ACE

Author: Cindy Neil

  • Understanding the Deep-Sea Mining Debate

    Understanding the Deep-Sea Mining Debate

    Introduction 

    The development of renewable energy sources like electric vehicle (EV) batteries and wind turbines, crucial for transitioning away from fossil fuels and achieving the Paris Agreement goals, depends heavily on critical minerals and rare earth elements. China, Chile, and Argentina are key suppliers, mining these minerals to meet current global demands. Notably, South America holds about 75% of the world’s lithium, essential for EV batteries.

    However, the demand for these critical minerals is projected to increase sixfold by 2040. This surge in demand extends beyond lithium to other minerals like manganese and gold. In response, private companies and governments are exploring new sources, including the ocean floor. The Pacific Ocean, in particular, is believed to be a rich source of these minerals, attracting the interest of some Pacific Island nations looking to develop mining sites within their territorial waters.

    International Regulation of Deep-Sea Mining 

    The interconnected nature of the world’s oceans means that currents can transport pollution far from its original source. This global interconnectivity underscores the need for an international regulatory framework to govern deep-sea mining, as decisions made by one country could affect the health of oceans worldwide. In response to this need, the International Seabed Authority (ISA), responsible for overseeing the United Nations Convention on the Law of the Sea (UNCLOS) provisions related to seabed minerals, convened in Kingston, Jamaica, in July 2023. This meeting was critical, as the existing regulations on deep-sea mining had expired that month.

    During the conference, member nations agreed on a two-year roadmap to establish deep-sea mining regulations, with a target to finalize these rules by July 2025. However, it’s important to note that this timeline is not legally binding. The United States, which is not a signatory to the UNCLOS, did not participate in this conference. This meeting in Kingston marks a significant step towards regulating deep-sea mining activities, reflecting the growing global recognition of the need to manage these resources responsibly.

    Pros & Cons of Deep-Sea Mining

    Deep-sea mining, particularly for polymetallic nodules rich in manganese and other minerals essential for renewable energy technologies, is a topic of significant controversy. These nodules, found on the ocean floor, are targeted for extraction to support the growing demand for renewable energy resources. Private companies are investigating various technologies for this purpose, including large seabed vacuums and traditional drilling methods.

    However, the environmental impact of mining the ocean floor is a major concern, with the effects on marine ecosystems largely unknown. Scientists and environmental organizations like Greenpeace have raised alarms about the potential harm to marine life, including species and plants that have not yet been discovered or studied. The disturbance caused by seabed mining could have far-reaching implications for biodiversity and ecological balance in the oceans.

    Additionally, there are concerns related to climate justice, particularly regarding the maritime heritage of Pacific Island nations. While some Pacific Island nations initially spearheaded efforts to develop deep-sea mining, others, like Vanuatu, have voiced opposition. These nations worry about the disruption of their maritime environment and heritage, which are integral to their cultural and economic well-being. This division highlights the complex ethical, environmental, and economic dimensions of deep-sea mining and the need for careful consideration and international collaboration in decision-making processes.

    Ireland, Sweden, New Zealand, and several other countries have advocated for a moratorium on deep-sea mining until more clear and comprehensive regulations are established. This stance reflects growing concerns about the environmental impacts and regulatory uncertainties associated with extracting minerals from the ocean floor. Additionally, some European scientists suggest that the current demand for critical minerals necessary for renewable energy technologies can be satisfied through existing mines and enhanced recycling efforts. This perspective emphasizes the potential of sustainable practices and alternative sources over the relatively unexplored and potentially harmful method of deep-sea mining.

    In the automotive industry, major companies like BMW, Mercedes-Benz, and the Volkswagen Group, all of which require critical metals for the production of electric vehicles, have publicly opposed deep-sea mining. In 2021, these automakers, as members of the Initiative for Responsible Mining Assurance, committed to sourcing minerals only from mines that adhere to certain environmental standards. This commitment is part of their broader strategy to limit the negative environmental impacts of their supply chains, especially in the context of the increasing demand for electric vehicles and the critical minerals they require.

    These developments highlight a growing international consensus on the need for responsible and sustainable mining practices, with a particular focus on protecting marine ecosystems and ensuring ethical supply chains in industries reliant on critical minerals.

    Proponents of deep-sea mining advocate that extracting metals from the ocean floor can be conducted in a responsible manner and is essential for reducing reliance on China’s mineral supplies. This stance is particularly relevant for countries seeking to diversify their sources of critical minerals and mitigate economic risks.

    The United States and the European Union have both formulated strategic plans aimed at lessening their dependence on China for these essential minerals. This initiative is partly fueled by concerns over China’s control over the global supply of rare earths and other critical minerals. An illustrative example of the risks associated with over-reliance on China was evident in the aftermath of the U.S. decision to limit exports of semiconductor technology. In response, the Chinese government threatened to restrict exports of gallium and germanium, which are vital for manufacturing computer chips.

