The Geopolitics of Renewable Energy in 2026
According to the International Energy Agency’s (IEA) World Energy Investment 2026 report, renewable energy and electrification investments saved the world’s five largest fuel importers (including India and the EU) an estimated $260 billion in fossil fuel import costs in 2025 alone, reinforcing the strategic push away from fossil fuels.
With oil prices consistently breaching $100 per barrel, importing regions (like Europe, India, and Japan) are facing severe cost-of-living crises and inflation. For the last century, global geopolitics was dictated by hydrocarbons (oil and gas), revolving around pipelines, maritime chokepoints (like the Strait of Hormuz), and cartels like OPEC.
However, the global transition to renewable energy has structurally transformed strategic competition. The focus has shifted from oil wells to mineral reserves and from pipelines to technology supply chains.
Critical minerals—such as Lithium, Cobalt, Nickel, Graphite, Copper, and Rare Earth Elements (REEs)—are the indispensable building blocks of the clean energy transition. They are required for electric vehicle (EV) batteries, wind turbines, solar panels, and smart grids.
Unlike oil, which is distributed globally, critical minerals are highly concentrated. More importantly, refining and processing capacity is heavily monopolized. China currently dominates global mineral refining, battery manufacturing, and rare-earth processing. According to recent global outlooks, China accounts for nearly 86% of the refining growth across key minerals.
The transition to green energy carries severe geopolitical risks. For instance, in April 2025, China halted the export of rare earth magnets in retaliation to US tariffs, creating massive supply chain shocks for defense and clean mobility sectors worldwide.
India has ambitious targets: 500 GW of non-fossil fuel capacity by 2030 and Net-Zero by 2070. However, this transition is vulnerable to international supply chain shocks:
India currently imports nearly 100% of its requirements for Lithium, Cobalt, and Nickel. The critical minerals market is relatively small and opaque. Dominant players can artificially crash prices to render new, nascent Indian mining projects commercially unviable, forcing continued dependence.
While India relies heavily on imports for energy transition minerals, it actually possesses substantial, untapped domestic reserves of minerals like Copper (164 million tonnes) and Graphite (211 million tonnes), highlighting a lack of downstream processing capacity. To counter these geopolitical vulnerabilities, India has moved from intent to decisive action between 2024 and 2026
National Critical Mineral Mission (NCMM) has approved in early 2025 with an overarching goal to build a full domestic value chain. It integrates domestic exploration, overseas asset acquisition, and processing infrastructure. The government has amended laws to remove critical minerals from the atomic minerals list, opening them to private participation. Dozens of critical mineral blocks have been successfully auctioned since 2024.
Reeling from the 2025 global supply cuts, India launched a ₹7,280 crore REPM Manufacturing Scheme to build an integrated manufacturing capacity for Rare Earth Permanent Magnets (REPMs) locally, ensuring self-reliance for wind turbines, EVs, and defense.
India has dedicated rare earth corridors and these has announced in the 2026-27 Union Budget, these corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu will cluster mining, processing, and R&D near mineral-rich coastal zones.
India is forging international alliances and “friendshoring”. India is member of Mineral Security Partnership (MSP). This is a US-led coalition of 14 nations (which India joined) aimed at diversifying critical mineral supply chains away from China.
The Quad (US, India, Japan, Australia) announced a $20 billion Quad Critical Minerals Initiative to secure critical mineral supply chains in the Indo-Pacific. India’s state-owned joint venture Khanij Bidesh India Ltd (KABIL) is actively securing lithium and cobalt assets in resource-rich nations like Argentina, Australia, and Chile.
Since deep-seated domestic mining has a long gestation period, India is aggressively pursuing secondary recovery. In late 2025, the Cabinet approved a ₹1,500 crore incentive scheme for recycling End-of-Life (EoL) lithium-ion batteries and e-waste to recover critical minerals domestically.