Strategic Choices in the Energy Transition: Understanding Risks Related to Critical Raw Materials
The energy transition in the Netherlands is driving a growing demand for critical raw materials. A new analysis by the Netherlands Materials Observatory (NMO) shows that choices in energy system planning will significantly influence how this demand will evolve in the future. Depending on the options - more wind energy, more electrolysis, more CO₂ storage or continued reliance on natural gas - the need for specific raw materials will shift, each carrying its own risks related to security of supply and dependence on European production capacity for energy technologies.
Vulnerable supply chains
Scaling up wind turbines, solar panels, batteries, and electrolysers requires materials such as lithium, cobalt, iridium, and rare earth elements. These resources are scarce, and their extraction is often concentrated in a few non-European countries. This makes supply chains vulnerable and poses a risk to the success of the energy transition.
Material flows in a climate-neutral energy system
Based on the TNO study ‘Towards a sustainable energy system for the Netherlands in 2050’, two scenarios were compared for a future climate-neutral energy system:
- ADAPT: In this scenario, changes in industry and consumer behaviour remain limited , the current economic structure is largely maintained, and fossil fuel use decreases but does not disappear entirely. CO₂ storage is combined with renewable energy. Total energy demand increases.
- TRANSFORM: This scenario focuses on energy saving, electrification, and innovative technologies. CO₂ storage plays a limited role, and consumers adopt more sustainable lifestyles, with less meat consumption and fewer flights. Total energy demand decreases.
In both scenarios, material flows for many critical raw materials increase, especially after 2030. The largest volumes relative to current global production are expected for lithium, iridium, cobalt, and ruthenium, followed by vanadium, nickel, dysprosium, terbium, and tantalum. These materials are essential for batteries, electrolysers, steel alloys, and NdFeB magnets in wind turbines and heat pumps, making them strategically important for the energy transition. Many of these raw materials are also crucial for developing European production capacity for energy technologies, which further underscores their importance for strategic autonomy.
Timely investments in recycling
The rapid scale-up projected from 2030 onward increases pressure on supply chains and leads to a sharp rise in material flows. After 2040, substantial end-of-life streams will emerge, making timely investments in recycling infrastructure essential to support a circular economy and reduce dependence on primary raw materials.
See the full results in the report: ‘Analysis of Critical Material-Related Risks of a Climate-Neutral Dutch Energy System’ .