Panel
Energy Transition: Critical Minerals, Climate Tech, & Policy Shifts | Middle East and Africa Summit
Milken InstituteJohn Defterios, His Excellency Majid Al Suwaidi, Lucie Berger, Frank Fannon, Oskar Lewnowski, Bob Wilt, Majid Al Suwaidi
- Deployment of climate action and investment is predicted to be difficult without a perceived "clear and present danger," with human tendencies toward short-term planning potentially hindering the achievement of the 43% emission reduction target by 2030.
- Questions from a potential second Trump administration regarding the Inflation Reduction Act and COP 28, alongside security-focused framing under the assumption of a Trump presidency, are expected to influence policy, spending, market formation, and capital mobilization.
- Achieving global climate goals is projected to require $9 trillion in annual investment, including $2.4 trillion specifically for the Global South, while nearly 700 million people are expected to remain without access to clean modern energy.
- To meet 2035 and 2050 targets, immediate and large-scale capital deployment is necessary, with specific needs estimated at $800 billion for copper, $2.4 trillion for critical materials, and three times that amount for related infrastructure.
- Mining projects are forecast to require 10 to 15 years to complete, creating a critical timeline risk where feedstock shortages could occur for gigafactories expected to be operational in five years, while the US currently takes 180 days to issue a mining license compared to 18 years in the US, though Saudi Arabia aims to reduce its cycle from 20 to 9 years.
- Supply chain dynamics are expected to shift with upstream assets moving to emerging markets in Latin America and Africa, processing moving to the Middle East and Australia, and a globally integrated chain involving the US, Middle East, Japan, and Korea forming to counterbalance the Belt and Road Initiative.
- The Altera initiative is expected to mobilize $250 billion by 2030 through a $30 billion fund structure to address the current disparity where only 15% of investment flows go to the Global South compared to 85% for the Global North.
- Saudi Arabia plans to deploy approximately $60 billion over the next decade for its transition, while the UAE and Saudi Arabia are expected to provide a counterbalance to China in critical minerals planning, especially given China's export bans and control over 85% of rare earth processing.
- Permitting issues and regulatory delays are identified as the primary bottleneck for the energy transition, with the industry needing to navigate opposing political views on land disturbance and eminent domain, as well as the "NIMBY" model.
- Investment in the transition is expected to be driven by technology and the urgent need for critical minerals regardless of the framing (climate or security), though talent acquisition remains a major concern due to the industry's current perception as manual labor rather than technology-enabled.
- The EU is expected to utilize a "fully carrotized system" of development aid and climate finance, potentially increasing natural gas imports from North Africa to over 14% and investing in renewable capacity in Africa through partnerships with the EIB and Altera.
- Risks include a potential increase in forced and child labor tied to the expansion of the green energy transition, as well as the failure of upstream, midstream, and downstream coordination which would dictate the overall pace of climate change response.