On AI and energy: ‘Infrastructure is destiny‘

In the first panel of the Forum, “Thinking big and building bigger,” Global Energy Center (GEC) Senior Director and Morningstar Chair Landon Derentz led a conversation on meeting the energy demands needed to power AI. The discussion featured Mariam Almheiri, group chief executive officer of 2PointZero and chair of the international affairs office of the Presidential Court of the United Arab Emirates (UAE); Chris James, founder, chief investment officer, and chairman of Engine No. 1; Chris Lehane, OpenAI’s chief policy officer and vice president of global affairs; and Chase Lochmiller, co-founder, chief executive officer (CEO), and chairman of Crusoe. 

“AI and energy are inextricably linked,” began Derentz, outlining the challenge that industry and policymakers face in needing to “smash through the bottlenecks” to enable technological progress. Lehane reflected on the energy-related challenges OpenAI grappled with as it became the fastest digital platform in history to reach 100 million users. On lessons learned, Lehane stated that “infrastructure is destiny,” and that AI breakthroughs can only happen when providers are able to bring together “chips, data, talent, and energy” to facilitate this game-changing technology. Lochmiller suggested that AI can help unlock a “new era of abundance”—but before material abundance can be reached, energy abundance is needed to make that a reality.  

James continued by defining the obstacles in meeting AI’s energy demands. “Energy is a fairly linear system, but the demand for compute is exponential.” James advised that if policymakers and industry can overcome bottlenecks such as project permitting, outdated regulations, and credit availability, they can foster “an enormous amount of reindustrialization across the United States.”  

Almehri then contextualized the international trends that preceding speakers had identified. “When I think of creating AI clusters, there are certain elements that regions have to combine,” she said, ranging from their ability to channel strategic investments to having adequate infrastructure and energy. Citing the UAE’s relevant advantages, Almehri counseled that “for this AI megatransition, we need a transformation on the energy side”—to do that, she continued, requires partnerships. 

Derentz continued by asking panelists about the timelines, regulatory hurdles, and geopolitics associated with AI growth. “The age of intelligence is incredibly resource intensive,” noted Lehane, “and this resource intensity is where we’re seeing bottlenecks.” Lochmiller cited Crusoe’s work in Texas as showing not only that “every aspect of the economy is required,” to realize AI’s potential, but that “every aspect of the economy will benefit.” Regarding international AI rivalry, Almehri highlighted that while the UAE has “made it clear to everyone that we are partnering with the United States,” it is important for major players to cooperate on global tech governance and “work together to build standards.”  

Derentz concluded by asking participants the top of the policy wish list. They identified regulatory adaptability, innovative capital solutions, public-private partnerships, and international collaboration. Most fundamentally for the future of AI, is a change in perspective. “It’s a mindset,” said James. “This country is at its best when it thinks big, acts big, and builds big: we need to get back to that.” 

Pathways to industrial competitiveness and trade

The panel “Pathways to industrial competitiveness and trade,” moderated by Saphina Waters, director of stakeholder engagement and communication at the Oil and Gas Decarbonization Charter (OGDC), explored the complex intersection of trade, competitiveness, and climate policy—something panelists described as a puzzle with one thousand pieces. 

Emphasizing the urgent need to reshore US manufacturing, Sarah Stewart, CEO of Silverado Policy Accelerator, called for an aggressive agenda to “build, protect, and promote” that aligns policy tools with clear construction objectives.  

Sasha Mackler, senior vice president and head of strategic policy at ExxonMobil Low Carbon Solutions, noted that the company is focused on strengthening domestic manufacturing and expanding energy exports. He stressed that climate policy must evolve from being just a matter of regulation to one integral to business models. 

Participants criticized the absence of a clear, concise, and universally accepted carbon accounting system. Without that system, panelists said international collaboration is hindered and domestic implementation becomes more challenging and that a harmonized, interoperable framework would help simplify climate-related policy and economic planning. 

On the European Union’s Carbon Border Adjustment Mechanism (CBAM), Stewart expressed concerns about potential discriminatory effects. She argued that while identical systems are not necessary, interoperability is essential to ensure fairness and global cooperation. 

The panelists argued that creating a level playing field for US manufacturers is not just a climate issue—it is a matter of national and economic security. They held that ensuring American industries are not unfairly disadvantaged must be a policy priority. 

The makings of a manufacturing powerhouse

The panel “The makings of a manufacturing powerhouse: Legacy strength and new frontiers,” moderated by Neil Brown, nonresident senior fellow at the GEC and managing director of KKR Global, explored how manufacturers are navigating today’s complex geopolitical landscape, focusing on capital flows, project financing, and talent development. 

One of the central topics of discussion was the strategic role of emissions accounting. Karthik Ramanna, co-founder and principal investigator at the E-Liability Institute, suggested that when carbon accounting is viewed merely as a reporting requirement, it tends to become a burden. He argued, however, if reframed as a tool for product differentiation, it can become a source of value creation. Brandon Spencer, president of the motion business area at ABB, added that using emissions data in a strategic—not just operational—way can become a real competitive advantage for companies. 

Catherine Hunt Ryan, president of manufacturing and technology at Bechtel, presented a two-part framework for managing complexity: “what to continue” and “what to consider.” Companies should prioritize core competencies, she said, particularly in engineering and subject-matter expertise, while also identifying and managing critical supply chains and building data-driven execution models. At the same time, organizations must consider their ability to embrace change in a dynamic global environment. 

Looking ahead to the next decade, the panel discussed which regions are likely to emerge as manufacturing leaders in this new geopolitical context. Julian Mylchreest, executive vice chairman at Bank of America, remarked that the United States is well positioned to be among the winners. 

Leveling the global playing field

In a leadership spotlight moderated by Dan Brouillette, former US secretary of energy, Sen. Bill Cassidy (R-LA) emphasized that the world must adapt to new geopolitical realities. China has gained a competitive edge by not enforcing environmental or pollution standards, allowing it to strengthen both its economy and military. Meanwhile, the United States and European Union have adopted stringent climate regulations, putting their industries at a relative disadvantage. Cassidy also argued that differing regulatory regimes have created an unfair global marketplace. He proposed leveling the playing field with a US version of CBAM: a foreign pollution fee. This fee would apply to imports from countries that do not adhere to US environmental standards, helping to protect domestic industry and workers. 

Cassidy highlighted the strategic importance of producing natural gas domestically. He noted that natural gas supports manufacturing, replacing coal and thereby reducing emissions. Moreover, argued Cassidy, by producing gas domestically, the United States can support economic policies, which supports US working families. 

Unlocking energy abundance to enable equitable access

To wrap the first day’s panels, Phillip Cornell, GEC nonresident senior fellow and principal at the Economist Impact, moderated a discussion on creating abundant, affordable, and reliable energy to sustain economic growth, foster innovation, and promote national security. The panel featured Jude Kearney, member of the board of advisors at the African Energy Chamber; Tarik Hamane, CEO of Morocco’s National Office of Electricity and Drinking Water; Thomas R. Hardy, acting director of the US Trade and Development Agency (USTDA); and Bob Pérez, Baker Hughes’ vice president for strategic projects. 

Cornell framed achieving abundance as “one of the most consequential energy questions of our time.” With 800 million people across the globe still lacking access to electricity while technology-related demand grows rapidly, Cornell said it is crucial to “build systems that can deliver energy abundantly, equitably, and affordably.”  

Hardy discussed USTDA’s role in fostering energy abundance through international partnerships. While administrations change, Hardy noted, USTDA continues to work on projects that contribute to US security and prosperity, “working with our partners and meeting them where they are” to grow different forms of energy supply. 

Next, Kearney elaborated on Africa’s role in achieving abundance. Advising that access is key, he highlighted the need for an “abundance of thoughtfulness and good governance.” Pérez, offering a private sector view, added that the formula for abundance, ultimately, is rather simple: “I’ve never seen a good project not get money,” he said, “the question is how you get to a good project.”  

Finally, Hamane expanded on the theme of partnerships by sharing lessons from Morocco. The country has achieved near-universal rural electricity access, up from less than a quarter only three decades ago. As Morocco looks to build infrastructure that can connect its growing renewable production to new markets in Europe and Africa, Cornell concluded by lauding these projects as a “a physical manifestation of the integration needed to achieve abundance.”   

