The Geoeconomics of Energy and Materials/ DAVOS 2025

Summary

This panel discussion at Davos focused on the challenges and opportunities of the global energy transition. Participants explored the complex interplay between energy security, climate change mitigation, and economic development. The conversation highlighted how geopolitical tensions, protectionist policies, and regional disparities are impacting the transition to cleaner energy sources.

Experts emphasized that while uncertainties exist, there are also certainties driving the energy transition, such as climate change and the need for energy security. The importance of diversification in energy sources, supply chains, and critical mineral processing was stressed as key to a successful transition. Panelists discussed how different regions face unique challenges, with developing countries particularly struggling to balance energy access with environmental goals.

The role of fossil fuels in the transition was debated, with some arguing for their continued importance in meeting energy demand, especially in developing economies. However, there was agreement on the need to produce and use fossil fuels more sustainably. The critical minerals sector was highlighted as crucial for the transition, but facing challenges in permitting, investment, and geopolitical tensions.

Participants also addressed the impact of protectionist policies on the energy transition, noting potential inefficiencies and higher costs. The discussion concluded by emphasizing the need for pragmatic, country-specific approaches to the energy transition that balance current energy security needs with long-term sustainability goals. Overall, the panel underscored the complexity of the global energy transition and the importance of considering diverse perspectives and regional contexts in policy-making.

Keypoints

Major discussion points:

– The energy transition faces headwinds from energy security concerns, geopolitical tensions, and shifting political priorities

– There is a need for new thinking on how to pursue the energy transition while addressing energy security

– Critical minerals and mining will play a crucial role in the energy transition, but face challenges in scaling up production

– Oil and gas will continue to have a role during the transition period, especially in developing countries

– Protectionism and changing trade patterns could impact the pace and nature of the energy transition

Overall purpose:

The goal of this discussion was to examine the current state of the global energy transition, identify key challenges and opportunities, and explore how to pursue decarbonization while also addressing energy security concerns and development needs.

Tone:

The tone was largely analytical and pragmatic. Panelists acknowledged the urgency of climate action but also emphasized the need to be realistic about energy needs and security considerations. There was a sense of cautious optimism that solutions could be found to balance competing priorities, but also recognition of the significant challenges involved. The tone remained consistent throughout as experts shared their perspectives on various aspects of the energy transition.

Speakers

– Meghan O’Sullivan: Professor at Harvard and director of the Belfer Center for Science and International Affairs at Harvard University

– Fatih Birol: Executive Director of the International Energy Agency

РMaria da Gra̤a Carvalho: Portuguese Minister for Energy, Environment and Energy

– Jonathan Price: CEO of Teck Resources, a Canadian mining company

– Kgosientso Ramokgopa: South African Minister for Electricity and Energy

– Muhammad Taufik: President and CEO of Petronas from Malaysia

Additional speakers:

– John Chipman: Executive Chairman of the IISS in London and Senior Advisor to Centricus

– Suman Mishra: Managing Director of Mahindra Last Mile Mobility, EV manufacturer

– Tatsuya Terazawa: Affiliation not specified, from Japan

The Davos panel discussion on the global energy transition brought together experts from various sectors to explore the complex interplay between energy security, climate change mitigation, and economic development. The conversation highlighted how geopolitical tensions, regional disparities, and competing priorities are shaping the transition to cleaner energy sources.

Context and Key Challenges

Meghan O’Sullivan, a Harvard professor, emphasized that energy security has become a priority alongside reducing emissions, with geopolitical tensions significantly impacting the energy transition. Fatih Birol, Executive Director of the International Energy Agency, stressed the importance of diversification for both energy security and successful transition. He urged the audience not to lose perspective amidst uncertainties, highlighting certainties driving the energy transition such as climate change and the need for energy security.

Regional Approaches and Priorities

The discussion underscored that energy transition means different things for different parts of the world. Maria da Graça Carvalho, Portuguese Minister for Energy, Environment and Energy, shared that Portugal is investing heavily in renewables, aiming to achieve 93% renewables in electricity production by 2030. She also mentioned Portugal’s cooperation with African countries on renewable energy projects.

Kgosientso Ramokgopa, South African Minister for Electricity and Energy, emphasized that Africa needs to address energy access alongside transition, highlighting the continent’s vast renewable energy potential that requires investment to exploit. He stressed the importance of political stability in African countries to attract investment in the energy sector.

Muhammad Taufik, President and CEO of Petronas, noted that Asia faces challenges in balancing energy security and transition, stating, “I think what has happened within the last decade is a collision between idealism and economic realities.” This comment captured a core tension in the energy transition debate, prompting a more nuanced discussion of practical challenges, particularly in developing economies.

Sector-Specific Challenges

Critical Minerals and Mining:

Jonathan Price, CEO of Teck Resources, highlighted the crucial role of mining in meeting mineral demand for clean technologies. He noted significant challenges in scaling up production, including aging mines, grade decline, and the need for predictable permitting processes. Price emphasized the need for government industrial strategies to support mining investment.

Birol added that critical mineral supply chains are crucial for both security and transition, but raised concerns about the concentration of processing in a single country. He stressed the importance of diversification in both the source of minerals and their processing to reduce vulnerabilities.

Role of Fossil Fuels:

The role of oil and gas in the transition was debated, with Taufik arguing for their continued importance in meeting energy demand, especially in developing economies. He emphasized the need for differentiated approaches in producing oil and gas, acknowledging the tension between idealism and economic realities. There was agreement on the need to produce and use fossil fuels more sustainably, with a focus on reducing methane emissions and implementing carbon capture technologies.

Policy and Investment Needs

Speakers emphasized the need for pragmatic, country-specific approaches to the energy transition that balance current energy security needs with long-term sustainability goals. Ramokgopa highlighted the opportunity to use South Africa’s G20 presidency to elevate African energy needs and transition priorities on the global stage.

Carvalho stressed the importance of international cooperation to support renewables in developing countries, while Birol suggested that energy security and transition can be pursued simultaneously. The discussion also touched on innovative approaches such as using debt conversion programs to fund renewable energy projects in developing countries.