    In pursuit of supply chain security, the U.S. Department of Commerce has recommended a review of regulations related to offshore drilling and mining. The goal is to expedite the permitting process for extraction projects, thereby enhancing the capacity for domestic production of critical minerals. This approach is seen as a way to achieve greater self-sufficiency and security in mineral supplies, reducing the vulnerability to geopolitical tensions and supply disruptions.

    Several governments with identified critical mineral deposits in their territorial waters are showing interest in developing these resources, driven by the potential economic benefits. Norway, for example, has announced plans to develop a vast field of metals in the Norwegian Sea, an area reportedly as large as Germany. The Norwegian government believes that the environmental impact of this project can be minimized and that the extraction of these metals will be beneficial, outweighing potential risks.

    The island nation of Nauru has been instrumental in prompting the current review of International Seabed Authority (ISA) regulations on deep-sea mining. This move is part of Nauru’s strategy to engage in a public-private partnership to exploit the mineral resources within its waters. Similarly, leaders of the Cook Islands view deep-sea mining as a significant opportunity to diversify their economy, which is heavily reliant on tourism, and to foster economic growth.

    On the other hand, some countries like France and the United Kingdom, although they hold licenses to mine the seabed, have decided not to pursue these mining options at present. This decision reflects the complex balancing act governments face between exploiting underwater mineral resources and considering environmental, economic, and social implications. The varying approaches of these countries highlight the global debate over deep-sea mining and the need for careful consideration of both the opportunities and the challenges it presents.

    The Paradox of the Clean Energy Transition

    The extraction, refinement, and transportation of critical minerals necessary for manufacturing electric batteries, wind turbines, and other renewable energy technologies present significant environmental challenges. These minerals are indispensable for achieving independence from fossil fuels and mitigating climate change effects caused by greenhouse gas emissions. The United Nations endorses the transition from fossil fuels to renewable energy as a crucial step towards meeting global climate goals.

    However, policymakers are faced with the complex task of securing a stable supply of these critical minerals while minimizing the environmental damage associated with their extraction. This challenge is particularly acute in the context of critical mineral extraction methods, including deep-sea mining, which have become points of contention. Governments and environmental groups are divided on the best approach to balance these competing needs.

    The debate centers on how to effectively transition to renewable energy sources without exacerbating environmental degradation through the processes involved in obtaining the necessary materials. As the world strives to combat climate change, finding sustainable and environmentally responsible methods of critical mineral extraction remains a crucial, yet contentious, aspect of global environmental and energy policy.

  • Understanding Critical Resource Extraction in the Arctic

    Understanding Critical Resource Extraction in the Arctic

    The Arctic Region

    The Arctic is the northernmost region of the Earth, centered on the North Pole. Most scientists define the Arctic as the area within the Arctic Circle, a line of latitude approximately 66.5° north of the Equator. The Arctic is home to more than 4 million people, including indigenous people such as the Saami, Aleut, and Yupik. The harsh climate and sparse population of the Arctic limited economic development until the impacts of climate change began to transform the environment. The effects of climate change in the Arctic are sobering. Scientists estimate the Arctic region is warming 4 times faster than the lower latitudes. The Arctic Report Card from the National Oceanic and Atmospheric Administration warns that climate change is transforming the Arctic dramatically.

    Climate Change Makes Critical Resource Extraction Possible

    As the permafrost of the Arctic region softens and the ice that normally covers the Arctic sea melts, it has become more feasible to access the resources of the Arctic. Currently, oil, natural gas, and coal are being extracted in the Arctic. The Arctic States are all signatories to the Paris Agreement, which seeks to reduce greenhouse gas emissions. To achieve the goals of the Paris Agreement, governments are supporting efforts to transition from fossil fuels to renewable energy sources. Renewable energy technologies run on critical minerals. The US Geological Survey has listed 50 critical minerals necessary to the renewable energy, technology, medical, and defense sectors. 

    Minerals include lithium and manganese, used in electric batteries, and tellurium, used in solar panels. The International Energy Agency projects that critical mineral demand will rise 6 times the current level by 2040. Many critical minerals are located in the Arctic. Although Arctic resources have many potential benefits, resource extraction in the Arctic can pose threats to indigenous people and the environment, disrupting cultures and ecosystems. The United Nations is working to mitigate those threats with an initiative called Protection of the Arctic Marine Environment by limiting marine litter and encouraging sustainable tourism and economic development in the region. 

