Critical Minerals for Net-Zero Transition: How the G7 can Address Supply Chain Challenges and Socioenvironmental Spillovers


As the world’s most developed economies, the Group of Seven (G7) countries play a crucial role in leading the transition to net-zero, which necessitates the use of critical minerals (CMs) in various clean energy applications. However, the growing demand for CMs raises questions about the socioeconomic, environmental, and supply security implications, given its unequal distribution and the reliance on international supplies.

The challenges include potential supply disruptions and price volatility resulting from overseas dependency on CMs, significant environmental impacts throughout the lifecycle of CMs, the lack of alternatives intensifying the stress on the global minerals market, and insufficient investment in the entire CM value chain.

To tackle these challenges, the G7 should boost domestic production, promote public– private partnerships, foster cooperation for knowledge-sharing among members, and build stronger trade agreements with source countries. These steps can help strengthen the group’s resilience to potential CM supply chain challenges. The G7 also needs to take concerted actions to minimize negative trade-offs that may arise from their actions to address supply chain vulnerabilities and account for the consequences beyond its member countries. Finally, developing a clean energy-critical mineral ecosystem among member countries will help the G7 reinforce circular economy practices and promote investment in research and development.

This policy brief highlights that the G7’s challenges associated with the CM value chain are critical, and hence, innovative solutions are needed. In this regard, partnering with the Group of Twenty (G20) can be beneficial. The G7 and G20 summits may also consider aligning national and multilateral strategies as well as finance and investment policies to promote sustainable practices and ensure CM supply chain resilience.

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