Unresolved Issues and Future Considerations

The panel identified several unresolved issues, including how to balance protectionist policies with the need for efficient global energy markets, addressing the concentration of critical mineral processing, reconciling short-term energy security needs with long-term transition goals, and determining the appropriate governance framework for guiding energy transition globally.

Birol provided a thought-provoking comment on the disparity in renewable energy deployment, particularly in Africa: “Today’s solar is the cheapest source of electricity generation almost everywhere, especially in Africa where we have 40% of the solar radiation in the world comes to Africa, 60% everybody else put together. Yet, in Africa, as Mr. Minister mentioned, as IEA has been looking since 20 years, one out of two persons don’t have access to electricity, and yet amount of solar power we generate in the entire sub-Saharan Africa is less than we have in Netherlands.” This statement highlighted the stark contrast between potential and reality in renewable energy adoption in developing regions.

The Q&A session briefly touched on the role of AI and data centers as significant energy consumers, adding another layer of complexity to the energy transition discussion. A Japanese participant raised concerns about potential negative impacts of energy transition on prosperity and competitiveness, highlighting the need to consider economic implications in transition strategies.

Conclusion

The discussion underscored the complexity of the global energy transition and the importance of considering diverse perspectives and regional contexts in policy-making. While challenges remain, there was cautious optimism that solutions could be found to balance competing priorities. The panel emphasized the need for continued dialogue, international cooperation, and innovative approaches to navigate the complexities of the energy transition while addressing energy security concerns and development needs. The key takeaway was the necessity for nuanced, region-specific strategies that acknowledge both the urgency of climate action and the realities of economic development and energy security.

Meghan O’Sullivan: I know, I’m aware of that, so. Good morning, I’m Megan O’Sullivan. I’m a professor at Harvard and the director of the Belfer Center for Science and International Affairs at Harvard University. It’s a real pleasure to welcome you here, and to welcome you to what I understand is the first conversation, maybe not the first conversation, but the first gathering about energy and climate at Davos this week. So it’s our real pleasure to join you to launch what will be an engaging week of conversations on this topic. And we have a fabulous panel, which I’ll introduce in just a moment. So the energy transition is by, I would say, almost any metric, one of the most or the most ambitious, intentional action that humanity has ever undertaken. And many of us in this room are acutely, in some cases, personally aware of the incredible advances that we’ve seen over the last decades, and over the last decade in particular. Whether it has to do with technologies or the trillions, now almost $2 trillion in 2024, invested in clean energy technologies. But all of this has not amounted to anything that we could really qualify as success at this point. We’re finding that the energy transition, despite the imperative that many attach to it, is meeting some very formidable headwinds. And we’ll discuss them, but I put them sort of in three baskets. First is just the resurgence of energy security as a priority. for policy makers and for citizens. It shouldn’t be a surprise that when people are faced with two imperatives of reducing a carbon footprint and securing affordable, plentiful energy, that the latter would win out. But this is in fact is what has happened around the world. The second headwind of the energy transition is just geopolitics. You think of a world which wasn’t so long ago where the U.S. and China had a cooperative relationship and the global dynamic was largely one of a cooperative dynamic. We’re in a very different geopolitical world today where the U.S.-China competition is fierce and is a defining dynamic in the landscape. This of course has had many implications for the energy transition and for energy security. And then lastly, I would point out, and it is highlighted by the incoming president of the United States, President Trump inaugurated yesterday, the shift in politics, not just in America, but in other places where the priority has seemed quite definitively to shift away from the energy transition and towards the development of fossil fuels. So where does this leave these kinds of conversations? Some people would say perhaps despair is an appropriate emotion, but I would say there’s rather an opportunity here. There’s really a need for new thinking, for conceiving the energy transition in a way that’s different. What we have been doing thus far has obviously not met the moment. The energy transition as it has been pursued has not brought in the global south and won it over entirely to it. It has not reduced emissions and it has not tackled demand for fossil fuel. So we need to think of the energy transition in a different kind of way, in a way that recognizes an energy transition that does not take into account energy security is not going to be a successful transition. And so, how do we develop this new thinking? It starts with conversations, and I hope these are conversations that are going to be qualitatively different than the ones we’ve had in the past, that really begin with kind of a, as I say to my students at Harvard, analysis, not advocacy. Really looking at the facts, looking at the economics, and looking at the politics for what they are. And I think there’s no better place than to launch some of these conversations than here at Davos at the World Economic Forum. And we have a fantastic panel in which to do it. Just moving from right to left, I’d like to first briefly introduce Jonathan Price, who’s the CEO of Tech Resources, a Canadian mining company. And next to him is Minister Maria de Calvo, and she is the Portuguese Minister for Energy, Environment and Energy. And sitting next to Maria is Mr. Mohamed Taufiq, and he is the President and CEO of Petronas from Malaysia. And then next to him is Kosi Ramagopal, who is the South African Minister for Electricity and Energy. And then sitting immediately to my left is Dr. Fatih Barol, the Executive Director of the International Energy Agency. So again, looking forward to a fantastic conversation with this group. Fatih, I’d like to begin with you, if I may, and just see if you would like to comment a little bit on what I opened up with. Just this sense that the energy transition, the imperative of reining in carbon emissions or getting to a net zero economy, global economy, is still as urgent as ever, yet some of this urgency feels as if it’s been dissipated by other priorities. And I didn’t even mention AI and the drive for electricity and power to fuel the AI. the AI innovations, which are seen as critical to national security by many. Could you give us a sense of, do you feel like other priorities are impeding the energy transition, and how might these geopolitical and geoeconomic developments have an impact, and what might we do about it?