2PointZero, ABB, Baker Hughes, Bank of America and ExxonMobil are sponsors of the Atlantic Council’s Global Energy Forum. More information on Forum sponsors can be found here. 

Elena Benaim is a nonresident fellow with the Atlantic Council Global Energy Center.

Paddy Ryan is a former assistant director with the Atlantic Council Global Energy Center. He is a senior writer/editor at the University of California Institute on Global Conflict and Cooperation.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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To compete in the global AI race, the United States must dramatically expand its power supply. Replacing the Inflation Reduction Act with the FUEL-AI Act would reorient energy policy toward national security, fast-tracking domestic energy production and infrastructure to power America’s AI future.

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The post The energy system is more complex than ever: navigating AI, competitiveness, and growth appeared first on Atlantic Council.

Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

As the 2025 Global Energy Forum convened on Tuesday in Washington, DC, just blocks away at the White House, national security officials were mulling over the US response to the war between Israel and Iran.  

“Right now, Iran has a choice,” Brett McGurk, distinguished fellow at the Atlantic Council and former White House coordinator for the Middle East region, said at the Forum.  

“The White House offered a deal to Iran about six weeks ago . . . Iran not only did not really respond to that; it actually escalated its nuclear program in the face of this,” McGurk said, pointing to activities at the Fordow nuclear site. 

For McGurk, if Iran accepts the nuclear deal, “this crisis would be over.” But if it doesn’t, it would be “looking at the possibility of a US strike on Fordow.”

When it comes to escalation in the Middle East, Helima Croft—global head of commodity strategy and MENA research at RBC Capital and a member of the Atlantic Council Board of Directors—said that “the risk of this spilling over into energy is low. But it’s not zero.”  

Below are more highlights from the conversation, moderated by William F. Wechsler, senior director of the Rafik Hariri Center & Middle East programs at the Atlantic Council, where Croft and McGurk also talked about the United States’ response options and the region’s future.

The objectives 

• McGurk said that if he were in the Situation Room, he would list three objectives for the commander in chief: The first is to protect Americans and defend Israel—which would involve “surging defense interceptors.” The second is to “contain this to Israel and Iran” and “avoid a broader regional escalation.” The third, McGurk explained, is to work with Israel on succeeding in their objectives: “dismantlement of the nuclear program and the missile program.” 

• McGurk said that what happens in the next week “is potentially quite decisive,” because it could weaken Iran’s influence in the region. That, he said, would set “conditions for a much more peaceful, integrated Middle East that we all want.” 

• “You talk about a decisive historical period: We’re living in it,” he said. 

The options

• McGurk said that a military response has previously had “massive risk” associated with it, but “Iran has made a series of fateful strategic miscalculations” since October 7, 2023, reducing those risks. 

• One such risk was the possibility of retaliation from an Iranian proxy group, such as Hezbollah; but that is “no longer a threat,” McGurk said, with Hezbollah indicating that it does not want to be involved in this latest exchange of strikes. 

• Another risk was Iran’s air defense, including its use of Russian air defense systems, but that risk has faded as “Israel has complete air supremacy” over Iran. “So the window of availability for a military option is now very open,” McGurk said. 

• He added that he could see the US administration using the threat of this military option to “try to get a deal.” But if that deal does not come to fruition, “then we have to be prepared to actually do the strike,” McGurk added. “And I think you do have to back it up.” 

• “The worst case here would be to leave Iran with that Fordow [site] and ten cascades [of advanced centrifuges] intact,” McGurk said. “So it’s a deal or it’s a military strike.”

The impact

• Croft said that the market is “very sanguine” about the energy risks associated with the conflict. “We have ample supply on the market right now,” she noted.  

• If the United States decides to launch an attack on Fordow, Croft said, there would be “a little pop” in prices. But the bigger concern among market players is whether Iran plans to “internationalize” the costs of this war, such as by rallying its proxy groups in targeting tankers and shipping corridors such as the Strait of Hormuz. 

• That could yield some temporary disruption. “I don’t think the market would be prepared for the export infrastructure being struck,” she said. 

• She added that there is also concern “about risks to other countries’ energy facilities where they may not have taken the necessary steps to fortify those facilities.” 

• Until the war inflicts a massive impact on oil supply, Croft said she would not expect a “preemptive surge” of barrels from the Organization of the Petroleum Exporting Countries (OPEC). “They are already unwinding a voluntary cut,” she said. “OPEC has made it pretty clear: They’re not going to fill a gap in the market until one emerges.” 

• Croft added that there is much at stake in achieving a stable, prosperous Middle East region, as governments continue to build more resilient societies and to diversify their economies. “Having a stable security environment is so important for the millions of young people in the region whose futures really rest on everything that these governments are trying to undertake,” she said. 

Katherine Golden is an associate director on the Atlantic Council’s editorial team. 

Editor’s note: RBC Capital Markets is a sponsor of the Atlantic Council’s Global Energy Forum. More information on Forum sponsors can be found here. 

The post What comes next in the Iran-Israel war, from a US response to energy impacts appeared first on Atlantic Council.

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Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

Speakers

Helima Croft
Board Director, Atlantic Council; Managing Director and Global Head of Commodity Strategy and MENA Research, RBC Capital Markets

Brett McGurk
Distinguished Fellow, N7 Initiative, Rafik Hariri Center & Middle East programs, Atlantic Council

Moderator

William F. Wechsler
Senior Director, Rafik Hariri Center & Middle East programs, Atlantic Council

Event transcript

Uncorrected transcript: Check against delivery

WILLIAM F. WECHSLER: Thank you for—once again, for everyone being here, being part of this discussion. It’s quite important. And it comes at, of course, an absolutely critical moment for those of us who’ve spent our lives caring about the geopolitics and stability/security of the Middle East.

So we’re going to have a thirty-minute discussion here with two of the most well-positioned people to give us their views on what’s going on now and what we should expect.

From my own point of view, I just want to lead off by saying I see four real scenarios going forward: a great scenario, a good scenario, a bad scenario, and a terrible scenario. The great one is that the military objectives in the current campaign are met and the Iranian regime is not able to pose the kind of existential threat to the region that it—of the Iranian people taking matters into their own hands. A good scenario is that the Iranian regime comes back to the Trump administration and wants to do a deal on eliminating their enrichment of their nuclear program. A bad scenario is the military objectives are not met and Iran goes nuclear. And a terrible one is that the region is in war, which could involve the United States.

So the two people that I have here discuss are Brett McGurk, who has joined the Atlantic Council recently as a distinguished fellow working our Middle East Programs and our N7 Initiative, a joint partnership of the Atlantic Council and Jeffrey M. Talpins Foundation; and Helima Croft, the head of commodities at RBC Global and the head of the Middle East there as well.

We’re going to talk about security and energy issues here today. Let me start with you, Brett. Tell us what—you know, as we sit here the people in the Trump administration are gathering at some point today in the Situation Room to talk about what the options are for the United States to advance the good scenarios I talked about and minimize the risk of the lower scenarios. You’ve spent more time in that Situation Room than anybody I know talking about these issues. What would you be telling the president today?

BRETT MCGURK: Well—is this working? OK. Well, thank you, and congratulations, Atlantic Council, Landon, and everyone setting this up, and it’s great to hear from Dr. Sultan this morning. And, Fred, great to see you.

I caveat comments on what’s happening to say if anyone tells you they know exactly where this is heading or making kind of bold predictions they don’t know what they’re talking about. This is truly a completely unprecedented situation.

It flows out of the events of October 7th. I’m happy to kind of talk about the broader strategic context but you asked a specific question so let me get to it. If I was in the Situation Room right now I think, from the White House perspective, we have three immediate objectives.

Number one, obviously, we want to protect Americans and we want to help defend Israel. That is, like, first priority. So making sure we’re surging defense interceptors, everything. I’ve dealt with that an awful lot in the last year when I was in the White House. That’s number one.

Number two, try to contain this to Israel and Iran. Avoid a broader regional escalation. I think that’s actually a very achievable objective. So far I think that’s going fairly well—something we dealt with every day, every hour, from October 7th on.