    The American Arctic

    The state of Alaska is located in the Arctic, and geologists believe Alaska has deposits of 49 critical minerals. The Biden Administration published the National Strategy for the Arctic Region, which focuses on security, critical resources, climate, and society in the American Arctic. On March 13, 2023, President Biden authorized Conoco-Philips to drill for oil on land leased from the Federal Government. The Willow Project, located on the North Slope of Alaska, drew attention from Americans concerned about the environmental consequences of oil and gas extraction in Alaska. More than 5 million people signed a petition circulated by change.org to urge President Biden to halt the project. Senator Lisa Murkowski of Alaska defended the project, and cited its potential for creating jobs for Native Alaskans.

    The Canadian Arctic 

    Nearly 40% of Canada’s territory is in the Arctic. The Canadian Arctic is rich in natural resources, including critical minerals and vast uranium deposits which can help increase nuclear energy to replace electricity generated by fossil fuels. The Canadian government produced a comprehensive critical mineral strategy and provided funding to support critical minerals projects. Together with its allies, Canada is committed to meeting the goals of the Paris Agreement and to mining the Arctic sustainably. 

    The European Arctic

    The European Arctic States, along with the European Union, are planning to increase mining, shipping, and fishing activity in the Arctic to meet their climate and security goals. It is estimated that Greenland has 25% of the global reserves of critical minerals. In January 2023, LKAB, a Swedish mining company, announced it had discovered Europe’s largest deposit of critical minerals in Kiruna, Sweden. The European Union proposed the Critical Raw Materials Act to expedite critical minerals mining. Increased mining activity in the European Arctic has been criticized by the Saami, an indigenous population in the region, who fear it will disrupt their way of life. The University of Queensland in Australia developed an online tool to respond to these concerns and gather input on Arctic resource extraction from indigenous people, community leaders, scholars, and industry practitioners. 

    The United States and Allies Share Values and Goals in the Arctic

    New European Union Regulatory regimes like the Just Transition Fund, EU and the Critical Raw Materials Act help protect the environment and indigenous communities in the Arctic. Josep Borell, the High Representative of the Union for Foreign Affairs and Security Policy, the European Union’s counterpart to the Secretary of State of the United States, stated, “The impact of climate change, security issues, and rivalries are growing in the Arctic regions. So is the need for cooperation and multilateral agreements.” Similarly, the US Arctic Strategy emphasizes the need to uphold international law and norms in the Arctic. The United States’ security framework in the Arctic helps the European Union and NATO achieve security in the region. Finally, the EU-Canada recent agreement on securing critical mineral supply chains supports developing critical raw material projects in Canada and the EU. It aligns European and Canadian financial support for critical mineral projects to leverage and de-risk private investments. Although some citizens have objected to resource extraction in the Arctic, the United States and its allies are partnering with private industry to speed extraction of rare earth elements, minimize environmental impact, and protect indigenous citizens. The growing importance of the Arctic is an example of how climate change is impacting foreign policy and necessitating closer cooperation between the United States, Canada, and the European Union to reduce harm to the region caused by climate change and increased activity.

  • The Inflation Reduction Act of 2022 and US-EU Relations

    The Inflation Reduction Act of 2022 and US-EU Relations

    The Inflation Reduction Act 

    The Inflation Reduction Act of 2022 (IRA) was signed by President Joe Biden on August 16, 2022. The bill was designed to reduce US dependence on fossil fuels in the transportation and manufacturing sectors. It will also create clean energy jobs, and is projected to create up to 9 million jobs by 2030. 

    Consumer spending on gasoline and energy has risen sharply since 2016. The IRA reduces transportation costs for Americans by offering incentives to consumers and businesses to purchase electric and hydrogen-powered vehicles. Under the law, citizens can claim tax credits of up to $7500 for the purchase of electric and hydrogen-powered vehicles. Vehicles and citizens must meet certain requirements to qualify for the full credit, including:

    • 50% of battery components must be assembled in North America. 
    • 40% of critical raw materials used to make the electric battery must be extracted in the United States or a country with which the US has a trade agreement. 
    • Single filers must have an annual modified adjusted gross income of less than $150,000, or $300,000 for married couples filing jointly. 

    In addition to incentives for consumers, the IRA provides $1 billion to fund zero-emission buses, trucks, and other commercial and government-owned vehicles. Reducing greenhouse gas emissions by 2030 helps the United States achieve the objectives of the Paris Agreement, an international treaty created to limit global warming to less than 2°C, which it formally rejoined in January 2021. The European Union and its twenty-seven Member States also signed the Paris Agreement. To meet the goals of the Paris Agreement, the European Union created The EU Green Deal. With the United States and the European Union both committed to reducing greenhouse gas emissions, leaders were optimistic that the relationship between the European Union and the United States would be strengthened. 

    European Response

    To meet the Biden Administration’s Buy American guidelines, the IRA limits tax credits for hydrogen-powered and electric vehicles to those that have final assembly in North America. European leaders expressed concern that the IRA would have a negative impact on EU automobile and auto parts makers. Germany, France, and Italy have significant auto industries and economists predicted job losses if automakers relocate some of their operations to North America to take advantage of the IRA’s generous subsidies.

    Auto industry leaders appealed to the EU Commissioner for the Internal Market, Thierry Breton, to raise their concerns with the Commission and the Biden Administration. President Emmanuel Macron of France traveled to the United States in late November to discuss the matter directly with President Biden. Biden committed to try to “tweak” the IRA to be more inclusive of European automakers. Breton also began to challenge the European Commission to act quickly to modify its internal market rules to protect the automotive sector in Europe. Commissioner Margrethe Vestager, who protects the level playing field of the Single Market, expressed concern about matching US subsidies. She ensures compliance with State Aid rules contained in the Treaty on the Functioning of the European Union. Articles 107-108 of the treaty specifically address State Aid. Public subsidy of industry by an individual Member State can incentivize businesses to relocate to Member States that provide subsidies, either in the form of funding, favorable taxation, or other means. Subsidies can potentially cause tension among Members and weaken the European Union. State aid disproportionately harms Member States with smaller economies that are not capable of providing direct funding or foregoing tax revenues, so aid that disrupts competition is prohibited. Although it is common practice in the United States for local and state governments to offer incentives to industry to relocate, it is prohibited in the European Union. The European Union is not a federal government. It is a supranational government whose members are independent countries. If Member States fail to cooperate and honor the treaties of the European Union, there is a risk of fragmentation of the Union. 

    Breton, Vestager, leaders of Member States, and industry representatives agreed the European Union needed a response to the IRA; however, they disagreed about what form that response should take. Proposals from Breton, Macron, and German Chancellor Olaf Scholz strongly favored creating EU funded subsidies and allowing Member States to extend national subsidies to industry. Commissioner Vestager and Dutch Prime Minister Mark Rutte expressed the concerns of 11 smaller Member States who opposed relaxing State Aid rules, arguing subsidies could place them at a disadvantage within the European market. The European Union has a complex decision-making process, which makes rapid policy responses difficult. In the United States, Congress can quickly propose laws and pass legislation, as it did in the case of the IRA, which was announced on July 27, 2022, and signed into law on August 16. In contrast, the Green Industrial Plan designed by the European Commission was not proposed until nearly six months after the IRA went into effect. It will accelerate the transformation of Europe’s automotive manufacturing network by speeding up regulatory decision-making. 

    Some IRA provisions had unintended consequences for the European Union and its relationship with the United States. Initially welcomed by EU leaders as a positive step toward meaningful climate action, business leaders quickly identified subsidies that could harm European manufacturers. The fear of European job losses strained US-EU relations. The IRA also caused disagreement among Commissioners and Member States about how to design and finance its own subsidy plan. Commission President Ursula Von Der Leyen urged compromise and maintaining good relations with the United States. 

    Common Goals, Aligned Actions

    Leaders of the European Union and the United States have relied on their strong relationship and shared values to reach limited compromises on the interpretation of the IRA. On December 29, 2022, the United States Department of Treasury announced that Americans will be able to use the IRA tax credit to lease electric and hydrogen-powered vehicles from European automakers. The U.S. Department of Energy created an online tool that allows taxpayers to verify where an automobile was assembled to ensure they can claim the credit. American policymakers continue to review the law and adjust the tools as they refine their interpretations of it. The law may benefit European automakers who have North American assembly plants and provide American consumers with more choices. Finally, talks between US and EU leaders about the IRA have prompted increased dialogue among leaders to coordinate efforts to combat climate change by reducing dependence on fossil fuels. Comprehensive, coordinated policies like the IRA and the Green Deal Industrial Plan help the US and the EU work together to achieve their shared climate goals.

  • Cindy Neil, Luiss University

    Cindy Neil, Luiss University

    Cindy is currently completing a master’s degree in European Studies with a concentration in EU Institutions and Public Policy at Luiss University School of Government in Rome, Italy. She is also pursuing a master’s in Strategic Communication through the University of Iowa School of Journalism and Mass Communication. An Iowa native, she earned a BLS from the University of Iowa with a concentration in Global Studies. Cindy’s current research is the Arctic Policy of the European Union and the role of Observer States in the Arctic Council. She is investigating techniques to help conceptualize and communicate the geopolitical significance of the Arctic for policymakers and opinion leaders.

    In addition to academics, she has volunteered for a number of community service organizations, including serving as a judge for the National History Day-Iowa competition, coordinating communications for the Younger American Poets Reading Series, and fundraising for her community’s hospital foundation. In her free time, Cindy enjoys travel, hiking, gardening, reading, and opera. 

    Linkedin