critical Minerals in Clean Energy Transitions,” World Energy Outlook Special Report, 2021, https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions.

9 Astrid Becker, “The Global South’s Double Burden,” International Politics and Society (Berlin: Friedrich-Ebert-Stiftung, 2021). https://www.ips-journal.eu/topics/economy-and-ecology/the-global-souths-double-burden-5539/.

10 Jill Tove Buseth, “Narrating Green Economies in the Global South,” Forum for Development Studies 48, no. 1 (2020): 87–109.

11 Antonio Andreoni and Simon Roberts, Geopolitics of Critical Minerals in Reneweable Energy Supply Chains (Cape Town: African Climate Foundation, 2022). https://africanclimatefoundation.org/wp-content/uploads/2022/09/800644-ACF-03_Geopolitics-of-critical-minerals-R_WEB.pdf; Jane Nakano, The Geopolitics of Critical Minerals Supply Chains (Washington, DC: Center for Strategic and International Studies, 2021), https://www.csis.org/analysis/geopolitics-critical-minerals-supply-chains.

12 Melanie Müller, Christina Saulich, Svenja Schöneich and Meike Schulze, “From Competition to a Sustainable Raw Materials Diplomacy,” SWP Research Paper 2023/RP 01 (Berlin: Stiftung Wissenschaft und Politik, 2023), doi:10.18449/2023RP01.

13 Morgan D. Brazilian, “The Mineral Foundation of the Energy Transition,” The Extractive Industries and Society 5, no. 1 (2018): 93–7.

14 Elisabeth Hege et al., Just Energy Transition Partnerships in the Context of Africa-Europe Relations: Reflections from South Africa, Nigeria and Senegal (Ukama, 2022). https://www.iddri.org/sites/default/files/PDF/Publications/Catalogue%20Iddri/Rapport/Ukama_Synthesis_v02.pdf; paul Upham, Benjamin Sovacool and Bipashyee Ghosh, “Just transition for industrial decarbonisation: A framework for innovation, participation, and justice,” Renewable and Sustainable Energy Reviews, 176 (2022) Article 112699, https://doi.org/10.1016/j.rser.2022.112699.

15 Saliem Fakir, Challenging Climate Diplomacy on Adaptation – A New Approach to the Africa-Europe Partnership Climate Discussions (Berlin: African Policy Research Institute, 2021). https://afripoli.org/challenging-climate-diplomacy-on-adaptation-a-new-approach-to-the-africa-europe-partnership-climate-discussions.

16 Bentley Allan, Joanna I. Lewis, and Thomas Oatley, “Green Industrial Policy and the Global Transformation of Climate Politics,” Global Environmental Politics 21, no. 4 (2021): 1–19; Tilman Altenburg and Claudia Assmann, ed., Green Industrial Policy: Concept, Policies, Country Experiences (Geneva; Bonn: UN Environment; German Development Institute, 2017).

17 Benham Zakeri, et al., “Pandemic, War and Global Energy Transitions,” Energies 15, no. 17 (2022): 6114, doi:10.3390/en15176114.

18 Müller et al., From Competition to a Sustainable Raw Materials Diplomacy.

19 Sikho Luthango and Meike Schulze, “The EU and the Negotiations for a Binding Treaty on Business and Human Rights,” SWP Comment 2023/C16 (Berlin: Stiftung Wissenschaft und Politik, 2023), https://doi.org/10.18449/2023C16.

20 Thomas Hirsch, Manuela Matthes and Joachim Fünfgelt, eds. Guiding Principles & Lessons Learnt For a Just Energy Transition in the Global South (Berlin: Friedrich-Ebert-Stiftung, 2017), https://library.fes.de/pdf-files/iez/13955.pdf.