I don’t know how many predictions of uncontrollable regional war there have been since October 7th. There has not been an uncontrollable regional war because of what the United States has done, frankly, consistently day by day, hour by hour, month by month.

Number three, I think you want to be working with the Israelis to ensure a focus on their declared objectives and avoid a mission creep scenario. Their declared objectives are dismantlement of the nuclear program and the missile program.

So those are kind of the three immediate objectives. But on the third one it’s very important because we know an awful lot about this. The Iran nuclear program has been a vexing challenge across administrations and the Rubicon here has been crossed, and I think we’ll mention that one of the worst outcomes would be this kind of ends with the main enrichment facility in Fordow intact.

And let me say a little bit about that because there’s a lot of focus about what is Israel doing, why. But Iran has made a series of fateful strategic miscalculations from October 7th on. It decided after October 7th to basically support a multifront war against Israel, and I lived through this and watched the whole thing.

They turned on Hezbollah to open a northern front. They turned on the Houthis to open a southern front. They supplied the militias in Iraq and Syria to open additional fronts. They directly attacked Israel twice in April and October. That is—October 7th miscalculations.

What happened? Hezbollah was basically knocked out. You have a new government in Lebanon. The Assad regime collapsed. You have a new government in Syria. We had a ceasefire in Gaza and hostages coming out. I’m hopeful we can still get back to a ceasefire there. You had the militias in Iraq declaring a ceasefire, relations in the Gulf very strong, and Iran in its weakest position since October 7th. So that’s kind of where things were left.

On the nuclear side, Iran continued to escalate its program. And just last week the IAEA came out with its comprehensive report that was asked for last year and found flagrant—what was their word?—egregious failure of Iran to live up to its nuclear commitments and focused a lot on Fordow.

In Fordow right now, buried into a mountain, there are ten cascades of very advanced IR-6 centrifuges. That cannot be left intact. And I think the way the White House sees this, and the policy right now as I read it, is the White House offered a deal to Iran about six weeks ago. I don’t know every detail. It’s described as a very fair deal. But that would basically give the world confidence that Iran is not and will not ever move towards a nuclear weapon.

And Iran not only did not really respond to that. It actually escalated its nuclear program in the face of this, including just last week saying they’re going to feed fuel into the cascades in Fordow and actually open a new underground enrichment facility. So Iran has just made these series of miscalculations. And I used to lead this channel in Oman with the Iranians and told them repeatedly, if you keep this up, it’s inevitable, inevitable, somebody will take care of this problem. And that’s kind of where we are.

So right now Iran has a choice. I mean, Abbas Araghchi, the foreign minister of Iran, can call Steve Witkoff, President Trump’s envoy, and say, you know, I kind of—I looked at the offer you put down six weeks ago. Actually, it’s pretty good. I think we’re going to take it. And I think this crisis would be over. Or they could not do that, looking at the possibility of a US strike on Fordow. I’m just saying that as an analyst.

But in any case, to Will’s four scenarios, this has to end without Iran’s nuclear-enrichment program intact. And hopefully that can end diplomatically. That option is still available. There’s still an off-ramp. Or the military campaign is now joined. The Israelis have a lot of options. And the US has a big option when it comes to Fordow.

WILLIAM F. WECHSLER: Thank you very much for that, Brett.

Helima, I want to talk—to turn to the energy markets. The energy markets have—don’t seem to have built in the risk that—of some of the scenarios that—of some of the scenarios that I and Brett were talking about. Can you help us understand why that is, what Iran could do that would change the markets’ views, and then how OPEC and others would react and the United States would react to that?

HELIMA CROFT: Great. Thank you so much. And Fred, thank you so much for convening us again. And Dr. Sultan, what an extraordinary open to the conference today.

As you mentioned, Will, I think the market is very sanguine about the risks entailed in any type of escalation in the Middle East at this moment. I think a lot of it goes back to the Russia-Ukraine war. There had been this expectation right away—remember what oil prices did right after the Russian invasion of Ukraine. We shot up. We were running to $130. Analysts were talking about potentially $200-a-barrel price of oil. There was an expectation that we could see three million barrels of Russian oil off the market.

And when that did not materialize, I think a lot of market participants were like, we have overplayed this risk. A number of prominent investors were burned betting on a Russian supply disruption. And they were like, I’m no longer going to price in risk of disruption. You can tell me about it, but I want to see it before I start pricing this in. And we have a situation right now in the market where we are well-supplied. You know, US production has been strong. Production out of countries like the United Arab Emirates, the investments that ADNOC has made in expanding spare capacity, means that we have ample supply on the market right now.

But the question is, Will, and we talked about this, if we were to see even a repeat of what we saw in 2019, if we saw attacks on tankers—remember, in 2019, after we reimposed maximum-pressure sanctions in May, we did have tankers hit off the coast of Fujairah. They were not sunk, but they were damaged. We had drone attacks on key pipelines over that summer, including the east-west pipeline. And then in September we had the attack on Abqaiq, the world’s largest oil-processing facility.

And to some extent because that did not yield sustained disruption—and, well, we talked about that. You know, was this a ceiling of Iran’s disruptive capabilities in 2019? Could they have done far more damage to Abqaiq if they had chosen to do so? But a lot of market participants were, like, we’ve seen the worst out of this. And if it did not yield a sustained disruption in 2019 when Abqaiq was hit, I really don’t need to be worried about it now unless it actually happens.

Now, people would say, the risk is potentially low. I’ve heard many experts say the risk of this spilling over into energy is low. But it’s not zero. And if you did have a situation—even last night—where’s my friend Amena Bakr? We were back and forth, you know, on our, you know, texts last night, because we had two tankers or three tankers on fire last night. And our immediate concern was, is this a repeat of 2019? Have those tankers been struck. Is Iran seeking to internationalize the cost of this conflict? Now it turns out there was a collision. It does not look like they were actually struck by a missile or a mine. But the concern was there right away.

So if we were to see some type of incident—we’ve already seen domestic energy infrastructure targeted. We’ve already seen South Pars struck. We’ve seen attacks on the important Haifa Refinery in Israel. We’ve had oil depots struck in Iran. All domestic. All kind of warning shots. But, again, I don’t think the market would be prepared for the export infrastructure being struck. And, again, that may never happen. And the Iranians may judge that the cost of doing so is too high. The Israelis may decide not in their interest to defund Iran by attacking Kharg Island, which would take off 90 percent of Iran’s oil exports.

But, again, the risk isn’t zero. And if you were to have something—even though we’re sitting at seventy-five dollars today—if you were to have just a repeat of anything we saw in 2019, we would move materially higher. Now, the question about OPEC, I don’t think OPEC is looking to add barrels to the market this time because of this situation. They are already unwinding a voluntary cut. We expect more rolling OPEC barrels on the market. But OPEC has made it pretty clear, they’re not going to fill a gap in the market until one emerges. So I would not expect, for example, a preemptive surge of a million-plus barrels, unless we see clear evidence of a supply disruption.

WILLIAM F. WECHSLER: Thank you very much. So the implications of that is, because the risk isn’t built into the markets today, if we do have this, the market impact would be much larger than it would be. And it would be a—would be a shock.

HELIMA CROFT: I think the market is taking it as a—I think energy markets—based on everything Brett said, like, you know, we’ve had this war in the Middle East that has not disrupted energy supplies to date. Again, the clearest one was what happened with Russia [and] Ukraine, where people were really thinking, are we going to do to Russia what we did to Iran in terms of secondary sanctions? I mean, we did a lot of work, though, to prevent a Russian disruption. Again, massive releases from the SPR, carveouts in terms of energy sanctions. We did price caps after the Europeans went forward with the sixth package of sanctions, which banned the import of seaborne oil into Europe and did a services ban. There was an active effort by the White House to ensure that the market would be well supplied. So—but I think the message or the takeaway, from many market participants is, call me when there is a disruption. You tell me there’s a lot of risk, but I’m waiting to see it materialize.

WILLIAM F. WECHSLER: Thank you very much for that.

