APRIL 30, 2025

Greetings from the Windy City! I’m in town to moderate a University of Chicago event on global climate diplomacy Thursday. In town? Join us!

Today’s edition:

• Anca Gurzu uses charts to underscore just how dominant China has become in critical minerals.
• A Voices author suggests ways the Trump administration could boost energy investment in Africa.
• Bill Spindle takes a look at the surge in U.S. oil exports in recent years and why that may slow down.

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Illustration by Nadya Nickels.

How China dominates critical minerals in three charts  

BY: ANCA GURZU

Nothing lays bare the risk the Trump administration’s trade war poses to the United States and the rest of the Western economy quite like critical minerals.

Rare earth elements, as well as lithium, graphite, silicon, nickel and other minerals, are all crucial to clean energy technologies, such as electric vehicles and wind turbines. Many are also key components in defense technologies, like drones and stealth war planes.

China dominates the refining, and in some cases even the mining, of nearly all these key materials. The three charts below tell that story. 

Source: BloombergNEF, Transition Metals Outlook 2024 • Data goes through 2023. "Rare earths" refers only to four elements that are commonly used to manufacture permanent magnets for EV motors and wind turbines. These are: neodymium, praseodymium, dysprosium and terbium.

In early April, the U.S. government imposed sweeping tariffs of 145% on Chinese goods. While President Donald Trump backed down, at least temporarily, on tariffs he imposed on other countries, he ratcheted up tariffs on China, escalating trade tensions between the world’s two largest economies.

The tariffs do not cover critical minerals and materials, at least for the time being. But China is already using its dominance of the sector to hit back.

Responding to the tariffs, China placed export restrictions on rare earth elements, squeezing supply to the West of minerals and magnets used to make offshore wind turbines, electric vehicle motors, electronics, robots and weapons. The U.S. is almost fully reliant on China for the processing of rare earth metals.

“There are no wind turbines without concession to or coercion from China,” Tommy Joyce, acting assistant secretary of international affairs at the U.S. Energy Department, said at an energy security conference organized by the International Energy Agency in London in late April. One offshore wind turbine requires about four tons of magnets made from rare earths, he said, using the example to criticize the reliability of renewable energy, a position in line with the current U.S. administration’s policies.

The restrictions could cause challenges for the U.S. electric vehicle industry in the future, but currently it's primarily a concern for the defense sector, said Milo McBride, a fellow at the Carnegie Endowment for International Peace focused on climate and geopolitics. European wind manufacturers have not reported any immediate impacts from the Chinese export restrictions, according to industry sources.

“China's mineral processing empire — alongside its unparalleled cleantech manufacturing — exemplifies how deeply entrenched Beijing's lead has become,” McBride said.

Indeed, China’s control over the refining of most critical minerals has created a supply chain concentration that has become a concern for most economies, according to BNEF. 

Source: BNEF Transition Metals Outlook 2024 • "Rare earths" here refers to four elements that are commonly used to manufacture permanent magnets for EV motors and wind turbines: neodymium, praseodymium, dysprosium and terbium. DRC = Democratic Republic of the Congo.

Rare earths are a group of chemically similar elements, like praseodymium, neodymium or terbium, that are crucial to the manufacture of many high-tech products. They are highly energy efficient, offering energy savings of about 20 to 40% over ordinary motors, according to the IEA.

China’s export restrictions cover seven rare earth elements and high-performance magnets that can withstand higher temperatures. If the trade war intensifies, Beijing could expand its restrictions to other rare earths, which could further threaten global production of key goods, the Financial Times reported.

The standoff between the U.S. and China is far from over. A week after the tariffs on other goods from China went into effect, Trump ordered his administration to study possible tariffs on critical minerals like lithium, cobalt and nickel. And a week after that, Trump said the tariffs he imposed on Chinese imports into the U.S. would “come down substantially, but it won’t be zero,” suggesting a softening in his stance.

On April 24, Trump signed an executive order aimed at jumpstarting the deep-sea mining industry in an attempt to boost access to critical minerals and reduce dependence on China. 

Read the full story and see the third chart on Cipher’s website.

Lunchtime Reads and Hot Takes

Carney’s Anti-Trump Agenda for Canada Nods to Climate —
Bloomberg
Anca’s take: Liberal Mark Carney was elected Canada’s new Prime Minister. The former special UN envoy on climate finance will lead the country through the Trump trade war. In a key quote during his victory speech in Ottawa, Carney said it was “time to build Canada into an energy superpower in both clean and conventional energy.”

André Aranha Corrêa do Lago, head of COP30, speaks at BNEF Summit — BNEF Summit
Bill’s take: Corrêa do Lago said China’s massive clean tech manufacturing capacity has dramatically helped developing countries “leapfrog” to renewables. 