Fatih Birol: Many thanks, Megan, and also framing it in a perfect way, the discussion, and you mentioned a lot of, rightly so, the uncertainties, political, economic uncertainties, and if I am not wrong, I think it’s overall title of this very Davos is about the uncertainties. Yes, there are many uncertainties, this is right, but I think we shouldn’t lose ourselves and lose our perspective by looking at all these uncertainties, and I want to highlight a couple of certainties. Number one, energy security. The energy security challenges of today, the oil and gas energy security, and then energy security challenges of tomorrow, critical mineral supply chains and the others. This is a certainty, and it will stay with us. Climate change, it is real, it is happening, and it will be worsened if we don’t change our policies. This is a certainty. Today, this year, ladies and gentlemen, more than half a million women and children die prematurely in Africa because they don’t have access to clean cooking, this is a certainty. And there are some other certainties when we look at the markets. The cost of batteries last year decreased by 20%, so are some of the other clean energy technologies. Nuclear power, as IEA has predicted three years ago, is making a comeback, a strong comeback. And when we look at the investments, investment for electricity sector is overtaking the investment of oil plus gas plus coal put together. So therefore, what I’m saying is uncertainties are right, they are happening around the world, political, economic, and in the energy sector, but we shouldn’t lose the sight that there are some certainties. As far as the energy security challenges, maybe two remarks, I don’t want to steal the time of my colleagues, but two remarks. One, both for today’s and tomorrow’s energy security, for me there is one magic word, diversification. Diversification of the energy technologies, the importing, exporting country, and the goods. Over-dependencies can quickly turn into serious vulnerabilities. In Europe, we have witnessed this two years ago. Diversification is very important. And finally, for me, a successful clean energy transition is the one which makes the energy systems much more secure and resilient, makes the energy prices affordable, and at the same time, reduces the reliance on other countries which have the reputation of being not a reliable partner. So energy transition, in my view, is not only reducing or aimed to reduce the emissions, but at the same time, provides prosperity to its people and also makes the energy much more secure. This is the definition of the right energy transition for me, and as such, a real energy transition program, in my view, is not a Rival of energy security. They can be all be together. They should be all together if they are done Properly. Right. Thank you Fatih. Maria. I might turn to you with the same question just building on what Fatih said about

Meghan O’Sullivan: Diversification being the key to a successful energy transition and resilience Of course Europe comes to mind with all the challenges that it has seen since the the Russian invasion of Ukraine Could you give us a sense of how you are seeing the imperative of the energy transition in a European context given the other challenges

Maria da Graça Carvalho: Thank you very much. Good morning to all of you and thank you for the invitation to be here It’s a pleasure to be here talking about the energy transition Policy that is so important into my country Portugal And we had problems in the past when the society was mainly dependent on fossil fuels And we have done a decision several years ago to to invest on the energy transition so for secret of supply for Combating climate change and also air quality. That’s a very important factor and Certain very important for competitiveness. The energy transition is the greatest economic Factor to attract investment to Portugal. We have access to affordable renewable electricity and Renewable hydrogen That will attract the investment to to our country last year in 2024 we achieved 71% of renewables in the in the electricity production 20 about 2080 I wrote 27 wind 10 solar, 6 biomass. And we have a plan, we have our national energy and climate plan that was support by, we have in our parliament, 20, 30 members of the parliament, only four didn’t support this plan. So we have an overall majority supporting our transition and that is very, very important. So we will have this ambition to become 93 in 23rd, 93% of renewables in electricity production and 51% in the global energy. So we have to do a transition on transport and buildings and transport is our biggest challenge. We are also putting a lot of emphasis on and investing on grids and on storage and attracting investment on the production of hydrogen. And as I said, we do this as a competitiveness factor to attract investment to our country. Very important is also our internal market with Spain. So we are in certain ways still an island, it has been difficult to build the interconnections to France, so we have to get stronger together to have an Iberian internal market and to build that with a lot of renewables, with a lot of storage. We have now developing a common or a parallel strategy for storage in order to become more and more independent. We are quite independent on Russian gas. We had in 21 around 15% of importing, last year we are down to 5%, we have the figures from January to November and we only import 5% and we hope to decrease even more. So we import mainly. from Nigeria, United States, and that is our measure, and I think that is the line to take, to be more independent, to invest in renewables, in order to do this transition in a more swift way and sustainable way.

Meghan O’Sullivan: Right, thank you very much, Maria. Jonathan, I’d like to turn and talk a little bit about the mining industry, and of course the mining industry is one of the industries whose fortunes have changed dramatically with the energy transition. A successful transition will require meeting the greatly increased demand, as the IEA has pointed out, in all kinds of minerals and other materials, be it steel, be it lithium, be it copper, rare earths, whatever the case may be. This would seem to translate into a boom for companies and countries that have interests in mining, but this has not always been a linear progression, that it has been sometimes a difficult one to navigate. Jonathan, if I could ask you, why is this the case? Why is there not such an obvious translation from the need for these minerals and materials and the benefits that go to companies and countries that are involved in these industries? And what might change to make this more transparent, reliable, and straightforward? Yes, you’re right in that this is a great time to be in the mining industry

Jonathan Price: because the demand signal is a huge one, coming from the energy transition broadly, and critical minerals sit upstream of every sort of megatrend we’re seeing now, whether that’s related to energy transition, whether that’s electrification, whether that’s AI and compute. Critical minerals are gonna be required to enable that. And just focusing particularly on copper because copper is one of the largest, more mature markets in the critical minerals area. We see over the next 10 years an increase in demand of about 25%, and by 2040, an increase in demand of about 40%. And those numbers might not sound very large. However, there are some real constraints on the supply side here that go to your question as perhaps to why we’re not meeting that increased demand right now. Firstly, the existing mines we have are ageing. These mines, copper mines in particular, they suffer from grade decline throughout their life. It’s just nature doing its work essentially, but what that means is in the absence of investment we produce less year over year. Secondly, as we look at new mines, these mines are deeper, they’re lower grades. They’re also in more difficult geographies, not just in terms of country risk, but we’re looking at future mines above 5,000 metres in Argentina, for example. That’s an incredibly difficult environment in which to construct an operation and run an operation. And then there are additional costs associated with building these mines that we haven’t experienced previously, and these rightly come from societal expectations, but it’s also things like access to water. We’re increasingly having to build desalination plants to support our mining operations. We need to use renewable energy, because of course if we’re building mines to support the energy transition, we need to make sure that they are green as well. So the cost of building and operating these mines is higher than it’s been in the past. But one of the biggest rate limiting steps here is just the time it takes to secure permits for mines now. That’s more complex than it’s ever been. It’s complex in part because of the societal expectations. I’m not suggesting for a moment that we should short circuit the process in terms of doing the work around environmental baselining and ensuring we are meeting the needs of communities and indigenous nations. That is critically important for all of future mine development. But what we do need is predictable permitting processes that we can rely upon to move these mines or proposed mines efficiently through the process so we get them to a phase of production. So that needs government support in terms of the regulatory frameworks around mining and policies. Governments I think need more deliberate industrial strategies to indicate how they’re going to support mining and investment in mining in their countries. And of course we need capital to develop these mines. And the flow of capital into mines that will have higher capital costs in the future and higher operating costs in the future will require higher commodity prices. And unfortunately commodity markets work on the price of today’s supply and demand balance rather than the price of tomorrow’s supply and demand balance which is what we’re trying to deliver into. So we need to rethink to a certain extent pricing mechanisms here that will support the investment that we need for this development.

