Inflation Reduction Act: North America’s energy transition and critical mineral supply chains

Since 2021, the Biden administration has demonstrated a clear intent to significantly reduce the cost of renewable power; accelerate the transition to electric fleets and to re-shore/near shore much of the critical mineral mining and processing needed to enable the energy transition. The incentives offered within the Inflation Reduction Act 2022 (IRA), therefore, represent policy landmarks in attempting to reach this ambition. However, this aim will require US energy producers and electric vehicle manufactures acquire critical minerals at unprecedented rates, with copper the metal of electrification, and lithium, nickel and cobalt the major components of electric vehicle batteries. As these metals turn increasingly key to energy transition, establishing accurate demand estimates and securing reliable supplies will become crucial elements of industrial strategy—even national security concerns.

The IRA’s implications for critical minerals
S&P Global’s Commodity Insights, Market Intelligence, and Mobility divisions have worked together to produce a brief analysis of the IRA’s projected impact on the demand for four key metals: copper, lithium, nickel, and cobalt.

Join our analysts as we discuss key outcomes of this analysis, including:

• How will the IRA affect demand for electric vehicles in North America? What are the implications for the growth of the electric fleet?
• How much copper, lithium, nickel and cobalt will North America require to meet its carbon emissions goals? How does this compare to conventional demand for these metals?
• What are the main operational challenges to increasing production of these metals in North America? Even if permitting is accelerated, how could partisan politics complicate project planning?
• Which countries does the U.S. rely on for its supplies of these metals? Can these countries’ production capacities rise high enough for long enough to meet new demand generated by IRA tax credits?
• If the IRA is tweaked to expand qualifying sources beyond U.S. Free Trade Agreement (FTA) countries to allies, which countries will be key? Which important sourcing countries fall between allies and foreign entities of concern?
• Can increased collaboration with the EU ease similar concerns over critical mineral sourcing for both economies?