Brett, I want to come back to you. You know, the issue, as you alluded to, Fordow, Fordow, Fordow. That’s the question. That is—that’s what’s going to be on the mind of President Trump. You served President Trump in his—in his first term. You’ve been in the Oval Office with him. He’s made absolutely clear over a long period of time that he doesn’t want a war with Iran. What’s different now? What would cause him, in your mind, to make that decision? And what are ways that events could unfold that would make it more likely?

BRETT MCGURK: I’d say, first, look, nobody wants—I think no president wants to order a military strike anywhere, frankly. I mean, I’ve been around four presidents. It’s, like, the most difficult decision. And anybody with the experience over the last twenty years, and if you spend time in Iraq like I did and others, like, you better go at such a decision with heady analysis, prudence, calculation, thinking through every unintended consequence.

The issue with Fordow—and I’m just going to—a lot of you know this. But it was a secret underground facility found by intelligence, announced to the world in 2009. The JCPOA had a lot of problems. It did say no enrichment at Fordow until 2030. After the JCPOA—US left the JCPOA, Iran started installing centrifuges in Fordow. And they eventually put in ten cascades of the IR-6s, which are the most advanced. And they started enriching to 60 percent uranium grade, which can spin up very fast to weapons grade. And you just read the IAEA report from last week.

This is a huge national security challenge. And I think the hope was that it could be dealt with through a deal. I mean, frankly, we in the—in the Biden administration had worked on this knowing that this year, 2025, is the year to deal with this problem, because there’s a deadline. The deadline, again, under the JCPOA, a provision its critics like is called snapback. Snapback means any member of that deal who’s still a member, basically France and the UK, can go to the UN Security Council and say, all international sanctions on Iran snapback. And they can do that until October of this year, when that expires under the JCPOA. So this is always the year to deal with this problem. And the hope, again, still, is that it can be dealt with diplomatically.

Now, the military option has had massive risk to it. Some of them—and being around this issue over the years I’m not revealing anything that’s not known—Hezbollah. Hezbollah had 150,000 to 200,000 missiles and rockets hanging over Israel. Any military strike into Iran, you risk Hezbollah unleashing those missiles on Israel. No longer a threat. Very significant. Hezbollah, even after the start of Israel’s military operation, has said: We want nothing to do with this. Second, air defense. Iran has pretty good air defense. Russian air defense systems, S-300s. There’s the risk of a pilot being taken down. That’s a big risk. That’s no longer there. Israel has complete air supremacy over Iran, which is an extraordinary thing. And that changes the entire calculation. Third, Iran has what it has. It has proxies. It has terrorism. It has missiles and rockets. And we know all that.

So the window of availability for a military option is now very open. And then how do you use that? Do you use that to try to get a deal, which I can actually see the administration doing? And if you say, if that—if that negotiation fails, then we have to be prepared to actually do the strike. And I think you do have to back it up. And around town if you say that, it’s, like, well, that means you’re going to lead. Look what happened in the Iraq War. This is not an Iraq War scenario. We invaded Iraq in 2003 with 130,000 troops, very small force, to overthrow a government and install an entirely new system.

I mean, that—talk about ends and means gap and unintended consequences? This is—and I’m not discounting the seriousness of this—but this is a military operation that has been planned, trained on, for, like, going back ten or fifteen years. And so it is available to the president. And the Pentagon’s job is to make it available and discuss it, if the president chooses to do it. And right now, it’s available as a backstop to diplomacy. And, again, anyone talking to Abbas Araghchi, he should call Steve Witkoff tomorrow, or right now, and say, you know what? I re-looked at the deal you put down. It’s pretty good. Let’s actually get together and do it. That’s the way out of this.

And being through the crisis since October 7th, I mean, this—sometimes it’s—I can get—frustrated is not the right word. But there are ways out of these problems. And right now, there could be a—we want a ceasefire in Gaza. Ceasefire in Gaza, if Hamas releases ten hostages, you have a sixty-day ceasefire in Gaza. Israel signed up to that. The US has signed up to it. It’s there. Iran right now—this crisis can end if Iran accepts the deal on the table. Or, I think, the military option becomes very viable.

And given where we are, the worst case here would be to leave Iran with that Fordow and ten cascades intact. So it’s a deal or it’s a military strike. I mean, I just—I think that is where we’re heading, and the events over the last twenty-four hours, I think, made that pretty clear. And that’s probably being discussed right down the street right now.

WILLIAM F. WECHSLER: You know, I’ve been briefed that we got about—that Iran at the current op tempo and the current projections of Israeli taking launchers off the battlefield that there’s about a—about a week, at least, more runway of these current level of operations continue. Of course, Iran also has by my count about three thousand short-range weapons that don’t threaten Israel but threaten our friends in the Gulf if things get—things get a lot worse.

My question to you, Helima, is in the scenario that Brett was just talking about, about the United States taking a strike on the—on the nuclear facility in Fordow, what’s that implication to the energy markets? And then what does the US do if the energy markets go a little haywire?

HELIMA CROFT: Well, I mean, certainly I think that, you know, US action against Fordow you would see, you know, a little pop in prices. But again, I think given the sort of bias of the market—I would say the recency bias of the market to say if it’s not an energy facility let’s take a pause, I think the real question would be in an endgame scenario for the Iranian government, again, A, what would come after—we talk about regime change, but who’s going to emerge to run that country? But the concern would be, I think, from the people who watch energy markets, who have spent time in the Middle East, who have been to places right after attacks have happened is, would you see proxy groups?

Like, would you see potentially risk to—we’ve talked about Straits of Hormuz, but I always think about, like, risks to Basra. I think about the risk to Iraq’s four-million-plus production because of Iranian-backed militias that operate very close to those facilities. So we would be watching, you know, what would happen in terms of, obviously, tankers. We would look to what would happen to—who are—where is the sort of soft security underbelly in terms of the energy system in the Middle East? And again, I would be concerned about risks to Iraq. I’d be concerned about risks to other countries’ energy facilities where they may not have taken the necessary steps to fortify those facilities.

So I don’t think the risk is—I do not think it is tail risk in a regime that feels its days are numbered, that they are not going to at least try to impose economic cost on the West and the rest of the world.

WILLIAM F. WECHSLER: Well, thank you very much.

In just the brief amount of time that we have left, let me—let me ask each of you to leave us with a thought that we haven’t talked about and, frankly, if it’s possible, that you think most people aren’t talking about enough. Like, what should we be thinking about that most people aren’t? Let me start with you, Brett.

BRETT MCGURK: Man. Right now I think what we’re all thinking about is what we should be thinking about, which is what is going to happen in the next week. And it is—you talk about a decisive historical period; we’ve living in it. We’re living in it.

And I—and I think the potential for a Middle East—I’m looking at a lot of friends here in the audience—the potential for this region is just enormous. It is enormous. I though the president’s trip was the right thing to do, very successful. What’s happening in UAE is extraordinary, Saudi Arabia, throughout the Gulf—everything that was just talked about in this panel.

And Iran has been a huge problem in this region for decades. And what has happened to Hezbollah and Iranian networks and Iran since October 7th sets conditions for a much more peaceful, integrated Middle East that we all want. And Iran is a spoiler to that; there’s just no question about it. So what’s going to happen here in the next week, I think, or so is potentially quite decisive.

And if we were here two years ago, and the question was hypothetically what if Israel launches a massive air attack on Iran, like, tomorrow—what would happen—I think Helima would have said it’s going to be all-out Middle East war, and energy markets, and everything else you can imagine. And actually, it’s happening right now. Israel controls the skies of Iran.

I mean, this is like—you know, and I just have to say I am proud of what the United States of America has done since October 7th, not without controversy. And these are hard calls, and they should be scrutinized. But I am proud of what we have done to reduce the risks of an all-out Middle East conflict, to significantly weaken Iran and all of these networks that threaten so many people, and to set the conditions for a far more peaceful, prosperous, integrated Middle East region.

With that said, there are going to be spoilers around and terrorist groups around and extremists around, many of them funded and supported by Iran. But an Iran without the sword of Damocles of a nuclear-threshold state is a much different problem. And here we are with potential to actually resolve that, at least for a significant period of time.