Meghan O’Sullivan: Great, thank you. Kosi, if I could turn and ask a similar question to you, Jonathan made reference to the importance of countries having industrial strategies, having regulatory frameworks, countries that have great potential to further develop their mining resources. Would you be able to say anything about South Africa in particular, and then, of course, the G20 and how the G20 might be looking at some of these issues related to the energy transition?

Kgosientso Ramokgopa: Thank you very much, and good morning to the delegates. Maybe just to how you frame the conversation to make the following points as I link it to the question. The first one is that the question of the energy trilemma has got regional or geographic manifestations. I mean, if you come to the continent, we have about 600 million people who don’t have access to electricity, and therefore, the conversation about the transition essentially is a misnomer. It’s a non-existence because they don’t have access to electricity, but we also see opportunities. So what are those opportunities that the kind of investment and maturity of technology has made it possible for us to connect the poor, those who are located in far-flung areas, the rural hinterland, we are able to connect them quicker and cheaper because you don’t necessarily need the kind of backbone infrastructure for you to connect these communities. But also we know that Africa is home to about 30 percent of known mineral resources, so the ability for us to be able to exploit these same minerals in the context of supporting the transition I think is going to be key because we are likely going to broaden the flow of industrial production, and in that way, we are able to power the economies of those countries, get people out of poverty. and show that they’ve got the skills to participate in the new economy. So the question is, how do you exploit those resources? So I think the point made earlier on is first you need the capital because this is a capital-intensive industry and we know that the balance sheet of these countries is not sufficient for them to self-finance. So you need to create a dispensation where you are able to tap into the deep liquidity that is sitting with the private sector for those investments to happen. And those investments must happen close to source because what we have been doing over time, we have been exporting opportunities, so essentially employment opportunities. So the relationship is that of extraction. So you take these mineral resources, beneficiation, value addition takes place in a far-flung area. So I think there has to be that conversation, especially with the major industrial powers, to ensure that you support the growth of these countries, invest in them and ensure that the beneficiation happens closer to the source. But for that to happen, there has to be political stability. And in many of these jurisdictions, unfortunately, we have seen unstable political environments that makes it difficult for investors to come into those spaces and make the necessary investments. And that’s why we are having this conversation on the continent. They need to ensure that we are able to entrench deep in democracy. And we have seen that there has been a number of elections that have taken place on the continent. And these, by many accounts, were declared to be free and fair, with the exception of Mozambique where there was a bit of tension. But I think we are beginning to resolve that question. With South Africa assuming the presidency of the G20, the first sovereign African nation to assume that position, I think we are going to elevate, if you like, the opportunities on the continent and the need for the continent to coalesce around a set of objectives. that makes it possible for us to articulate in the most coherent and comprehensive fashion what constitute the aspirations and the needs of the continent. So we see the G20 presidency not just as a South African presidency, but as a presidency of the continent. And that’s why we’re having our own conversation, at least on the technical side of the Energy Working Group, conversing the opinions of my peers on how best to position and articulate our views when we enter into those conversations. And yes, I think the G20 is a pristine platform for Africa to showcase what the potential that it has, but for that to happen, we need to organize ourselves better and have a much more coherent articulation of what constitutes that transition. But I’m confident that with our presidency, we’ll be able to surface exactly what that means and ensuring that the issues of access are elevated in addition to the issue of security and the issues of sustainability.

Meghan O’Sullivan: And that’s the trilemma I was referring to earlier on. Great. Thank you. Mohamed, if I could ask you about the role of oil and gas. So we talked about the shifting attitudes of the energy transition, and certainly that has accompanied shifting attitudes towards the role of oil and gas in the energy transition. All of us in the room who have watched or participated in the Conference of the Parties, we saw at the COP28 a real grappling with the role of oil and gas in the energy transition. But then we saw the absence of addressing this explicitly in COP29. Could you give us a sense of how you see the shifting role of oil and gas in the energy transition and what you perceive as the drivers of those impressions and realities?

