Energy sovereignty under strain: from transition to strategic control
For decades, the global energy agenda has been framed around transition: decarbonization pathways, renewable deployment and climate targets. That paradigm is shifting. The central question is no longer only how fast we can decarbonize, but who controls the resources, technologies and value chains that enable it.
By Lénaïg Trénaux, Global Co-Head of Energy, Mining and Industries and Head of Sustainable and Impact Advisory at Societe Generale.
Energy is no longer simply an environmental or economic issue. It has become a core vector of geopolitical power, industrial competitiveness and national security, with critical materials emerging as the foundation layer of this transformation.
Critical materials: the structural constraint of the transition
The energy transition is inherently material-intensive. Electrification, renewable generation and digital infrastructures rely on critical minerals such as lithium, copper, nickel, cobalt and rare earths. These resources are not peripheral; they are the backbone of low-carbon technologies.
Demand is accelerating rapidly, with lithium demand increasing by nearly 30% in 2024, while nickel, cobalt and rare earths recorded annual growth rates between 6% and 8%. Energy technologies already account for around 85% of total demand growth in battery metals(1).
The core constraint, however, is not only geological scarcity and investment in exploration and extraction but also industrial concentration. Processing and refining capacities are highly concentrated geographically: China accounts for around 70% of global refining capacity across a wide range of critical minerals, and up to 90% in rare earth processing(2).
As a result, the pace, cost and even feasibility of the transition increasingly depend on industrial capacity as much as on technological progress.
The race for value chain control
This imbalance has triggered a global race for control.
China has spent decades securing upstream resources while building dominant capabilities across refining, manufacturing and recycling. It remains the leading refiner for 19 out of 20 key strategic minerals globally.
The United States is accelerating bilateral agreements and industrial policies to secure resource access, and Europe is looking for partnerships and a better-defined strategy.
Power now lies less in resource ownership than in the ability to process, industrialize and capture value across the full chain.
Sovereignty redefined: from independence to control
Energy sovereignty can no longer be reduced to domestic production or import dependence. It now depends on end-to-end control, from extraction to end-use technologies.
This control determines not only security of supply, but also pricing power, industrial competitiveness and value capture. In that sense, sovereignty over critical materials has become a prerequisite for mastering the energy transition itself.
This reframes the challenge of reindustrialization. The constraint is primarily economic and structural: mining and refining projects require long investment cycles, high capital intensity and stable regulatory frameworks.
Energy, defense and strategic autonomy
A key evolution is the growing convergence between energy, industrial strategy and defense.
Critical minerals are essential not only for energy systems but also for aerospace, advanced manufacturing and defense technologies. Disruptions are therefore treated as strategic risks, mobilizing actors well beyond the energy sector.
Energy systems themselves are increasingly integrated into national security frameworks, with governments expanding strategic reserves, reinforcing infrastructure and embedding energy and materials considerations into defense planning.
Access to energy and critical resources is now directly linked to national stability and technological sovereignty.
Financing the dual imperative: transition and resilience
For corporates and financial institutions, these shifts are reshaping both risks and opportunities.
Energy and resource dependencies are becoming central determinants of competitiveness, requiring investment decisions to integrate geopolitical, regulatory and climate-related uncertainties.
At the same time, investment needs remain massive. Estimates suggest that several hundred billion of dollars will be required in mining and refining by 2040 to meet energy transition goals(1).
In parallel, opportunities are emerging in recycling and circular economy solutions, which can reduce primary resource dependence while strengthening supply security and industrial autonomy. These secondary supply chains are becoming an increasingly important component of long-term resilience strategies.
Financing the transition therefore requires addressing a dual imperative: decarbonization and strategic resilience; two objectives that are increasingly inseparable.
A new hierarchy of power
The energy transition is now a question of power distribution across the global economy.
Decarbonization remains essential, but it is inseparable from sovereignty, security and industrial strategy. Far from being in tension, sovereignty over resources and value chains is becoming a condition for achieving climate objectives at scale.
The actors that will lead are those able to secure access to critical materials, build robust industrial capabilities and embed resilience into their economic systems.
In this emerging order, energy sovereignty is not a constraint on the transition, it is what makes it possible.
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