Trump’s Deep-Sea Mining Executive Order: The Race for Critical Minerals Enters Uncharted Waters — Center for Strategic and International Studies
Cat’s take: The key point and bottom line of this analysis is the last sentence: "The race to mine the deep sea is on, and conflict in international waters over disputed resources is likely on the horizon."

All Authors Working on Flagship U.S. Climate Report Are Dismissed — The New York Times
Cat’s take: “This is as close as it gets to a termination of the assessment," Jesse Keenan, a professor at Tulane University and co-author of the last report, told the NYT.

China’s Domestic Energy Challenges and Its Growing Influence over International Energy Markets — U.S.-China Economic Security Commission
Bill’s take: China sits at the juncture of nearly every aspect of global energy and this hearing is one of the best one-stop overviews of its role I’ve seen.

Spain will take 'all necessary measures' to prevent another blackout, says PM — BBC
Anca’s take: A huge power cut caused chaos in Spain and Portugal. This level of outage in the countries, which have an interconnected power grid, is unheard of in recent history. There will be lessons drawn once the causes are established.

U.S. Urges Japan and South Korea to Commit to $44 Billion Alaska Gas Project — The New York Times
Bill’s take: This is what locking in natural gas use for periods far longer than might be necessary looks like.

More of what we're reading:

• Equinor weighs suing Trump administration over ‘unlawful’ halt to wind project — Financial Times

• Companies plan shift to green energy, despite Trump-era rollbacks, survey shows — Financial Times (subscription)
• Trump takes a major step toward seabed mining in international waters — The New York Times
  
  

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Here’s how the Trump administration can revitalize U.S. energy support to Africa

Illustration by Nadya Nickels.

BY: KATIE AUTH

Auth is the policy director for Energy for Growth Hub. You can reach her at katie@energyforgrowth.org.

The Trump administration has dismantled Power Africa, a U.S.-led initiative to accelerate investment in African energy that was coordinated by the U.S. Agency for International Development. But that doesn’t mean the program’s mission is dead. In fact, its ambitions and approach might be more relevant than ever. 
 
I worked at Power Africa, including as its acting deputy coordinator, for six years — two years under President Obama and four years under President Trump during his first term. Watching my former agency be destroyed has been incredibly painful. It has also raised serious doubts as to whether the U.S. can still be a credible energy partner for African countries. 
 
But I have hope that the U.S. commitment to African energy will be revived for two reasons:

• Power Africa’s private sector approach resonates with this administration.
• Power Africa’s mandate is strategic.
  
  

Read the full article and share it on Cipher’s website. 

U.S. oil exports have boomed — but could be leveling off

Source: U.S. Energy Information Administration

BY: BILL SPINDLE

There are two things to note about the chart above. One is easy to spot; the other is less so.

What leaps out is the sharp rise in U.S. oil exports after 2015. That’s when the United States Congress lifted prohibitions on exporting oil that had been in place since 1975.

Equally important to note, though, is that exports grew only slightly in 2024. They hit a new record, barely, rising just 1%.

That raises the question of where exports go from here.

Forcefully upward, if Donald Trump has his way. His administration’s “drill baby drill” policy aims to dramatically boost U.S. oil production, which would likely make for even more exports.

But a close look at what has driven the great U.S. export boom over the past decade casts doubt on whether this can be accomplished.

Oil makes up 30% of the global energy supply and is responsible for 33% of global emissions from fuel combustion, according to the International Energy Agency. Globally, transportation is a leading source of the greenhouse gas emissions that cause climate change.

The U.S. boom was driven by two factors: strong global demand and an oil and gas boom fueled by new drilling techniques in the continental U.S.

The U.S., once a huge net importer of oil, is now the world’s largest producer of oil and the third largest exporter behind Saudi Arabia and Russia. The country became a net energy exporter in 2019, an astonishing feat for the world’s largest economy.

But the Trump administration’s tariff blitz threatening global trade and the growing use of electric vehicles, especially in China, means less oil will be needed for driving. So, oil demand may now fall.

Concern about demand has contributed to the price of oil falling below $70 per barrel, a rough threshold between make or break for the U.S. frackers. Below that level, U.S. producers will almost certainly cut back, unable to make a profit.

Meanwhile, Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) are increasing production, adding to global supply — another factor pushing prices lower. Even China is producing more oil.

That means the chart above will likely flatten out going forward, not continue rising. Some experts thought that would happen during Covid, a dip visible in the chart in 2021. But demand recovered.

Still, many analysts expect global oil demand will peak in the coming decade, if not sooner, as electric vehicles become more popular and renewable energy grows. Whether oil prices stay at levels that allow U.S. producers to compete in global markets remains to be seen. 

AND FINALLY...
Water power

Bill Spindle took this photo of a hydroelectric dam on the Grijalva River near the town of Chicoasén in the Mexican state of Chiapas on a recent visit. Hydropower is a form of renewable electricity — although it can be affected by prolonged droughts.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.