Muhammad Taufik: Well, thanks, Megan. I thought I was going to be given the easiest question. I don’t want to come off sounding like I’m an apologist. for the fossil fuel industry. I’m sitting on the same panel with Fateh, for God’s sake. We’ve had many exchanges here. I think what has happened within the last decade is a collision between idealism and economic realities. And I think that cuts the heart of the dilemma that Excellency Minister from South Africa referred to. I think Maria mentioned also the push for getting energy security front and center. This has been a recurring subject matter. And the reality is, notwithstanding what has happened post-pandemic, Fateh will confirm his research, as well as research of many other multilateral institutions, show that energy demand is on uptick, particularly in Asia, where I am from. We’ve seen this grow from the beginning of this century at two to 3% at a steady pace. The reality is that governments have to shape policies and support industry. They have to make sure that families are fed, hospitals work, transport continues. But post-pandemic, when there was indeed an uptick in this, and of course, we were hit by what internally in Petronas, we call a state of poly-crisis, crises of policy changes, shifts in funding standards, shifts in permitting, shifts in geopolitics, most evident after the incursion in October 7th in the Middle East. And of course, the Ukraine invasion, all of these have commingled to make very difficult signals to read. But the realities are that governments, particularly those in Asia, where there’s 350 million people still without regular access to electricity, whereas, Fateh has rightly pointed out, places where people are still struggling to have cooking fuel. The response is that we need to get something to the people, to the masses, to ensure they can continue economic activity, they can actually generate industry. Healthcare systems are supported. The reality is that this comes with accepting oil and gas. But as an industry, have we accepted that we can continue producing oil and gas the same way? I think the answer is a very strong no. We acknowledge that we have a duty to correct the issues such as methane, which are far more potent GHG gas. And reality is that in Asia, where ASEAN in particular, where we’re the home to 700 million people, we’re spread across 25,000 islands, 130,000 kilometers of coastline. Pretty much, we’re having people face up and bear the brunt of being climate refugees year in, year out. These are realities that hit us here. But why we’re gathered here in Davos, I think that the subtitle is Committed to Improving the State of the World, is we wanna exchange these approaches. And at the end of the day, I think governments accord the space for fossil fuels and oil and gas in particular. The reality of 85% of the energy mix still being very much fueled by fossil fuels in Asia, it’s difficult to shift overnight. And just latching on finally, just to close out, Jonathan’s remarks about the realities around permitting and lag time and the capital hurdle you must overcome. The system B that we idealistically want to have in place isn’t there yet. And we just have to make sure what can be offered by system A is done in a very differentiated manner. We just have to accompany it with CCS, we have to deal with methane, we have to completely avoid flaring and venting. And more so, companies like myself, a national company, are charged to become more like energy superstores. Because as we deal with the energy needs of our constituents and markets and partners, they’re asking us for combinations. You can’t give us only a fossil fuel solution. Could you accompany it with lower carbon ammonia? Could you accompany it with a renewables solution? So these things are working out and evolving over time. There is a space, indeed, and I would argue with Fateh that there is still a space still for oil and gas for at least a while yet, but we’re not going to do it in the same way.

Meghan O’Sullivan: Great. I agree with you there. No problems. Can I just say something? Sure. So, just three small points to react to the colleagues.

Fatih Birol: First about energy transition means different things for different parts of the world. I’ll give you one example. We have the Dutch minister here, so I saw the Dutch climate. So I tell you today, just for me, one of the most tragic statistics, I make my hands dirty with data every day, but one of the most tragic statistics I’m going to tell you. Today’s solar is the cheapest source of electricity generation almost everywhere, especially in Africa where we have 40% of the solar radiation in the world comes to Africa, 60% everybody else put together. Yet, in Africa, as Mr. Minister mentioned, as IEA has been looking since 20 years, one out of two persons don’t have access to electricity, and yet amount of solar power we generate in the entire sub-Saharan Africa is less than we have in Netherlands. Think about the map. How big is the sub-Saharan Africa is, and the Netherlands is a great country, but a small one compared to sub-Saharan Africa, Mr. Minister, I’m sure you agree. So this is the, when you look at the comparison, this is really very unfair when you look at from the more humanitarian perspective. This is number one. Number two, I think the question of should we choose energy security or energy transition, we should think twice. Do we really have to choose one of them? I don’t think so. This reminds me when I was a child. seven, eight years ago, it was many years ago, I was invited with a question getting from the neighbors and the aunts and the uncles, do you love your father or mother more? Very tough question, what are you going to say? Depends on who is in the room at that time. So why do I have to choose one of them? I love both of them. So I want to address both energy security and address the environmental problems, and this can happen. And there’s a role for oil and gas there in the transition period, this is number two. Number three, on the critical minerals, especially copper. So copper is, I think the importance of copper is not well understood, energy transition or not, because we are seeing electricity demand is growing very strongly, six times higher than the energy demand, electricity demand. It means copper. Yet, when we look at the investments and the demand, we see a big deficit and a copper mine, A to Z, you need 17 years in order to develop bring the copper to the market, big problem. And finally, Megan, I want to say that in terms of critical minerals, in terms of the diversification, we shouldn’t only look at where the mining is, but where the processing and refining is.

Meghan O’Sullivan: 80% of the critical minerals today in process in one single country. So therefore, diversification for the source of minerals, but diversification of the processing as well, as you, with Jason, wrote about this. Yeah, it’s a very, very important point. I’m just going to very quickly ask one last question of the panel, then open up for a few questions before we close out. And I’ll direct this to anyone who would like to respond to it, but it has to do with the shifting winds in trade. And that certainly we know that the energy transition would involve a lot of change in the patterns of trade, the composition of trade as it relates to energy. The IEA has mapped this out very, very clearly. But we also have seen big changes in the last few years and a shift towards protectionism, globally speaking, with President Trump coming into office, he’s made it very clear that tariffs, he has said tariff is one of the most beautiful words in the English language. And so this is going to be a real policy tool for the Trump administration. So what is this shift towards protectionism, meaning for the energy transition? I’d like to see if there’s anyone who would like to comment on that. I see, Jonathan, you’re nodding your head if you want to start. Sure. Look, I mean, I think we’ve operated for decades in global commodity markets, and they’ve been

Jonathan Price: transparent and they’ve been efficient, and it’s a good way to match supply and demand. And to Fatih’s point, it’s a good way of matching mine capacity with processing capacity. But we found ourselves in a position where, again, in the case of copper, 50 percent of that is processed in China, and governments in the West have begun to feel very uncomfortable about that fact. And as governments are pursuing economic security, energy security, national security, what they realize they need now is resource security to back that up, hence this drive to regionalization. Your point on tariffs, I mean, that’s a concerning one, because what tariffs will do is drive inefficiencies into the system. They will drive higher costs. They will drive inflation. And ultimately, they will drive lower growth. And our concern is that the inflationary impact, in particular, will slow down the pace of the energy transition. On the other hand, you know, there are some regional opportunities here where, you know, neighboring countries, and, you know, I speak from a Canadian perspective with the world’s largest market on our southern border, there’s an enormous opportunity there to match the resource capability that Canada has with the market opportunity we see in the U.S. But that needs to be done on the basis of the free flow of trade, the free flow of minerals, and the free flow of capital across that border to support that. So in every one of these instances, there are risks, but I do think there are opportunities that are emerging where we can work in collaboration locally, but we shouldn’t close ourselves off to global markets, because they do drive efficiency in investment, and they drive efficiency that will allow us to pursue the energy transition more quickly.