And I will just finish. I hope—I hope Iran finds a way to take a deal, the deal that the US has put on the table. And if not, I think there’s no other way.

So I have to answer that question, Will, by what should we be thinking about? It’s what’s happening right now. I don’t know what else—at least that’s what I’m thinking about.

HELIMA CROFT: I will be super fast.

To echo what you pointed out about the enormous progress that we’ve seen in the Middle East—I mean, it started by the UAE with the incredible economic transformation and diversification program. I mean, Dr. Sultan, I think your portfolio speaks to everything you do in that country, just even beyond energy. And you look at the other countries, Saudi Arabia. You think about what Kuwait is trying to do, taking enormous steps to diversify their economies, to future-proof their societies. And it’s predicated on a stable security environment.

And so I do think that we should be sanguine about what’s at stake if we do not find a solution that enables, you know, a stable, prosperous Middle East. And having a stable security environment is so important for the millions of young people in the region whose futures really rest on everything that these governments are trying to undertake.

WILLIAM F. WECHSLER: Thank you very much. I think you actually hit on what I was hoping you would hit on, which is not only the risks of the region but the potential of the region is what we also need to be thinking about deeply right now.

With that, I want to say thank you very much to our panelists here for a really fascinating discussion on the issues of the day. Thank you all for listening to us.

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Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

For Sultan Al Jaber, the United Arab Emirates’ minister of industry and advanced technology, the race to establish artificial-intelligence (AI) supremacy is “essentially an energy play.”

Al Jaber, who is also the head of national oil company ADNOC and the renewable energy company Masdar, spoke at the opening of the 2025 Global Energy Forum, hosted by the Atlantic Council’s Global Energy Center.

“The race for AI is not just about code . . . it’s about gigawatts,” he said, explaining that one query on ChatGPT uses ten times as much energy as a Google search.

“Over the next five years, the US alone will need anywhere between 50 and 150 gigawatts of new installed capacity,” Al Jaber noted. “Meeting this demand is not just a technical challenge,” but a “once-in-a-generation” opportunity, he added.

At the same time, Al Jaber noted that AI can help “unlock its own energy challenge,” by helping energy grids optimize their efficiency and power generation.

Below are more highlights from his remarks, which also touched upon energy policy reforms and the widening conflict across the Middle East.

An engine of peace

• Speaking as the conflict between Israel and Iran continues to escalate, Al Jaber called upon “all parties” to “show restraint.” He also pushed for “peace over provocation, calm over confrontation, and progress through partnership—and only partnership.”
• “Moments like these remind us that energy is not just the engine of progress,” he said. “It is a cornerstone of peace, stability, and ensuring prosperity.”

Shift into hyperdrive

• Meeting AI’s energy demand, Al Jaber argued, will require a “systemwide shift” that brings the energy, technology, finance, and policy sectors “in sync.”
• It will also require an effort to “hyperscale” energy, by creating a “reliable base load” of energy sources such as gas, renewables backed by energy storage, and nuclear breakthroughs, Al Jaber said.
• He added that such an effort would also require placing a “pragmatic pause” on the early retirement of existing power plants, to help ensure constant supply while energy leaders work to bring nuclear back into the mainstream.

Power to the people

• “Power generation is only half of the story, though,” Al Jaber said. “Getting the power to the end user is the other half, and . . . it’s the more complex part of that equation.”
• He added that solving the equation—updating the energy grid in the United States—would require “an investment surge” of $300 billion annually. “You can’t run tomorrow’s technology on yesterday’s grid,” he added.
• Al Jaber announced that ADNOC would be increasing its US energy investments, issued through ADNOC’s XRG arm, from $70 billion to $440 billion over the next ten years. “The United States is not just a priority. It is more of an investment imperative,” he said.
• But beyond investment, policy can also help, he added, pointing to measures that de-risk capital investments and fast-track permitting.

Katherine Golden is an associate director on the Atlantic Council’s editorial team.

Editor’s note: ADNOC and XRG are sponsors of the Atlantic Council’s Global Energy Forum. More information on Forum sponsors can be found here.

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Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

Event transcript

Uncorrected transcript: Check against delivery

SULTAN AL JABER: Good morning, everyone. It is indeed a great pleasure to be back here in Washington, DC. And it’s a real pleasure to see so many friends, colleagues, and partners at this very important forum.

Let me begin by thanking my dear friend and partner Fred Kempe for his commitment, and his guidance, and his support throughout the years. And allow me also to thank his team for working very closely with us and for hosting this very important and relevant forum. With your focus on energy security, economic competitiveness, and global prosperity, this forum could not be more on point.

Colleagues, before I continue allow me to address the evolving situation in our part of the world. The United Arab Emirates stands for dialogue, for de-escalation, and diplomacy. We call on all parties to show restraint. And we reaffirm our belief in peace over provocation, calm over confrontation, and progress through partnership, and only partnership.

Colleagues, moments like these remind us that energy is not just the engine of progress. It is a cornerstone of peace, stability, and ensuring prosperity. And as we say—or, as we stay committed to dialogue and diplomacy, we must also stay focused on the opportunities that lie ahead. Because while the world seeks calm, a new chapter in human progress is being written. And this chapter is defined by two simple truths. The first is that artificial intelligence is driving the next stage of evolution. And the second is that AI is driven by energy. In short, AI supremacy is essentially an energy play.

And the race for AI is not just about code. In fact, it’s about gigawatts. Every advance in AI uses more energy. A single ChatGPT query uses ten times the energy of Google search. AI generated video, one hundred times more. And we are now entering the era of the one gigawatt hyperscaler, where a single datacenter consumes as much electricity as a city of the size of Pittsburgh. And over the next five years, the US alone will need anywhere between 50 and 150 gigawatts of new installed capacity.

And meeting this demand is not just a technical challenge. It is a once-in-a-generation investment opportunity. In fact, it is an opportunity that will require a system-wide shift, with energy, technology, finance, and policy all operating in sync. That’s why yesterday, and here in Washington, DC, and in partnership with The Atlantic Council and MGX, we brought together leaders from all these relevant sectors to the second ENACT forum. And we do this in an effort to answer the fundamental and pressing questions, and to help build an integrated roadmap for a systemwide action.

Our first recommendation may seem obvious, but in my view, it is very urgent: In the age of hyperscalers, we must hyperscale energy. That means reliable baseload like gas, renewables backed by storage, breakthroughs from [small modular reactors] to fusion, and perhaps most critically a pragmatic pause on early retirements of existing power plants while we bring back nuclear to be part of mainstream energy mix.

Power generation is only half of the story, though. Getting the power to the end user is the other half. And in fact, it’s the most—it’s the more complex part of that equation. The fact is, you can’t run tomorrow’s technology on yesterday’s grid. And many—and that’s a fact—many of our grids were built for a completely different century and a completely different circumstance.

Wait times for key components like transformers and turbines can take more than three years to make them available. And this is not just a supply chain problem; it is a bottleneck to industrial growth, and that’s how we should view it. It is a bottleneck to economic prosperity and to industrial growth.

And solving it will require an investment surge of up to 300 billion US dollars annually in the US alone. We must de-risk major capital investments, and here policy can and must help. Policy cannot hold up progress. And we must take the gridlock out of the grid.

Currently, there are about 2,600 gigawatts of planned capacity around the world waiting for a proper grid connection. We must fast-track permitting and unlock that great potential. Let us train the one million electricians needed for a twenty-first-century power system. And let’s not forget that AI can unlock its own energy challenge by managing peaks and dips in demand, optimizing grid flows, and supercharging operational efficiency.

Friends, colleagues, and partners, the opportunity ahead is massive, but the window to act is very narrow. And the key to success is cooperation and true partnership. That is why the UAE is wasting no time in taking our powerhouse energy partnership with the US to the next level.

Over the next ten years we plan to grow our US energy investments sixfold, from the existing 70 billion US dollars to 440 billion US dollars. And we will do this through XRG, our international energy investment company. We are an anchor investor already in the largest LNG plant here, in Texas, and we produce specialty chemicals across the United States of America through Covestro and Nova Chemicals. And through Masdar, we have developed 5.5 gigawatts of renewable energy and storage capacity from coast to coast, and we are just getting started.

