President Donald Trump has signed an executive order to ramp up U.S. production of critical minerals. The order uses emergency powers under the Defense Production Act to increase financing, streamline permits, and encourage domestic mining and processing of minerals vital for national security and economic growth.
The goal is to cut down on dependence on foreign suppliers, especially China. China leads the global supply chain for key minerals. The order has raised worries about its effect on the environment and how it matches climate goals.
What Are The Key Aspects of the Executive Order?
-
Defense Production Act for Critical Minerals
The executive order authorizes the use of the Defense Production Act (DPA) to provide financial support to U.S. mining and mineral processing projects. This includes loans and investments from the U.S. International Development Finance Corporation (DFC) and the Department of Defense. The goal is to speed up the production of key minerals. This includes lithium, cobalt, nickel, rare earth elements, and maybe coal.
-
Faster Permitting for Mining Projects
Trump’s order directs federal agencies to speed up the permitting process for new mining and processing facilities. The Department of the Interior has been tasked with prioritizing critical mineral production on federal lands. The administration wants to cut red tape. This will help private companies invest more in domestic mineral production.
-
Expanding the Scope of Critical Minerals
The order lets the National Energy Dominance Council add uranium, copper, potash, and gold to the list of critical minerals. Additionally, there is speculation that coal could be included. This can potentially lead to increased production of fossil fuels under the guise of national security.
Why Is the U.S. Expanding Mineral Production?
The U.S. gets 70% of its rare earth minerals from China. This makes the supply chain weak for important industries like defense, electronics, and renewable energy. China has also imposed export controls on key materials like gallium and germanium. This further increases the urgency for the U.S. to secure its own resources.
Critical minerals are key for military use, particularly antimony. They support missile systems, fighter jets, and advanced communications technology. By expanding domestic production, the U.S. aims to strengthen its defense capabilities and reduce the risk of supply chain disruptions.
Lastly, lithium, cobalt, and nickel are crucial for battery storage, electric vehicles (EVs), and renewable energy infrastructure. Boosting local production of these materials can speed up the clean energy shift and cut down on fossil fuel use.
Global Market Trends and U.S. Critical Mineral Production and Consumption
The global demand for critical minerals has been on the rise, driven by the transition to clean energy technologies. In 2023, lithium demand surged by 30%, while nickel, cobalt, graphite, and rare earth elements also saw significant increases.
Investment in critical mineral mining grew by 10% in 2023; however, this was a slowdown compared to the 30% growth observed in 2022. This is partly due to declining prices putting pressure on producers.
The United States has significant mineral resources but remains heavily dependent on imports for many critical minerals. According to the U.S. Geological Survey’s 2024 Mineral Commodity Summaries, the U.S. was 100% import-dependent for 15 nonfuel mineral commodities and over 50% import-dependent for 49 such commodities.
For instance, aluminum consumption in 2024 reached 4.3 million metric tons, underscoring the nation’s reliance on external sources. For other minerals, refer to the following table for US 2023 consumption and production per USGS report.
Trump’s recent executive order targets several critical minerals, including:
- Rare Earth Elements (REEs): Essential for electronics, defense systems, and renewable energy technologies.
- Lithium: Vital for battery production in electric vehicles and energy storage systems.
- Nickel: Used in stainless steel and battery manufacturing.
- Cobalt: Important for battery electrodes.
- Graphite: Used in batteries and fuel cells.
Economic, Environmental, and Climate Implications
The EO has a significant impact on mining companies. Shares of U.S. mining companies surged following the announcement.
MP Materials, a rare earth miner, saw its stock rise by 4.6%, while coal producer Peabody Energy gained more than 2%. However, Australian and Chinese mining companies experienced stock declines, reflecting concerns over reduced demand for imported minerals.
The decision also has the potential to spur international trade conflicts. China and other major mineral-exporting nations may view this policy shift as a direct threat to their economic interests. This could lead to trade tensions and potential retaliatory measures, further complicating global supply chains.
Environmental Concerns and Climate Impacts
Mining and processing critical minerals contribute about 8% of global carbon emissions. Copper production emits 4.6 tonnes of CO₂ per tonne, while nickel ranges between 12 and 78 tonnes per tonne. However, these emissions do not negate clean energy benefits—EVs still produce half the lifecycle emissions of gasoline cars. Using low-carbon electricity can further lower these emissions.
Coal’s potential inclusion as a critical mineral raises concerns. Fossil fuels from federal lands accounted for nearly 25% of U.S. CO₂ emissions over a decade. Expanding mining on public lands risks habitat destruction and toxic contamination, with 22,500 abandoned mine sites already leaking harmful chemicals.
Securing critical minerals is key for national security and clean energy. Yet, experts also stress the need for sustainable practices. This includes recycling, improved mining tech, and carbon-cutting ideas. For example, using CO₂ to weaken rocks could make mining carbon-negative.
The Biden administration used the Defense Production Act before. This was to boost the production of battery materials in the U.S. The goal is to cut emissions and support renewable energy. In contrast, Trump’s order may list coal and other fossil fuels as critical minerals. This could slow down efforts for net-zero emissions and hurt global climate leadership.
Expanding fossil fuel extraction on federal lands may worsen climate change, undermining progress toward emission reduction targets.
Conclusion: A Double-Edged Sword?
Trump’s executive order to boost critical mineral production is a significant policy shift that aims to reduce dependence on foreign sources, enhance national security, and support key industries. However, the inclusion of coal and the potential rollback of environmental safeguards raises concerns about its impact on climate goals.
As the U.S. moves forward with this strategy, it must find a balance between securing essential minerals and ensuring sustainable, environmentally responsible development. The outcome of this policy will shape not only the country’s economic future but also its role in global efforts to combat climate change.
The post Donald Trump Uses Emergency Powers to Boost U.S. Critical Mineral (and Coal?) Production appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Renewable Energy11 months agoSending Progressive Philanthropist George Soros to Prison?
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Greenhouse Gases1 year ago
嘉宾来稿：探究火山喷发如何影响气候预测
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits