In La Tribune 21/10/2020
Europe is still under partial containment or curfew and our dynamism is at a standstill. The United States is experiencing a shrill and inconvenient election. Brexit gives birth to a problem.
Contrast on the other side of the planet: in China, the recovery is consistent. Exports of medical equipment were a springtime growth driver, and after a V-shaped recovery, real estate construction, steel production, consumption of copper, aluminum and the construction of batteries for electric vehicles have returned to pre-crisis levels.
The Chinese economy shows off its decoupling from ours. Its resulting strength is a favorable US dollar/Yuan exchange rate and hundreds of thousands of Chinese people being already tested with Covid vaccines.
Chinese transformation to low-carbon mode
For the future another Chinese dynamic is confirmed, because between the electoral programs of Trump and Biden China chooses the competition with the Democratic Green New Deal.
In the preamble to the 14th Five-Year Plan 2021-2025, the details of which will be known at the end of October, and then to its future and ambitious carbon neutrality for 2060, Beijing is using the final stretch of the American elections to ban, without yet saying so completely, Australian coal. Would Biden do better?
The 14th plan will in fact continue the decarbonization of the economy, a long march between the « Yin and Yang of carbon » which is illustrated by the future elimination of 60% of electricity production from coal, and the increase of nuclear, gas, solar and wind power to boost the penetration of electric vehicles to around 30% within 5 years.
For the world’s leading energy consumer and carbon emitter, this is a necessity. Finally, it must protect its environment, so much is its strength inhabited by its own weaknesses: in addition to the fact that a future rise in sea levels would threaten about 130 million coastal inhabitants, climate change and flooding can quickly disrupt major industrial centers, including the Pearl River Delta or the Yangtze River basin, which alone has 600 millions inhabitants and 40% of the national GNP.
Copper, platinum, nickel, lithium
Whatever one thinks of China, and rightly so, it is an advantage for a country to have a doctrine, strategies, plans; strategic solidarities stated, implemented and visible economic results, logically embedded in each other that adapt to contingencies. China’s transformation into a low-carbon economy is experiencing this privilege in its upheaval. It is kindly illustrated by an all-Confucian metaphor of the Chinese president: « Green hills with blue waters are hills of gold and silver ». Indeed, metals illuminate this mutation.
Copper because the production of electricity, its transmission, storage and consumption in electric vehicles, infrastructures or 5G will soon imply an increase in consumption of about 15% of world demand. But will the world production of copper in Covid mode be able to meet the decarbonation objectives? Probably not. It will therefore be necessary to adapt the demand and for example not to replace an internal combustion engine vehicle by an electric vehicle, but rather to be in a ratio of four to one, with the key to the necessity of 5G to manage shared cars and google car-driverless cars.
This reasoning also applies to platinum, a metal very rarely mentioned as a future beneficiary of hydrogen decarbonation. Platinum is five to six times more present in the ion exchange membranes of fuel cells than in the catalysts of gas cars. As long as H² technology does not evolve, the global production of platinum will remain a barrier to hydrogen cars, except in the case of consumer pooling and driverless vehicle sharing. Here, 5G is also needed.
The case of nickel is less problematic. Stainless steels consume 68% of world production, but thanks to substitutions by nickel-free stainless steels and some carbon steels, some of it can be diverted to batteries, especially Canadian and Russian production. In addition, we will experience all the more less nickel deficits since on the one hand the Lithium-Iron-Phosphate batteries used in particular by Tesla and Daimler do not contain nickel (nor cobalt), and on the other hand the risks of overheating and fire of nickel 8-1-1 batteries encountered by several manufacturers recently will not be curbed.
Lithium is not a problem either, production is sufficient, technical progress to reduce consumption is still in progress. Just like the situation of rare earths, which have never been present in the batteries of the future, the whole thing once again turns the « rare metal » fake-news upside down.