SYDNEY (REUTERS) - The United States and the International Energy Agency on Tuesday (July 12) urged Asian countries to diversify their supply chains for energy and critical minerals so they are not dependent on countries such as China and Russia.
International Energy Agency (IEA) Executive Director Fatih Birol and US Energy Secretary Jennifer Granholm said the current energy crisis, stemming from sanctions on Russia, should spur Indo-Pacific countries to focus more on the transition away from fossil fuels.
However, that would require the region to move away from relying on China for solar power technology and countries like the Democratic Republic of Congo and Russia for critical minerals needed for electric vehicles and batteries.
"We want to make sure that we are not as nations under the thumb of petro-dictators, under the thumb of those who don't share our values, under the thumb of those who would like to control strategic aspects of the supply chain," Granholm said at the Sydney Energy Forum.
The forum is being co-hosted by the Australian government and the IEA.
Birol said China accounts for 80 per cent of the global supply chain of solar technology and by 2025 that will grow to a 95 per cent share.
He and Granholm said relying on one country for any single technology or fuel should be avoided, having learned that lesson from the loss of Russian energy supply.
"I worry that China has big footed a lot of the technology and supply chains that could end up making us vulnerable, if we don't develop our own supply chains," Granholm told reporters on the sidelines of the forum.
"From an energy security point of view, (it) is imperative that nations that share the same values develop our own supply chains, not just for the climate but for our own energy security," she said.
On the energy supply side, Birol said anyone planning large new fossil fuel investments which will only come on line in several years' time need to consider the climate risk and business risk for investors as the world switches to cleaner energy.
"We have to bring the gas, coal and oil demand down if we want to reach our climate targets," Birol said.
Granholm and Australia's Energy Minister Chris Bowen on Tuesday signed an agreement for the two countries to work together on energy research, including bringing down the costs of long-duration energy storage and electrolysers to produce hydrogen.