Meghan O’Sullivan: Thank you. Just to make one point. Sure. I’m just going to ask people to be very brief, because I do want to take a few questions from the floor.

Kgosientso Ramokgopa: I just want to make the point that this protectionism takes different manifestations. I mean, if you go to… The European Union, the introduction of CBEM, I think presents a potential challenge to some of our industries, and therefore they are going to lose out their access to those markets and result in the decimation of those industries in our countries. I’m saying that the conversation needs to be a bit more nuanced. I mean, the juxtaposition of renewable energy resources, the Netherlands versus the continent, I think there’s an additional dimension there, is the ability to invest in the opportunity to exploit those renewables. These countries don’t have the necessary balance sheet to support that kind of investment, and we rely on private sector to come and make the necessary investments. But we also have an obligation as sovereign jurisdiction to create conditions for that day investment to land there.

Meghan O’Sullivan: Great. Thank you. Maria, you want to comment on this point about protectionism? I want to comment on the previous, on the renewables on Africa.

Kgosientso Ramokgopa: Can I comment on that? Sure, yes. Very shortly. I’ll just ask you to be very quick, and then if anyone, could you just signal to me if you have a question, I’ll take a few. I would like to say that one of our policies has been the cooperation with the African countries and the Portuguese speaking, and we have a very good project going on, on conversion of debt that we have established to Cape Verde, and now we are going to establish also to St. May Prince, where we convert debt in projects on, in the case of Cape Verde, on solar energy. It’s already done for two years, and we are going to continue with projects with solar photovoltaic with water. And so it’s a very good model that can be… a reply to other cooperations between countries. So it’s a very good example that we can head each other for a more swift transition.

Meghan O’Sullivan: Great, thank you. I think I’ll take three questions all at once. I’ll go here, here, and then there.

John Chipman: Hello, I’m John Chipman, Executive Chairman of the IISS in London and also Senior Advisor to Centricus. To the head of Petronas, a few weeks ago in the Leaders’ Summit between Prime Minister Wong of Singapore and Prime Minister Ibrahim of Malaysia, a long-held dream of the King of Johor was implemented with the creation of this Johor-Singapore Economic Zone, and there were incentives given to companies to invest there in AI, and as Megan said, AI is one of the greatest consumers of energy. Do you anticipate that that large economic zone will be a center for renewable energy activity, and would Petronas engage in that in order to realize your dream of eventually becoming an energy superstore?

Muhammad Taufik: Well, certainly, I think central to any national oil company’s duty is to ensure energy security, and we’re almost duty-bound to ensure that economic activity can proliferate. Now, the creation of the economic zone, I believe my Prime Minister is here. The question can be leveled to him directly. He wants to make sure, as the Chair of ASEAN this year, that any economic development is done sustainably and inclusively. So not only is it aimed to actually ensure that the locality flourishes, but we need to do what we can do within a reasonable timeframe to shift the energy that powers this from one that is gray to one that’s far greener. The transition is going to compel companies like ourselves to start thinking about our solutions and offerings, and of course, we’re partnering with national utilities and private investors to make sure that this growth of data centers, which I know is proliferating at a, I would say an exponential rate. This in itself is both a reason for debate, risk and reward of carrying out this much data center growth in Asia. I think all our demand curves are now wrong. I think we’ve seen this in the US. I think we’ve seen this in anywhere out there. We’ve taken on data center investments. The AI unto itself is a consumer, and we hope that the virtual cycle will air. It will then help energy management. It may come later, but there is going to be that hump that we have to deal with, and we have to do so sustainably. And of course, Petronas will be part of that equation.

Meghan O’Sullivan: Thank you.

Suman Mishra: I’m Suman Mishra, Managing Director of Mahindra Last Mile Mobility, EV manufacturer. Question to you. Given this panel, it was very clear that there are really practical constraints on whether it is energy access, energy security, capital access, et cetera, and the answer is going to be very different depending on which part of the geography you are sitting at. So my question is, acknowledging these practical challenges, what is the governing framework or policy approach or mechanism which will then ensure energy transition, which will hopefully be expeditious and potentially just? So. Great, thank you.

Meghan O’Sullivan: I’ll take the one more question, and then we’ll wrap up in the panel.

Tatsuya Terazawa: Tatsuya Teruza from Japan. I have a question to Dr. Biro. You mentioned that energy transition is not a rival to economic security, and you also mentioned that economic transition will lead to prosperity, but the reality may be slightly different. If we go ahead with energy transition, more solar PVs, more batteries, more EVs, and China will be more dominant. In terms of prosperity, with my due respect to my German friends, Germany has been the leader in energy transition, but the result is higher energy costs, hollowing out of the industry, and loss of competitiveness. You said if you do it right, you can satisfy everything, but can you be more elaborate and specific in what is the appropriate manner to ensure that economic transition will be consistent with energy security and lead to prosperity? Thank you. So, Fatih, I’ll let you take that. I can take…

