Energy Shift
Explainer: The Science of Nuclear Fusion
The Science of Nuclear Fusion
U.S. scientists at the National Ignition Facility, part of the Lawrence Livermore National Laboratory (LLNL), announced a major breakthrough in nuclear fusion this week.
For the first time ever, scientists successfully produced more energy from a nuclear fusion experiment than the laser energy used to power it.
In the above infographic, we describe nuclear fusion and illustrate how this discovery may pave the future for a new form of clean and sustainable energy.
What is Nuclear Fusion?
Nuclear fusion powers the Sun and the stars, where immense forces compress and heat hydrogen plasma to about 100 million degrees Celsius. At this temperature, the lighter particles fuse into helium, releasing enormous amounts of energy.
Nuclear fusion is a fairly clean energy source as it does not produce harmful atmospheric emissions and only produces a small amount of short-lived radioactive waste.
Scientists have been trying to replicate it on Earth for almost 70 years, using isotopes of hydrogen—deuterium and tritium—to power fusion plants.
Since deuterium is found in seawater and tritium is attained through irradiating lithium (a common element used in batteries), the accessibility of these isotopes means that fusion could become a major source of energy in the future.
The amount of deuterium present in one liter of water, for example, could produce as much fusion energy as the combustion of 300 liters of oil.
However, the real challenge is ensuring fusion power plants generate more energy than they consume.
The Challenge of Fusion Ignition
Fusion ignition is the term for a fusion reaction that becomes self-sustaining, in which the reaction creates more energy than it uses up. Up until now, scientists were only able to break even.
The National Ignition Facility used a special setup called inertial confinement fusion that involves bombarding a tiny pellet of hydrogen plasma with lasers to achieve fusion ignition.
LLNL’s experiment surpassed the fusion threshold by delivering 2.05 megajoules (MJ) of energy to the target, resulting in 3.15 MJ of fusion energy output, according to the U.S. Department of Energy.
Can Nuclear Fusion Energy Be Commercialized Soon?
In recent years, fusion technology has been attracting the attention of governments as well as private companies such as Chevron and Google. Bloomberg Intelligence estimates that the fusion market will eventually be worth $40 trillion.
Besides energy generation, fusion is expected to be used in other markets like space propulsion, marine propulsion, and medical and industrial heat.
However, according to the director of the Lawrence Livermore National Laboratory, Kim Budil, it will take “probably decades” before nuclear fusion energy is commercialized.
During the breakthrough announcement, she noted that it was necessary to produce “many many fusion ignition events per minute” as well as have a “robust system of drivers” before fusion can be commercialized successfully.
Electrification
Where are Clean Energy Technologies Manufactured?
As the market for low-emission solutions expands, China dominates the production of clean energy technologies and their components.

Visualizing Where Clean Energy Technologies Are Manufactured
When looking at where clean energy technologies and their components are made, one thing is very clear: China dominates the industry.
The country, along with the rest of the Asia Pacific region, accounts for approximately 75% of global manufacturing capacity across seven clean energy technologies.
Based on the IEA’s 2023 Energy Technology Perspectives report, the visualization above breaks down global manufacturing capacity by region for mass-manufactured clean energy technologies, including onshore and offshore wind, solar photovoltaic (PV) systems, electric vehicles (EVs), fuel cell trucks, heat pumps, and electrolyzers.
The State of Global Manufacturing Capacity
Manufacturing capacity refers to the maximum amount of goods or products a facility can produce within a specific period. It is determined by several factors, including:
- The size of the manufacturing facility
- The number of machines or production lines available
- The skill level of the workforce
- The availability of raw materials
According to the IEA, the global manufacturing capacity for clean energy technologies may periodically exceed short-term production needs. Currently this is true especially for EV batteries, fuel cell trucks, and electrolyzers. For example, while only 900 fuel cell trucks were sold globally in 2021, the aggregate self-reported capacity by manufacturers was 14,000 trucks.
With that said, there still needs to be a significant increase in manufacturing capacity in the coming decades if demand aligns with the IEA’s 2050 net-zero emissions scenario. Such developments require investments in new equipment and technology, developing the clean energy workforce, access to raw and refined materials, and optimizing production processes to improve efficiency.
What Gives China the Advantage?
Of the above clean energy technologies and their components, China averages 65% of global manufacturing capacity. For certain components, like solar PV wafers, this percentage is as high as 96%.
Here’s a breakdown of China’s manufacturing capacity per clean energy technology.
Technology | China’s share of global manufacturing capacity, 2021 |
---|---|
Wind (Offshore) | 70% |
Wind (Onshore) | 59% |
Solar PV Systems | 85% |
Electric Vehicles | 71% |
Fuel Cell Trucks | 47% |
Heat Pumps | 39% |
Electrolyzers | 41% |
So, what gives China this advantage in the clean energy technology sector? According to the IEA report, the answer lies in a combination of factors:
- Low manufacturing costs
- A dominance in clean energy metal processing, namely cobalt, lithium, and rare earth metals
- Sustained policy support and investment
The mixture of these factors has allowed China to capture a significant share of the global market for clean technologies while driving down the cost of clean energy worldwide.
