California and the Critical Mineral Supply Chain

California stands at the forefront of the United States’ clean energy transition, driven by some of the world’s most ambitious climate targets—targets that demand vast quantities of critical minerals. Resources such as lithium, rare earth elements, copper, and cobalt are vital to decarbonisation technologies including electric vehicles (EVs), batteries, wind turbines, and solar energy systems. While California possesses strategically significant mineral deposits, unlocking their full potential requires navigating a range of environmental, social, and economic challenges.

The state’s energy transition represents a wide-reaching effort to decarbonise the power grid, reduce greenhouse gas (GHG) emissions, and achieve carbon neutrality by 2045. California’s climate strategy, set out by the California Air Resources Board (CARB), includes a target to cut GHG emissions by 85%, reduce oil consumption by 94%, and achieve a 100% clean energy grid by 2045. The state has made notable progress: by 2024, solar power accounted for 32.7% of electricity generation, while natural gas dropped to 34.4%, signalling a swift shift towards cleaner energy. Key contributors to the renewable energy mix include utility-scale solar, wind, geothermal, and hydropower. California’s battery storage capacity has also expanded rapidly, reaching 13.4 GW by late 2024, playing a critical role in grid stability and the integration of intermittent renewables.

California reached a major milestone in reducing emissions ahead of schedule, meeting its goal to return GHG levels to 1990 benchmarks by 2020, four years early. This success underscores the effectiveness of its climate policies, while simultaneously supporting economic growth and providing a compelling model for other jurisdictions globally.

However, transmission constraints present a major obstacle to bringing new clean energy projects online. To meet its 2045 clean energy goals, California requires an estimated $30 billion in transmission infrastructure investments over the next two decades. The intermittent nature of solar and wind also demands reliable, zero-carbon ‘firm’ power solutions, such as long-duration storage or advanced clean technologies, to maintain grid reliability. Rising infrastructure costs risk disproportionately affecting low-income communities, highlighting the importance of equitable policy design.

Utilities are mandated to procure 60% of their electricity from renewable sources by 2030, and to reach 100% clean electricity by 2045. Reforms have been introduced to accelerate the development of offshore wind, geothermal projects, and long-duration storage solutions.

At the core of California’s climate leadership is its legally binding commitment to achieve carbon neutrality by 2045—removing as much carbon from the atmosphere as it emits. This overarching goal is supported by specific legislative mandates, including Senate Bill 100 (de León, 2018), which requires the transition to 100% renewable and zero-carbon electricity by 2045, with an interim target of 60% by 2030 under the state’s Renewable Portfolio Standard (RPS).

These commitments represent the evolution of California’s long-standing environmental leadership. The state’s energy and climate policies are shaped through a multi-agency approach involving the California Public Utilities Commission (CPUC), the California Energy Commission (CEC), and CARB.

California’s decarbonisation efforts go beyond electricity, extending to buildings and transport. In the built environment, the state aims to install 6 million heat pumps by 2030, shifting households and businesses away from gas to cleaner electric heating and cooling. In transport, California has set a target for 75% of all vehicles to run on clean energy by 2045, which will reduce emissions while placing additional demand on the electricity grid.

Battery storage has emerged as a key enabling technology to support deeper integration of renewables. At the same time, widespread electrification across sectors is driving a sharp rise in electricity demand. CARB projects a 76% increase in electricity use by 2045 relative to 2022 levels, fuelled by the electrification of buildings, transport, and the growing energy needs of data centres and AI infrastructure. Meeting this demand will require major expansions in generation, transmission, and distribution capacity.

Realising California’s clean energy vision will involve transformative investments in grid modernisation and infrastructure. Recognising this, the U.S. Department of Energy has issued a $15 billion loan, the largest ever granted to a U.S. utility, to Pacific Gas & Electric (PG&E) for Project Polaris. This initiative aims to expand hydropower and battery storage capacity, enhance transmission infrastructure through reconductoring and grid-enhancing technologies, and enable virtual power plants across PG&E’s service area.