Fatih Birol: Actually, if you take them both, the governance frameworks, yeah. And if you could do it in one minute, that would be even better. Okay, 30 seconds each. So, I don’t think that there will be one governing body around the world which will take the decisions and define the roadmap for the entire world. Every country will be different. They have different advantages and disadvantages when it comes to economy, resource endowment, policies, priorities. Every country is different. But countries who do not see the real trends in terms of technology, in terms of innovation, and tomorrow’s industry, they may be losing time and they may not be positioning their economies good for the next chapter of the economy. So, therefore, we should make sure that if we look at the realities of today, what are the realities of today, but at the same time what is coming on and prepare the economy for that. My Japanese colleague, for example, one concrete example I can give it to you. Nuclear power in Japan or nuclear power in Germany. I think in Germany, German government or German people, I respect their decision, to phasing out of nuclear power was a historical mistake. If they didn’t do so, because the German nuclear power plants were working like a Swiss clock without any problem. And after the 2011 Fukushima accident, we saw this coming also in Japan. They were wrong policy decisions and they shouldn’t be considered as going through a transition. In my view, in Germany, shutting down the nuclear power plants did not help to a healthy and well-designed energy transition policy in Germany and therefore led, among others, higher electricity prices. Just to give you one example, we shouldn’t be dogmatic, we should be pragmatic, we should deal with today’s energy security challenges, such as oil and gas, but also tomorrow, as I mentioned before, concentration of… Now, the processing of critical minerals in one country is a big challenge but we should find ways in order to diversify it and having processing facilities around the world is not difficult. So this shouldn’t be a reason not to go for transition that today the processing is one country concentrated. Just the opposite, we should go for transition but at the same time take the steps in order to first recycle and the second for the processing we should try to do it and it is happening now in many countries around the world to diversifying as I said for me the magic word for energy security is diversification. With that, unfortunately we are out of time. Thank you so much for the many questions that I know still remain unanswered.

Meghan O’Sullivan: I think one thing that is clear coming out of this panel is that there are still many opportunities related to the energy transition to be considered. And then as we grapple with this relationship between energy security and the energy transition, we know there are many different potential paths to a net zero global economy. And we need to focus more clearly on the ones that are more compatible with energy security for all rather than other paths which might seem easier or faster or more expedient in the short term but may not be commensurate with energy security. With that, I’d like to thank everybody in the room, particularly I’d like to thank our panelists for a fantastic job. Have a wonderful day. Thank you. Excellent. Well done. Thank you so much.

Agreement Points

Energy transition challenges vary by region

speakers

– Fatih Birol
– Kgosientso Ramokgopa
– Muhammad Taufik

arguments

Energy transition means different things for different parts of the world

Africa needs to address energy access alongside transition

Asia faces challenges in balancing energy security and transition

summary

The speakers agree that energy transition challenges and priorities differ significantly across regions, particularly between developed and developing countries.

Need for investment in clean energy and critical minerals

speakers

– Jonathan Price
– Kgosientso Ramokgopa
– Fatih Birol

arguments

Mining faces challenges in meeting mineral demand for clean technologies

Africa needs investment to exploit its renewable energy potential

Critical mineral supply chains are crucial for both security and transition

summary

The speakers emphasize the importance of investment in both renewable energy technologies and the mining of critical minerals to support the energy transition.

Similar Viewpoints

Both speakers argue that energy security and transition are not mutually exclusive, and that fossil fuels can still play a role if produced more sustainably.

speakers

– Fatih Birol
– Muhammad Taufik

arguments

Energy security and transition can be pursued simultaneously

Oil and gas still play a role but must be produced more sustainably

Both speakers emphasize the importance of international cooperation and platforms to support renewable energy development in developing countries.

speakers

РMaria da Gra̤a Carvalho
– Kgosientso Ramokgopa

arguments

International cooperation needed to support renewables in developing countries

G20 presidency provides platform to articulate Africa’s energy needs

Unexpected Consensus

Role of nuclear power in energy transition

speakers

– Fatih Birol

arguments

Country-specific approaches needed to balance priorities

explanation

While not a widespread consensus, Birol’s mention of nuclear power decisions in Germany and Japan as examples of country-specific approaches is unexpected, given the controversial nature of nuclear energy in the context of energy transition.

Overall Assessment

Summary

The main areas of agreement include the need for region-specific approaches to energy transition, the importance of investment in both renewable technologies and critical minerals, and the potential for balancing energy security with transition goals.

Consensus level

There is a moderate level of consensus among the speakers on the broad challenges and opportunities in the energy transition. This consensus suggests a shared understanding of the complexity of the issue and the need for nuanced, context-specific solutions. However, there are still differences in emphasis and approach, particularly regarding the role of fossil fuels and the specific priorities for different regions.

Different Viewpoints

Role of oil and gas in the energy transition

speakers

– Fatih Birol
– Muhammad Taufik

arguments

Energy transition means different things for different parts of the world

Oil and gas still play a role but must be produced more sustainably

summary

While Birol emphasizes regional differences in energy transition approaches, Taufik argues for a continued role of oil and gas, especially in developing countries, albeit with more sustainable production methods.

Approach to energy security and transition

speakers

– Fatih Birol
РMaria da Gra̤a Carvalho

arguments

Energy security and transition can be pursued simultaneously

Europe is focused on reducing Russian gas dependence

summary

Birol argues for pursuing both energy security and transition simultaneously, while Carvalho focuses on Europe’s efforts to reduce dependence on Russian gas as a key security strategy.

Unexpected Differences

Protectionist policies and energy transition

speakers

– Jonathan Price
– Kgosientso Ramokgopa

arguments

Protectionist policies risk slowing the energy transition

G20 presidency provides platform to articulate Africa’s energy needs

explanation

While Price warns against protectionist policies slowing the energy transition, Ramokgopa sees the G20 presidency as an opportunity to highlight Africa’s specific energy needs, which could potentially lead to more regionally focused policies.

Overall Assessment

summary

The main areas of disagreement revolve around the role of fossil fuels in the energy transition, regional approaches to energy security and transition, and the balance between global and regional policy-making.

difference_level

The level of disagreement among the speakers is moderate. While there are differing perspectives on specific approaches and priorities, there is a general consensus on the need for energy transition and the importance of balancing energy security with environmental concerns. These differences reflect the complexity of the global energy landscape and the challenges in implementing a unified approach to energy transition across diverse regions and economies.

