On October 6, India’s power ministry released a draft proposal to decrease power plants’ renewable energy generation obligations from 40% to 6-10%. The proposal covers power plants commissioned prior to March 31, 2023, which must meet the 6% target, and between the period of April 1, 2023, and March 31, 2025, which will have a 10% requirement. The draft enables power producers to meet their renewable energy generation requirements by procuring the energy from third parties, instead of installing renewable energy generation on-site themselves. Delhi also granted an extension to coal power plants that use imported coal until next June, due to surging electricity demand and inadequate domestic coal supplies. Power companies owning more than one generating plant can meet the requirements on a fleet average basis.

The International Energy Agency’s 2023 World Energy Outlook notes that while both China and India have been installing record amounts of solar PV along with other clean energy generation, neither is decreasing its economy-wide fossil fuel consumption sufficiently rapidly to meet announced climate pledges. Of the 15.5 gigatons of carbon-dioxide equivalent in global emissions from coal in 2022, China contributed 55%, while India contributed 8% (1.28 gigatons). Moreover, over 100 GW in new coal generation capacity was under construction in China at the end of 2022. The IEA projects that India’s coal demand will rise 10% by 2050.

Why it matters: India’s greenhouse gas emissions reached 2.2 gigatons (GT) in 2020, slightly more than half of U.S. emissions (4.3 GT) and about one-fifth of China’s (10.9 GT). That year, India was the world’s third-largest emitter, ahead of Russia (1.6 GT) and Japan (1.0 GT). (The European Union’s emissions were slightly larger than India’s, at 2.5 GT.) Yet India’s share in global emissions is likely to grow as economic advances boost its per-capita emissions, now just 1.6 metric tons—less than one-eighth of America’s 13 metric tons per person

India’s retreat from its ambitious renewable generation obligations cannot but slow efforts to limit and eventually reverse growth in India’s greenhouse gas emissions. However, developing countries like India are confronting severe challenges in building renewable generation and particularly in integrating variable renewable power into electricity grids. While India has added substantial solar power generating capacity in recent years, increasing its capacity by a factor of eleven in 2017-2021, some estimates suggest that the country is still just halfway to its 2030 target of 40 GW/year in solar capacity additions. Much like the global effort to reduce emissions, India’s road ahead remains a challenging one.

In October, delegations from the United States and Japan concluded their second annual energy security dialogue. Their joint statement emphasized the need to reduce reliance on Russian energy and to limit Russia’s energy revenues and its energy sector development. In addition, they discussed cooperation in areas including clean energy technologies, supply chains, and critical minerals.

Why it matters: The United States banned imports of Russian fossil fuels almost immediately following Russia’s invasion of Ukraine. However, Japan relies upon imports for some 97% of its oil consumption and was the world’s leading importer of liquified natural gas. These realities have constrained Tokyo’s policy toward Russia to a greater extent than the European Union’s decreasing energy dependence on Russia has shaped EU policy. (Though while overall EU reliance on Russian natural gas has declined sharply, the EU’s imports of Russian LNG continue to grow.)

After the Soviet Union’s collapse, several major Japanese firms invested substantially in Russian energy projects. Mitsui and JOGMEC, shareholders in Russia’s Arctic LNG 2 project, expect to receive approximately 3.1 bcm/year in LNG deliveries when production commences, even as the United States has systematically tightened sanctions on Russian firms involved in the project through new sanctions announced in May and September. Tokyo officials have continued to back a Japanese consortium’s continued investment in the Sakhalin-1 oil and gas project due to its extreme importance for Japan’s energy system.

Though Japan’s reliance on Russian oil and gas was relatively low at the time of Russia’s invasion of Ukraine–Japan imported 3.6% of its crude oil and 8.8% of its LNG from Russia–the country’s almost total dependence on imports for oil and natural gas limit the country’s flexibility, as do concerns over possible Russian nationalization of Japanese firms’ massive investments in energy projects. Moreover, following Russia’s near-shutoff of pipeline natural gas exports to Europe, the United States gave higher priority to the EU’s gas needs, something reflected in diplomatic efforts to redirect gas originally committed to Japan and South Korea to Europe and in U.S. LNG exports. Now that Europe’s energy systems appear more stable, albeit still reliant on some Russian LNG, U.S. officials may feel more comfortable in pressuring Japan to reduce its imports from Russia.