And to help harness our ambition, we just opened and activated our XRG-Masdar offices here in Washington, DC. Because, for us, the United States is not just a priority; it is more of an investment imperative. This is not just capital. It’s conviction in a shared future.

Partners, colleagues, and friends, to realize the full power of AI we must give it the power it needs. And this starts with a coordinated roadmap, a holistic approach, a comprehensive, cohesive roadmap that can be applied locally and scaled globally. We need policy that clears the path, infrastructure that carries the load, and investment that meets the moment. AI and energy are the twin engines of human progress—two engines, one direction, fast-forward into the future. And I’m here to invite you all to help shape that future together. I thank you.

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This paper draws on my professional experience working on energy and climate issues in the Eastern Mediterranean, as well as many conversations with policymakers, technical experts, and civil society stakeholders from Athens to Beirut and from Istanbul to Cairo. The renewable energy revolution offers both cleaner power and a practical foundation for cooperation through shared infrastructure and capital flows. The region’s energy future is as much about finance, diplomacy, and institutional trust as it is about technology. My aim here is to explore how financial mechanisms can bridge historic divides and support a shared energy transition. My hope is that this paper contributes to reimagining the Eastern Mediterranean not as a collection of competing interests, but as an interconnected energy community bound by mutual prosperity and resilience.

• Introduction
• Rising tides: Meeting the Mediterranean’s surging energy needs
• From pledge to power: Speeding the region’s renewable revolution
• Beyond borders, beyond banks: Innovative financing for regional energy
• Shared foundations: Creating a regional energy community
• Shared horizon: Finance and diplomacy for a unified Eastern Mediterranean energy landscape

Introduction

The Eastern Mediterranean region stands at a critical juncture in its energy development. Positioned as a geopolitical crossroads with significant renewable energy resources and strategic importance, the region encompassing Greece, Cyprus, Turkey, Syria, Lebanon, Israel, Palestine, Jordan, and Egypt has the potential to become a leader in sustainable energy while strengthening regional cooperation and economic integration.

This study examines how the Eastern Mediterranean can secure a sustainable energy future through a two-pronged approach: strategically financing next-generation grid technologies that leapfrog legacy infrastructure challenges, while simultaneously developing integrated financing mechanisms that foster cross-border cooperation. This dual strategy aligns technological innovation with regional stability and market integration needs, creating a framework for sustainable development that transcends political boundaries.

The Eastern Mediterranean’s abundant renewable energy potential, particularly in solar and wind resources, presents a transformative opportunity. The region could generate approximately 144 percent of its projected 2050 electricity demand through renewable energy sources.¹ Yet despite this potential, significant challenges persist. Aging and fragmented grid infrastructure, geopolitical tensions, and uneven regulatory frameworks hinder energy integration.

Additionally, ongoing political conflicts, geopolitical tensions, and maritime boundary threats in the region complicate the development of cross-border infrastructure, while the region remains heavily dependent on fossil fuels at a time when global climate commitments push for rapid energy transition.²

Meeting these challenges requires more than traditional approaches. This paper argues that innovative financing mechanisms can serve dual purposes: funding advanced infrastructure development while simultaneously functioning as instruments of regional cooperation. By strategically structuring financial tools that encourage cross-border collaboration, the Eastern Mediterranean can transform its energy landscape while creating economic interdependencies that help overcome historical political tensions.

The analysis unfolds in four parts. First, it examines the regional context—focusing on power demand trends, the state of grid infrastructure, and the region’s renewable energy potential. Second, it analyzes how COP28 commitments (made at the 2023 climate conference) intensify the need for rapid renewable integration and technological leapfrogging. Third, it evaluates the financing mechanisms available to fund this transition, from multilateral development banks and green bonds to Islamic finance and bilateral investment. Finally, it explores how these financing tools can support frameworks for regional collaboration, including physical infrastructure development, regulatory harmonization, energy diplomacy, and governance structures.

Rising tides: Meeting the Mediterranean’s surging energy needs

The region’s energy landscape is characterized by growing demand, aging infrastructure, and untapped renewable potential against a backdrop of complex geopolitical relationships. These interrelated factors explain why the strategies of technological leapfrogging and regional integration are necessary for sustainable energy development in the Eastern Mediterranean.

Regional power demand trajectory

Electricity demand across the Eastern Mediterranean is expected to grow substantially in the coming decades. Turkey, a pivotal economy in the region, saw its electricity consumption reach 348 terawatt hours (TWh) in 2024, marking a 3.8-percent increase from the previous year.³ Projections indicate a rise to 380 TWh in 2025, 455 TWh by 2030, and 510 TWh by 2035.⁴

This growth trajectory is mirrored in Egypt, Syria, and Lebanon, driven by population growth, urbanization, and economic development. Meeting this demand sustainably requires a massive expansion of renewable energy capacity and modernized infrastructure to support it.

Recognizing the potential and cost competitiveness of renewable energy systems, countries in the region have established ambitious renewable energy targets. Turkey aims to double its electricity capacity by 2035, with renewable energy providing nearly 65 percent of power.⁵ Egypt has set a target of renewable energy providing 42 percent of its power by 2030 and 58 percent by 2040, while Greece plans to cover at least 60 percent of its power needs with green electricity by 2030.⁶

Untapped renewable potential

The Eastern Mediterranean possesses immense renewable energy potential that remains largely untapped, though Turkey and Greece have made progress in this area. The whole Mediterranean basin’s current renewable capacities stand at 90 gigawatts (GW) for solar photovoltaic and 82 GW for wind energy, with a potential exceeding 3 TW for the whole basin—a figure that underscores the opportunity for rapid expansion.⁷

The Eastern Mediterranean’s total renewable energy capacity in 2023 was around 90 GW, with research suggesting that the region could potentially generate 144 percent of its projected 2050 electricity demand through renewable energy sources.⁸ Egypt could produce 188 percent of its demand from solar and wind energy, with 76 GW of surplus electricity production. Syria could produce 592 percent of its total demand, while Turkey and Greece could produce 105 percent and 96 percent, respectively, of their 2050 demand.⁹

According to the author’s estimates, if the pipeline of solar, wind, and hydropower projects in Egypt is fully implemented—including projects that are announced, planned, or under construction—its renewables generation capacity would grow twelvefold, in line with those of other North African nations. If the pipeline of solar, wind, and hydropower projects in Greece is fully implemented, this would result in a sevenfold increase in renewable energy generation capacity.¹⁰ These estimates are not just an opportunity to enhance energy security and accelerate the energy transition. They are also an economic opportunity with the potential to create jobs, stimulate investment, and position the region as a global leader in the growing clean energy sector.

The rapidly growing power demands across the Eastern Mediterranean necessitate expanding renewable energy capacity while also fundamentally rethinking how electricity is transmitted and shared. Addressing this challenge requires examining the current state of interconnection infrastructure and identifying opportunities to transform the region’s fragmented grid systems into an integrated network.

The interconnection imperative

Cross-border transmission grid interconnections are of cornerstone importance in the development of power systems. Grids that depend on intermittent renewable energy sources, such as solar and wind, benefit greatly from interconnections for balancing the intermittent nature of renewable sources. Because different countries have varying electricity demands throughout the day, spare capacities and shortfalls can be balanced between different grids.

The Eastern Mediterranean’s grid infrastructure presents a fragmented landscape in which cross-border electricity trade is limited. Northern countries such as Greece benefit from advanced energy grids, while southern and eastern regions lag behind. Across the whole Mediterranean, northern-shore countries have sufficient, albeit underutilized, interconnections, while southern-shore countries lack interconnection infrastructure and synchronization. ​Additionally, there are few north-south interconnections, with only a link from Spain to Morocco and another from Turkey to Syria.​¹¹ This disparity creates both a challenge and an opportunity for leapfrogging conventional development paths.