As the market for low-emission solutions expands, China’s dominance in the sector will likely continue in the coming years and have notable implications for the global energy and emission landscape.
Energy Shift
The ESG Challenges for Transition Metals
Can energy transition metals markets ramp up production to satisfy demand while meeting ever-more stringent ESG requirements?

The ESG Challenges for Transition Metals
An accelerated energy transition is needed to respond to climate change.
According to the Paris Agreement, 196 countries have already committed to limiting global warming to below 2°C, preferably 1.5°C. However, changing the energy system after over a century of burning fossil fuels comes with challenges.
In the above graphic from our sponsor Wood Mackenzie, we discuss the challenges that come with the increasing demand for transition metals.
Building Blocks of a Decarbonized World
Mined commodities like lithium, cobalt, graphite and rare earths are critical to producing electric vehicles (EVs), wind turbines, and other technologies necessary to burn fewer fossil fuels and reduce overall carbon emissions.
EVs, for example, can have up to six times more minerals than a combustion vehicle.
As a result, the extraction and refining of these metals will need to be expedited to limit the rise of global temperatures.
Here’s the outlook for different metals under Wood Mackenzie’s Accelerated Energy Transition (AET) scenario, in which the world is on course to limit the rise in global temperatures since pre-industrial times to 1.5°C by the end of this century.
Metal | Demand Outlook (%) 2025 | 2030 | 2035 | 2040 |
---|---|---|---|---|
Lithium | +260% | +520% | +780% | +940% |
Cobalt | +170% | +210% | +240% | +270% |
Graphite | +320% | +660% | +940% | +1100% |
Neodymium | +170% | +210% | +240% | +260% |
Dysprosium | +120% | +160% | +180% | +200% |
Graphite demand is expected to soar 1,100% by 2040, as demand for lithium is expected to jump 940% over this time.
A Challenge to Satisfy the Demand for Lithium
Lithium-ion batteries are indispensable for transport electrification and are also commonly used in cell phones, laptop computers, cordless power tools, and other devices.
Lithium demand in an AET scenario is estimated to reach 6.7 million tons by 2050, nine times more than 2022 levels.
In the same scenario, EV sales will double by 2030, making the demand for Li-ion batteries quadruple by 2050.
The ESG Challenge with Cobalt
Another metal in high demand is cobalt, used in rechargeable batteries in smartphones and laptops and also in lithium-ion batteries for vehicles.
Increasing production comes with significant environmental and social risks, as cobalt reserves and mine production are concentrated in regions and countries with substantial ESG problems.
Currently, 70% of mined cobalt comes from the Democratic Republic of Congo, where nearly three-quarters of the population lives in extreme poverty.
Country | 2021 Production (Tonnes) |
---|---|
🇨🇩 Democratic Republic of the Congo | 120,000 |
🇦🇺 Australia | 5,600 |
🇵🇭 Philippines | 4,500 |
🇨🇦 Canada | 4,300 |
🇵🇬 Papua New Guinea | 3,000 |
🇲🇬 Madagascar | 2,500 |
🇲🇦 Morocco | 2,300 |
🇨🇳 China | 2,200 |
🇨🇺 Cuba | 2,200 |
🇷🇺 Russia | 2,200 |
🇮🇩 Indonesia | 2,100 |
🇺🇸 U.S. | 700 |
Around one-fifth of cobalt mined in the DRC comes from small-scale artisanal mines, many of which rely on child labor.
Considering other obstacles like rising costs due to reserve depletion and surging resource nationalism, a shortfall in the cobalt market can emerge as early as 2024, according to Wood Mackenzie. Battery recycling, if fully utilised, can ease the upcoming supply shortage, but it cannot fill the entire gap.
Rare Earths: Winners and Losers
Rare earths are used in EVs and wind turbines but also in petroleum refining and gas vehicles. Therefore, an accelerated energy transition presents a mixed bag.
Using permanent magnets in applications like electric motors, sensors, and magnetic recording and storage media is expected to boost demand for materials like neodymium (Nd) and praseodymium (Pr) oxide.
On the contrary, as the world shifts from gas vehicles to EVs, declining demand from catalytic converters in fossil fuel-powered vehicles will impact lanthanum (La) and cerium (Ce).
Taking all into consideration, the demand for rare earths in an accelerated energy transition is forecasted to increase by 233% between 2020 and 2050. In this scenario, existing producers would be impacted by a short- to medium-term supply deficit.
The ESG dilemma
There is a clear dilemma for energy transition metals in an era of unprecedented demand. Can vital energy transition metals markets ramp up production fast enough to satisfy demand, while also revolutionising supply chains to meet ever-more stringent ESG requirements?
Understanding the challenges and how to capitalise on this investment opportunity has become more important than ever.
Sign up to Wood Mackenzie’s Inside Track to learn more about the impact of an accelerated energy transition on mining and metals.
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