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:

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…

🎣 Gone Phishing

Three of these stories are true, one we've made up. Guess which:

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