The Role of Mineral Raw Material Imports in Driving the Energy Transition

Abstract

This study contributes to the mineral-energy nexus by investigating the effect of importing mineral raw materials (ores and concentrates) in facilitating subsequent progress in the energy transition among 33 countries over the years 1992-2015. We focus on net imports of ores and concentrates for five energy transition minerals (copper, aluminum, nickel, cobalt, and manganese) and present an economic production framework to link the mineral raw materials with renewable electricity generation shares. The distinction between mineral raw materials and processed/refined inputs is important because processing capabilities vary among nations, influencing their import-export dynamics and energy transition strategies. Our empirical analysis based on a fixed effects regression model shows that the previous year’s net imports of the five mineral raw materials are positively correlated with the current year’s renewable energy generation, after controlling for other drivers of the energy transition. This finding suggests the relative importance of mineral processing capabilities in enabling the energy transition among net importers of mineral raw materials.

Keywords: renewable energy, metals, Critical minerals, environmental policy stringency, Energy Efficiency