China’s Ministry of Commerce announced new export controls on certain types of graphite, including spherical graphite, to take effect December 1. A ministry spokesperson argued the measures would help strengthen nuclear non-proliferation; many nuclear reactors use graphite to moderate and sustain nuclear reactions. Graphite is also a key component in emerging energy technologies, including electric vehicle batteries and hydrogen fuel cells. In August, China enforced similar export controls on gallium and germanium in a tit-for-tat move responding to Western restrictions imposed against the country’s microchip manufacturing industry. The new restrictions follow a European Union decision to investigate subsidies given to Chinese EV producers, something that angered Chinese officials.

Why it matters: Intensifying political, economic, and security competition between the United States and China, and deepening economic competition between the EU and China, appear to be fueling an escalatory spiral of trade and technology limitations. High technology products—including many clean energy technologies—have been at the center of this war for technological, manufacturing, and supply chain dominance.

China is far and away the leading producer of graphite ore, accounting for about 65% of global production in 2022 (850,000 tons); in comparison, the second largest producer, Mozambique, mined just 13% (170,000 tons) of the world’s graphite that year. China also refines 90% of graphite used globally for EV battery anodes. The United States does not produced graphite domestically; after China and Mozambique, the largest producers are Madagascar and Brazil.

The new export controls do not automatically block exports, but instead impose permit requirements, which provide Chinese officials with future discretionary authority to approve or deny export transactions on a selective basis as an instrument of political pressure. From this perspective, the export controls are likely an implicit warning rather than a step toward reducing China’s graphite exports. That said, to the extent that tensions continue to grow between China and the U.S., the EU, Japan, South Korea, or others relying on imported Chinese graphite, Chinese steps to block specific transactions (or to ban exports to individual countries) might not be too far off.

The U.S. imported 72,000 tons of graphite in 2022, with about one-third of the total sourced from China. Looking ahead, however, the U.S. Geological Survey projects that with up to twenty-one lithium-ion battery plants possibly beginning operations in the next few years, spherical graphite demand could grow to 1.2 million tons annually (more than one-third higher than China’s total current annual production). China’s new policy only further increases the urgency of developing alternative supply chains for graphite and other critical minerals.

On October 25, the Australian Ministry for Resources announced $1.3 billion (USD) in additional funding to finance new critical minerals projects, increasing funding for its Critical Minerals Facility, a government financing office, to $3.9 billion. The news followed the inaugural meeting of the Australia-United States Taskforce on Critical Minerals, which seeks to increase investment in strategically significant mining and processing projects.

Canberra’s announcement came four days after Export Finance Australia, a government export credit agency, committed $140 million for the country’s Kathleen Valley Lithium project. The move responded to U.S. firm Albemarle’s withdrawal of its initial $4.3 billion bid to purchase the lithium project’s owner, Liontown, making the project’s future financially uncertain. The Kathleen Valley Lithium Project is slated to commence production in 2024 and eventually to export 500,000 tons of lithium to the United States and South Korea each year. Export Finance Australia also permitted the future participation of its U.S. and Korean counterpart export credit agencies to provide funds for the project.

Why it matters: As Western countries attempt to limit their critical mineral dependencies from China, Australia is perhaps uniquely positioned to provide an attractive alternative thanks to an existing robust mining sector and recent government policies. According to the U.S. Geological Survey, Australia is the world’s leading producer of lithium, holds the largest known reserves of nickel, and is a top three producer of cobalt, manganese, and rare earths, all of which are key inputs into clean energy technologies including electric vehicles and solar panels. Within Australia’s Critical Minerals Strategy, over eighty-one “major” critical minerals projects worth approximately $36 billion were in development by the end of 2022. Australia is also seeking to develop refining and processing industries to complement its mining; the government estimates that downstream development and trade could add $139.7 billion to the country’s GDP, or approximately 8% of its economy in 2022.

Because critical minerals are often a byproduct of other mining activity, projects dedicated specifically to producing critical minerals typically require significant financing commitments before commencing construction, a sizable barrier, especially when mining projects take several years to complete. Even as some countries work to reduce imports from China, Australia faces regional competition from Indonesia, Malaysia, and Vietnam to attract foreign investment and long-term trade partners. Australia-EU negotiations for a critical minerals deal are on hiatus likely at least until EU parliamentary elections conclude in June 2024.