Deep Dive Workshop

Critical Minerals and Clean Energy Technology Manufacturing Supply Chains

Organized by: Asian Development Bank (ADB)

An accelerated clean energy transition in the developing Asia and the Pacific Region is challenged by (i) the need to rapidly ramp up clean energy technology production capacities; (ii) the current geographical and market concentration in existing critical mineral and clean energy technology supply chains; and (iii) long lead times to expand production and manufacturing capacities.  

Amidst global aspirations of net zero emissions, it is critical, and indeed pivotal, that we develop resilient and responsible supply chains for clean energy and renewable energy technologies across developing Asia and the Pacific Region. The need to develop supply chains in these areas offers an opportunity for the countries to position themselves as key players in the global value chains.

Resource-rich countries in the region hold considerable resources vital to a clean energy future. For example, Indonesia and the Philippines together have an estimated 27 percent of global reserves of nickel; and Mongolia is estimated to have rare earth elements equivalent to 17% of global reserves. Kazakhstan holds reserves of nearly all the minerals defined as critical by the European Union to achieve its climate commitment under the Paris Climate Agreement. 

In addition, due to a favorable demographic dividend, low-cost labor, a growing base of related industries, strong and deepening integration into global value chains, an enormous, largely untapped, market for clean energy, and access to deep pools of capital for investments, Asia and the Pacific is well-positioned to become a global powerhouse for clean energy technology manufacturing.

Given the above factors, the development of upstream and mid-stream clean energy technology supply chains holds significant potential to act as a motor for an accelerated clean energy transition. Such development can also transform economic growth, employment, and wider sustainable and inclusive development across the region.

To leverage these opportunities, countries need to create favorable business ecosystems, recalibrate investment incentives, and establish appropriate regulatory frameworks and technical standards that can support the development and scaling up of innovative clean energy solutions. Moreover, economies that are currently fossil fuel-dependent pivot toward the clean energy transition, manufacturing industries in the region will be face significant disadvantages—through mechanisms such as the European Union’s Carbon Border Adjustment Mechanisms, which will add a carbon price to exports and reduce the flow of foreign investment into more carbon-intensive technologies and systems. Countries need enhanced knowledge about technologies and solutions, policy advice, and financial assistance to maximize opportunities from the clean energy transition, and thereby minimize the risks of having assets stranded in low-carbon assets and infrastructure.