US, IEA urge Asian countries to diversify energy supply chains

The United States and the International Energy Agency on Tuesday 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 be the impetus for 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% of the global supply chain of solar technology and by 2025 that will grow to a 95% share.

"Reliance for one single product, one single technology – to rely the entire world on one single country is something we all need to think about from an energy security perspective," Birol told the forum.

On the energy supply side, he 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.