Eastern Mediterranean countries continue to prioritize energy self-sufficiency through domestic power generation rather than regional power trading. With the exception of the Palestinian territories, which import nearly all (99.4 percent) of their electricity due to minimal local generation capacity, several countries maintain exceptionally low power import levels—around 1 percent of their total consumption—including Cyprus (0 percent), Lebanon (0.078 to 3.61 percent), Jordan (0.29 to 2 percent), and Egypt (0.29 to 0.41 percent). Similarly, with the exception of Greece and its integration into the European electricity market, power exports remain negligible throughout the region, with most countries exporting less than 1 percent of their generated electricity. This self-contained approach stems from incompatible technical systems among national grids that impede synchronous operation, difficulties in maintaining grid stability across borders, and persistent political tensions that discourage deeper energy integration.¹²

Some interconnections exist in the Eastern Mediterranean but are underutilized or nonoperational. Many of the interconnections are used purely on an emergency basis to cover unexpected or scheduled outages, or are not in operation at all. Key connections such as Turkey-Syria (400 kilovolts (kV)), Jordan-Syria (400 kV), and Lebanon-Syria (400 kV, 220 kV, and 66 kV) are currently inactive, largely due to regional conflicts and technical incompatibilities between national grids, including different frequencies and control systems.¹³

Yet some progress toward greater regional integration is under way. A “super grid” is slowly emerging across the Mediterranean. The Mediterranean Master Plan 2022 outlines several Eastern Mediterranean interconnectors including: the Great Sea Interconnector between Greece, Cyprus, and Israel (1000 MW); the EuroAfrica interconnector to link Cyprus and Egypt (1000 MW), the Green Energy Interconnector (GREGY)  between Greece and Egypt (3000 MW of primarily renewable power); and a number of capacity-expansion proposals such as the ones between Egypt and Jordan (1100 MW), Jordan and Syria (800 MW), Syria and Turkey (600 MW), and Jordan and the Palestinian territories (100 MW).¹⁴

These projects are designed to enhance electrical integration, facilitate renewable energy exchange, and improve security of supply. The Great Sea Interconnector, which is under construction, is expected to be operational by 2030 with a capacity of up to 2 GW, while the GREGY project is expected to be completed by 2031.¹⁵ These developments have been planned for more than a decade. An older proposal, the Mediterranean Electricity Ring, aimed to connect Mediterranean countries via a circle of interconnections to facilitate cross-border power exchange. In the Eastern Mediterranean, this included connecting Egypt, Jordan, Syria, Lebanon, Turkey, and Greece.¹⁶

However, significant challenges remain. Tensions caused by maritime disputes between regional countries such as Greece, Turkey, and Cyprus, the unresolved Cyprus question, and the protracted Israel-Palestinian conflict, all impede the development of cross-border infrastructure.¹⁷

In addition, the geopolitical diversity, uneven political stability, and limited political trust among Eastern Mediterranean countries dampen some national governments’ interest in exploring partial reliance on external electricity. Reasons cited often include the potential for electricity being used as a geopolitical lever, the risk of disruption caused by internal conflict, infrastructure failure, governance breakdown propagating across borders, and concerns about expanding cybersecurity vulnerabilities by exposing national grids to transboundary breaches.

Additionally, many countries maintain vertical monopolies in their electricity sectors—e.g., utilities such as Electricité du Liban (EDL) in Lebanon, Israel Electric Corporation (IEC) in Israel, and, to some extent, various companies in Jordan—which enable them to control generation, transmission, and distribution, thus limiting market competition and cross-border electricity flow.

Technical barriers are equally significant, as systems have evolved separately with different standards and technologies. Alternating-current (AC) interconnections require high degrees of technical compatibility and operational coordination, creating stability risks when disturbances in one location impact other areas of the network. These challenges are compounded by insufficient regulatory frameworks and governance structures needed to support cross-border trading.¹⁸

From pledge to power: Speeding the region’s renewable revolution

Developing renewable energy capacity and establishing physical interconnections form the backbone of regional energy integration, and these efforts need to rapidly scale up due to the urgency of the climate crisis. Global climate commitments and obligations provide a framework for measuring progress and highlight the gap between current trajectories and required outcomes.

Meeting COP28 targets

The commitment at COP28 to triple the world’s installed renewable energy generation capacity by 2030 provides a clear imperative for action in the Eastern Mediterranean. Nations collectively committed to this target as part of the global stocktake of the 2015 Paris Agreement.¹⁹ In addition, 130 nations—including Greece, Cyprus, and Turkey—also joined the Global Renewables and Energy Efficiency Pledge, a voluntary coalition committing to triple their renewable energy capacity and double the rate of energy-efficiency improvement.²⁰ In September 2024, nine northern Mediterranean countries (often known as the MED9) agreed to collaborate on making the region a renewable energy hub, aligning with this global target.²¹

A growing grassroots initiative known as TeraMed is seeking to mobilize Mediterranean countries to triple their renewable energy capacity and reach 1 terawatt in combined generation capacity.²²

As of 2023, Eastern Mediterranean countries had an installed renewable power capacity of 90 GW, accounting for 42 percent of their total electricity generation.²³ To meet the COP28 target, the region must reach 405 GW of capacity by 2030, requiring a steep annual growth of 45 GW. Unsurprisingly, the region is not on track. With the exceptions of Greece and Egypt, all Eastern Mediterranean countries must accelerate their efforts if they are to meet the threefold-increase target.²⁴

In my view, meeting these ambitious renewable targets requires more than simply adding generation capacity. The Eastern Mediterranean needs advanced infrastructure solutions that can both accommodate the tripling of renewable energy and overcome existing grid fragmentation. Smart grid technologies represent the critical connective tissue that will enable this rapid transition.

Smart grid innovation: The digital backbone of renewable integration

To effectively integrate the growing share of renewables and enhance grid stability, the Eastern Mediterranean must leapfrog conventional infrastructure by investing in smart grids. In addition to interconnections, smart grid technologies enable better management of intermittent renewable sources, improve reliability, and reduce losses. These technologies include battery storage, advanced metering infrastructure, dynamic line rating, and other network automation, data management, and analytics technologies for real-time monitoring and control.

Battery storage is particularly crucial for managing the intermittency of renewable energy sources, ensuring grid stability as the share of renewables increases. However, large-scale battery storage projects are still nascent in the Eastern Mediterranean—with the exception of Turkey, which set a target for battery energy storage capacity to reach 7.5 GW by 2035.²⁵

Flexibility mechanisms, including demand response and renewable hydrogen production, further enhance grid stability. Technologies such as electrolysis using solar and wind electricity for hydrogen production are gaining traction. Turkey has plans to develop 5 GW of electrolyzer capacity for green hydrogen production by 2035, and to expand capacity to a staggering 70 GW by 2053.²⁶ Similar applications are being explored in Egypt, which plans to become a transit route for renewable hydrogen.²⁷

Smart meters also help manage the grid better through demand-side management. In the Eastern Mediterranean, Greece is leading on smart meters. It plans to roll out 3.12 million units by 2026, funded by the European Investment Bank, to enhance energy efficiency and support demand response.²⁸

Deploying advanced grid technologies across borders also requires moving beyond identifying technical requirements to addressing the fundamental question of funding this transition. Additionally, this paper argues that the financing challenge is not merely about capital mobilization but also the creation of financial structures that simultaneously enable technological leapfrogging and regional cooperation.

Beyond borders, beyond banks: Innovative financing for regional energy

The transition from technical requirements to financial realities necessitates examining the substantial capital investments needed to realize the Eastern Mediterranean’s energy transformation. While technological solutions provide the roadmap, financing mechanisms will determine the pace and scale of implementation, particularly when the magnitude of required investment exceeds traditional national budgetary capacities.

Quantifying the investment challenge

The Eastern Mediterranean’s energy transition demands significant capital to expand limited renewable energy capacity, modernize aging grids, and develop cross-border interconnections.