Adapting the grid to the realities of climate change is equally important. Grid hardening measures and intelligent system designs are essential to reduce risks from extreme weather, particularly wildfires. PG&E’s pole replacement programme, which upgrades up to 30,000 poles annually, uses enhanced design and construction standards, while advanced safety equipment such as fast-acting fuses helps mitigate fire risk.

The distribution network also requires substantial upgrades to support growing electrification. Local circuits must be reinforced to enable EV charging at homes—whether single- or multi-family dwellings and expanded public charging infrastructure is needed to facilitate clean transport across the state. These investments are crucial not only for decarbonisation but also for improving air quality in communities situated along major transport corridors and industrial zones.

California’s Critical Minerals strategy: Integrating circular economy and ESG principles

Among its mineral assets, California’s rare earths and lithium deposits offer significant opportunities to lead the clean energy transition. Strategic projects like Mountain Pass and Hell’s Kitchen could reduce reliance on foreign suppliers, build resilient supply chains, and support the shift to renewables. The Mountain Pass mine in San Bernardino County—operated by MP Materials—is the United States’ only active rare earth element (REE) mine and one of the world’s richest deposits. With REE concentrations of 7–8%, the mine now processes ore into rare earth oxides like neodymium-praseodymium, which are vital for permanent magnets in EV motors and wind turbines. This development is improving supply chain resilience by reducing US dependence on Chinese processing.

Governor Newsom described the Salton Sea region as the "Saudi Arabia of lithium. " It holds enough reserves to support the production of 375 million EV batteries. The "Hell’s Kitchen" geothermal-lithium project, launched by Controlled Thermal Resources in January 2025, is expected to produce 25,000 metric tonnes of lithium hydroxide annually, more than quadrupling current US output. This integrated extraction method promises a cleaner, less water-intensive alternative to traditional mining.

California’s commitment to high environmental standards and socially responsible extraction underpins its broader energy strategy. The state embeds sustainability into its legal and planning frameworks, influencing energy and mining practices across the western US. While mining will remain essential in the short to medium term, global estimates suggest over 300 new mines will be needed to meet projected EV battery demand—California benefits from stringent federal environmental laws, including the National Environmental Policy Act, Clean Air Act, and Clean Water Act. These provide a stronger baseline for responsible domestic extraction than many jurisdictions worldwide.

California has historically mined 32 of the 50 minerals deemed critical by the US government, underscoring its long-standing role in the nation’s resource base. However, it also faces a legacy of over 5,000 abandoned mines, many of which pose ongoing risks to water, air, and soil. The US Environmental Protection Agency identifies more than 47,000 contaminated sites in the state, including some leaking mercury and heavy metals.

Expanding mineral extraction has raised concerns among Indigenous communities and environmental groups. Projects like Hell’s Kitchen have faced legal challenges from organisations such as Comite Civico del Valle, citing inadequate environmental assessments and the risk of harm to sacred lands. Tribal leaders have stressed the importance of avoiding a repeat of extractive injustices and ensuring Indigenous rights are respected in project planning and execution.

California must carefully manage trade-offs between accelerating the energy transition and protecting biodiversity, community health, and cultural heritage. As highlighted at UCLA’s 2024 Emmett Institute symposium, lawmakers, regulators, and courts are grappling with how best to balance ambitious climate goals with environmental justice and equity.

To support long-term sustainability, California is advancing policies to promote mineral recycling and circular economy solutions. Senate Bill 235, introduced in January 2025, tasks the Department of Resources Recycling and Recovery with assessing technologies to extract critical minerals from waste streams such as used batteries, solar panels, and electronics. Recycled REEs could meet up to 40% of demand in the US, China, and Europe by 2050, while existing e-waste already contains more copper and cobalt than future deep-sea mining is likely to produce before 2035.

California is also strengthening ties with neighbouring states, such as Nevada, to develop regional supply chains for both energy and minerals. This cross-border collaboration supports more efficient resource use and reinforces domestic capacity, positioning the western US as a critical hub in the global clean energy economy.