In today’s edition:
⚡️ Companies looking to reduce China’s 90% share of refining rare earth elements
🚜 The hidden costs of the world’s food system amount to $12.7 trillion
🌳 Brazilian officials complain EU deforestation regulations are complicating trade deals
⚡️ Energy (1-minute read)
Payin’ Up for Critical Mineral Ores
What happened: A handful of Canadian, German and Australian critical mineral explorers plan to command premium prices for key metals used in electric vehicles, promising quality and consistency in exchange for shifting reliance away from China, the dominant producer and price-setter. Companies include TSX-listed Aclara Resources and Australia’s Ionic Rare Earths.
Details: China’s share of refining is around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements. These minerals are integral to manufacturing magnets for electric vehicles, wind farms and other decarbonisation technologies. Chinese companies have also invested substantially in overseas assets in Australia, Chile, the DRC and Indonesia.
Why it matters: High levels of concentration, compounded by complex supply chains, increase the risks that could arise from physical disruption, trade restrictions or price rises. If China persists with export restrictions, as it has with commodities like germanium and graphite, supply could be further compromised.
Can’t put a price on it…: The miners believe manufacturers will absorb extra costs due to new environmental, social and governance-related legislation and tax incentives like the U.S. Inflation Reduction Act and argue that a premium price is warranted for reliable and sustainably sourced rare earth minerals that are key to the transition to cleaner energy. For manufacturers, the quandary of differential pricing is about judging a quantifiable value that paying a higher price brings… along the lines of: ‘‘What would the $ value impact of export restrictions on lithium be on my ability to make Electric Vehicles for customer orders.” (Full story here).
🚜 AgriTech (1-minute read)
Dollars on the plate as the UN unwraps hidden costs of the global food system
What happened: The United Nations Food and Agriculture Organisation (FAO) has published a report analysing the costs to health, society, and the environment embedded in the world food system. The report reveals the hidden costs of the world’s food system amount to $12.7 trillion, or 10% of global GDP.
The details: 73% of the food system’s hidden costs are linked to poor diets leading to obesity or diseases like diabetes and heart disease. These poor diets result in labour productivity losses and healthcare costs. Environmental impacts accounted for over 20% of hidden costs. The hidden costs of food also vary significantly by country, amounting to 27% of GDP in low-income nations, compared with an 8% average in high-income nations.
Hints for improvement: Some nations, like Japan, have a smaller share of hidden food costs relative to GDP compared to countries like the US and Canada, so it may offer insight for improvement. People in Japan tend to eat more fish and consume less meat and ultra-processed foods.
Following-up: The report suggests reducing hidden costs requires a combination of government interventions, better individual choices, and more responsible behaviour from the food industry. The FAO is working on a follow-up report which will include case studies to assist countries in addressing the actual costs of their food systems. (Full story here).
🌳 Nature (1-minute read)
Deforestation compensation: EU-Mercusor trade deal tricky final touches
What’s happened: Brazilian officials have said new legislation enacted by the European Union to ban the import of goods linked to deforestation was complicating negotiations of a trade deal between the EU and South America’s Mercosur bloc. EU lawmakers approved the regulations in April requiring producers of soy, beef, coffee, wood and other commodities to provide proof their supply chain is free of deforestation.
Trade deal download: Negotiations started in 2000 and were completed in 2019. The deal would slash duties, give Mercosur’s agricultural producers better access to the EU, and offer export opportunities to EU manufacturers. But the EU has since put off signing, largely due to concerns over deforestation in the Amazon – which the Deforestation Act sets out to resolve.
Tricky final touches: Even though the onus on complying with the new rules will be on the EU importers, the Brazilian Foreign Trade Secretary said the commercial impact of increased costs and bureaucracy for exporters cannot be ignored in the trade talks. They have requested:
More time: To implement the deforestation regulations at a meeting in Brussels last week. Companies have until Jan. 1, 2025, to comply with the new law.
Compensation elsewhere: Officials have highlighted that the EU-Mercosur negotiations are an opportunity to influence the implementation of the deforestation rules and to find ways to compensate with trade concessions that maintain a balance in market access.
We expect to find the long-awaited conclusion to the trade negotiations with the EU at a Mercosur summit on Dec. 7. (Full story here).
💭 Little Bytes
Quote: “If our current global efforts to tackle climate change were a film, it would be called Hot Mess.” David Reay, a climate scientist at Edinburgh University.
Stat: Temperatures in October were 0.85C above the long-term average for the month — The Copernicus European Earth Observation Agency.
Watch: 7 established ways to remove CO2 from the atmosphere
🗞 In other news…
Colombia is to cull some of the 166 hippos descended from a herd owned by drug lord Pablo Escobar in the 1980s. Colombian experts have long warned that the hippos’ uncontrolled reproduction threatens humans and native wildlife. (Full story here).
Deforestation in Colombia’s Amazon is forecast to have fallen 70% in the first nine months of 2023 from the year-ago period, Environment Minister Susana Muhamad said on Tuesday, though she warned drought could reverse the trend (Full story here).
Dietary guidelines in the US may soon warn against ultra-processed foods, with the guidelines potentially changing how Americans view nutrition by focusing on how their food is made and what happens before they bring it home. (Full story here).
UK meat consumption is at the lowest level since records began. Data reveals an average of 854g a week eaten at home in 2022, with the 14% decline since 2012 driven by the cost of living crisis and lifestyle changes. (Full story here).
The European Investment Bank is backing a new debt-for-climate swap for Barbados. The Caribbean island nation is set to raise $295 million of debt structured as a sustainability-linked bond or loan. (Full story here).
Australia is offering residents of the Pacific island nation of Tuvalu a chance to migrate to escape climate change as part of a landmark treaty with one of the countries most affected by global warming. (Full story here).
🎣 Gone Phishing
Three of these stories are true, one we’ve made up. Guess which:
Scientists create chimeric monkey with 2 sets of DNA
Surgeons performed the world’s first transplant of an entire human eye
Researchers develop plants with glowing petals
Pizza Hut started selling snake-topped pizza in Hong Kong