Partial Agreements

Both speakers agree on the need for investment in resource development, but Price focuses on mining for critical minerals while Ramokgopa emphasizes renewable energy potential in Africa.

speakers

– Jonathan Price
– Kgosientso Ramokgopa

arguments

Governments need industrial strategies to support mining investment

Africa needs investment to exploit its renewable energy potential

Both speakers acknowledge the importance of balancing energy security and transition, but Birol emphasizes critical mineral supply chains while Taufik focuses on the specific challenges faced by Asian countries.

speakers

– Fatih Birol
– Muhammad Taufik

arguments

Critical mineral supply chains are crucial for both security and transition

Asia faces challenges in balancing energy security and transition

Similar Viewpoints

Both speakers argue that energy security and transition are not mutually exclusive, and that fossil fuels can still play a role if produced more sustainably.

speakers

– Fatih Birol
– Muhammad Taufik

arguments

Energy security and transition can be pursued simultaneously

Oil and gas still play a role but must be produced more sustainably

Both speakers emphasize the importance of international cooperation and platforms to support renewable energy development in developing countries.

speakers

РMaria da Gra̤a Carvalho
– Kgosientso Ramokgopa

arguments

International cooperation needed to support renewables in developing countries

G20 presidency provides platform to articulate Africa’s energy needs

Key Takeaways

The energy transition faces challenges from renewed focus on energy security, geopolitical tensions, and shifting political priorities.

Diversification is crucial for both energy security and successful transition.

Regional differences significantly impact energy transition approaches and priorities.

Critical mineral supply chains and mining are essential but face obstacles in meeting clean energy demand.

Oil and gas still play a role in the transition but need to be produced more sustainably.

Government policies and investment strategies need to balance energy security, economic development, and environmental goals.

International cooperation is needed to support renewable energy development in emerging economies.

Resolutions and Action Items

Portugal aims to achieve 93% renewables in electricity production by 2030

South Africa to use G20 presidency to elevate African energy needs and transition priorities

Oil and gas companies to focus on reducing methane emissions and implementing carbon capture

Unresolved Issues

How to balance protectionist policies with the need for efficient global energy markets

Addressing the concentration of critical mineral processing in a single country

Reconciling short-term energy security needs with long-term transition goals

How to accelerate renewable energy adoption in Africa despite limited investment capacity

Determining the appropriate governance framework for guiding energy transition globally

Suggested Compromises

Pursuing both energy security and transition simultaneously rather than choosing between them

Allowing a continued but more sustainable role for oil and gas during the transition period

Balancing regional economic development with sustainable energy solutions in projects like the Johor-Singapore Economic Zone

Using debt conversion programs to fund renewable energy projects in developing countries

Yes, there are many uncertainties, this is right, but I think we shouldn’t lose ourselves and lose our perspective by looking at all these uncertainties, and I want to highlight a couple of certainties.

speaker

Fatih Birol

reason

This comment shifted the framing of the discussion from focusing on challenges to highlighting opportunities and certainties in the energy transition.

impact

It set a more optimistic tone for the conversation and prompted other speakers to discuss concrete actions and opportunities rather than just obstacles.

Diversification is very important. And finally, for me, a successful clean energy transition is the one which makes the energy systems much more secure and resilient, makes the energy prices affordable, and at the same time, reduces the reliance on other countries which have the reputation of being not a reliable partner.

speaker

Fatih Birol

reason

This comment provided a comprehensive definition of a successful energy transition that balances multiple priorities.

impact

It broadened the discussion beyond just emissions reduction to include energy security, affordability, and geopolitical considerations.

The existing mines we have are ageing. These mines, copper mines in particular, they suffer from grade decline throughout their life. It’s just nature doing its work essentially, but what that means is in the absence of investment we produce less year over year.

speaker

Jonathan Price

reason

This comment highlighted a critical but often overlooked challenge in the supply of materials needed for the energy transition.

impact

It deepened the conversation by introducing complexity around the practical challenges of scaling up mining to meet clean energy demands.

I think what has happened within the last decade is a collision between idealism and economic realities.

speaker

Muhammad Taufik

reason

This comment succinctly captured a core tension in the energy transition debate.

impact

It prompted a more nuanced discussion of the practical challenges in implementing idealistic energy transition goals, particularly in developing economies.

Today’s solar is the cheapest source of electricity generation almost everywhere, especially in Africa where we have 40% of the solar radiation in the world comes to Africa, 60% everybody else put together. Yet, in Africa, as Mr. Minister mentioned, as IEA has been looking since 20 years, one out of two persons don’t have access to electricity, and yet amount of solar power we generate in the entire sub-Saharan Africa is less than we have in Netherlands.

speaker

Fatih Birol

reason

This comment highlighted a stark disparity in renewable energy deployment that challenges simplistic narratives about the global energy transition.

impact

It shifted the conversation to focus more on the unique challenges and opportunities for the energy transition in developing countries, particularly in Africa.

Overall Assessment

These key comments shaped the discussion by broadening its scope beyond a simple narrative of transitioning from fossil fuels to renewables. They introduced nuanced perspectives on the practical challenges of the energy transition, including supply chain issues, geopolitical considerations, and the differing priorities of developed and developing economies. This resulted in a more complex and multifaceted conversation that acknowledged both the urgency of addressing climate change and the real-world obstacles to rapid transformation of energy systems.

How can permitting processes for new mines be made more predictable and efficient while still meeting environmental and community needs?

speaker

Jonathan Price

explanation

This is important to address the time constraints in developing new mines to meet the increased demand for critical minerals needed for the energy transition.

What pricing mechanisms could better support investment in future mining projects?

speaker

Jonathan Price

explanation

Current commodity pricing based on today’s supply and demand doesn’t adequately incentivize investment in future supply, which is crucial for the energy transition.

How can African countries better organize and articulate their needs and aspirations related to the energy transition through the G20 platform?

speaker

Kgosientso Ramokgopa

explanation

This is important for ensuring Africa’s voice is heard in global energy transition discussions and policies.

How can the processing and refining of critical minerals be diversified beyond the current concentration in one country?

speaker

Fatih Birol

explanation

Diversification of processing is crucial for energy security and reducing vulnerabilities in the supply chain for the energy transition.

What is the appropriate governing framework or policy approach to ensure an expeditious and just energy transition while acknowledging practical challenges in different geographies?

speaker

Suman Mishra

explanation

This is crucial for developing effective global strategies that account for varying regional constraints and priorities.

How can energy transition policies be designed to ensure energy security and lead to prosperity, given concerns about industry competitiveness and energy costs?

speaker

Tatsuya Terazawa

explanation

This addresses the need to balance environmental goals with economic concerns in energy transition policies.