Renewable energy projects typically cost around $1 million per megawatt of installed capacity. Their costs are already competitive, and they are the cheapest form of new generation capacity across the region. Moreover, those costs are expected to continue falling and renewables are expected to be the cheapest source of electricity in most countries—including for storage—by 2027.²⁹

However, given the sheer scale of buildup required to meet COP28 commitments, the enormity of the financing required cannot be overstated. If the region is to build 45 GW of renewable energy capacity this year, this would require approximately $45 billion just for generation capacity at current costs, excluding transmission and storage infrastructure.³⁰

Transmission infrastructure is another challenge, especially given how its cost is often borne by grid operators rather than by private developers. The Great Sea Interconnector, for example, is estimated to cost approximately €1.9 billion ($2.08 billion).³¹

By 2030, the region’s total investment needs for sustainable energy transition could well exceed $300 billion. The magnitude of investment required highlights why ordinary national financing approaches are insufficient for the Eastern Mediterranean’s energy transformation. Instead, the region needs to scale finance beyond national resources and to explore financing instruments that mobilize capital at scale and also create structures for regional cooperation, serving as both financial tools and diplomatic instruments in a region where political tensions have historically impeded collaboration.

Financing the energy transition

The Eastern Mediterranean’s sustainable energy future will require mobilizing diverse financing sources and mechanisms. A mix of public and private funding sources—ranging from multilateral lenders and climate funds to innovative partnerships and financial instruments—can bridge the investment gap and accelerate the energy transition.

In developing countries within the Eastern Mediterranean, this challenge is made more difficult by the higher cost of capital, as investors demand high-risk premiums due to country, currency, or sector uncertainty.

This section outlines key financing sources and provides case studies and examples of how each source is being applied (or could be applied) in the Eastern Mediterranean. Each financing mechanism not only brings capital but can also serve as a catalyst for regional cooperation and innovation in energy infrastructure.

1. Multilateral development banks

Multilateral development banks (MDBs) provide a foundational source of capital and risk mitigation for large-scale energy projects in the region. Institutions such as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the Asian Infrastructure Investment Bank (AIIB), and the World Bank offer concessional loans, grants, guarantees, and technical assistance to support renewable energy and grid modernization. For example, the EBRD has invested more than €3.8 billion in renewable energy across emerging markets, supporting 119 projects totaling more than 6 GW of capacity.

In the Eastern Mediterranean, MDB financing often underpins ambitious projects. For example, the EBRD and partners launched a $500-million framework that helped finance sixteen solar plants (750 MW) in Egypt, including in the Benban solar park.

Another notable initiative with a renewable energy component is the Southern and Eastern Mediterranean Sustainable Energy Financing Facility (SEMED SEFF), a joint program of the EBRD, EIB, Agence Française de Développement, and KfW, a German state-owned bank. With a €141.7-million budget, SEMED SEFF catalyzed investments in Jordan and Morocco to cut more than 150,000 tons of carbon dioxide annually and boost renewables (25 percent of its funds went to renewable energy projects).³²

MDBs not only supply affordable long-term loans; they also crowd in other investors. In Egypt’s Benban project, for instance, the EBRD, the International Finance Corporation (IFC), the AIIB, and the African Development Bank (AfDB) cofinanced solar plants alongside private developers, dramatically lowering financing costs and risk.³³ By leveraging MDBs’ preferred creditor status and technical expertise, such involvement signals to markets that projects are bankable.

By providing concessional finance, convening power, and technical and policy assistance, MDBs help Eastern Mediterranean countries undertake projects that might otherwise be too costly or complex, from large wind and solar farms to regional grid interconnectors. Their financing comes with due diligence and policy guidance, encouraging reforms (such as market liberalization or improved procurement frameworks) that improve the overall investment climate. Going forward, scaling up MDB capital—including through their climate-focused funds and guarantees—will be crucial to meet the region’s renewable investment needs at the pace demanded by global climate commitments.

2. Green finance and investment

Green finance refers to capital raised for climate-friendly and sustainable projects through instruments such as green bonds, green loans, and ESG (environmental, social, governance) investments. In the Eastern Mediterranean, green bonds specifically are emerging as an important tool to tap global capital markets for renewable energy and low-carbon infrastructure. The global green bond market has expanded rapidly to more than $2.5 trillion outstanding by 2024.³⁴

Eastern Mediterranean nations have started to issue their own green bonds to fund clean energy, often with strong investor demand. Egypt was an early mover, launching a $750-million sovereign green bond in September 2020.³⁵ Cyprus followed in 2022, issuing a €1-billion green bond. In 2023, Israel and Turkey debuted their first sovereign green bonds, raising $2 billion and $2.5 billion, respectively.³⁶ Greece signaled plans to issue a sovereign green bond as well. While a national issuance expected for 2024 remains pending, the Bank of Greece issued a €500-million green bond in 2020.³⁷

Other private institutions have also issued green bonds, including banks and other businesses such as renewable energy companies. Lebanon’s Fransabank SAL issued its first green bond in 2018, valued at $60 million, with support from the IFC and EBRD. The proceeds were directed to support sustainable finance initiatives. Jordan’s Kuwait Bank followed in 2023 and, in collaboration with the IFC, issued its first green bond, valued at $50 million. The funds were allocated to renewable energy, low-carbon transport, and sustainable water and wastewater projects. ​ Additionally, Arab Bank in Jordan issued a $250-million sustainable bond in October 2023 to support green and sustainable initiatives.³⁸

However, the market remains nascent and fragmented. Strengthening regulatory frameworks, standardizing green taxonomies, and building technical capacity among issuers and investors will be key to unlocking green capital at scale. For instance, Turkey developed its own sustainable finance framework in 2021, while IFC support enabled Egypt to develop green bond guidelines and the Amman Stock Exchange to produce sustainability reporting guidelines.³⁹ The European Union recently introduced the European Green Bond Standard, a voluntary framework to ensure transparency and combat greenwashing, which could serve as a model to harmonize practices in the region.⁴⁰

3. International climate finance

International climate finance refers to dedicated funds and initiatives aimed at supporting climate change mitigation and adaptation in developing countries. For Eastern Mediterranean nations (many of which are middle-income or emerging economies), these funds are an important supplement to domestic resources. Key global climate funds include the Green Climate Fund (GCF), Climate Investment Funds (CIF) such as the Clean Technology Fund, and the Global Environment Facility (GEF). Historically, the Middle East and North Africa (MENA) region has underutilized these funds: MENA has received only about 6.6 percent of cumulative financing from the major global climate funds through 2023.⁴¹

Eastern Mediterranean countries are now working to improve their access to these pools of finance by developing strong project proposals and institutional capacity. Egypt has been notably successful in tapping climate funds, securing about one-third of all GCF resources allocated to MENA as of 2023. About 85 percent of Egypt’s GCF funding has been in the form of loans. Jordan has also received international climate finance, accounting for roughly 10 percent of GCF funding in MENA (with around half in loans). Meanwhile, Turkey has benefited from World Bank funding via the Türkiye Green Fund (TGF), receiving a $155-million loan for the greening of firms through equity financing, while Lebanon has benefited from GEF grants, receiving about 8 percent of GEF’s MENA allocations.⁴² These funds often work by blending with multilateral bank financing or by de-risking projects to attract private investors (through instruments like guarantees and concessional tranches).

4. Islamic finance

Islamic finance is a growing source of funding for the energy transition and is particularly relevant in the Muslim-majority countries of the Eastern Mediterranean. Islamic finance follows sharia principles, such as prohibition of interest, and typically uses profit-sharing or asset-backed structures.⁴³ Green sukuk (sharia-compliant bonds earmarked for environmental projects) have emerged as a key instrument to raise capital for renewables while tapping into Islamic investor pools. The global sukuk market has seen strong growth and greening in recent years. The first half of 2024 set a record, with $9.9 billion in green and sustainability sukuk issuances, indicating accelerating interest.⁴⁴

While most green sukuk so far have originated in Southeast Asia and the Gulf, Eastern Mediterranean nations are starting to consider them.⁴⁵ Egypt, for example, has been considering sukuk as a financing tool. It passed a Sovereign Sukuk Law in 2021 and could issue green sukuk to fund projects under its renewable energy and sustainable transport plans.⁴⁶

Importantly, major finance institutions are steering toward climate action. In 2021, Emlak Katılım issued the first green sukuk in Turkey with a total value of 51.8 million Turkish lira.⁴⁷ The Islamic Development Bank (IsDB) has also issued sukuk to raise funds for green projects. For example, in 2024 it issued a $2-billion benchmark sukuk earmarked partly for green development programs.⁴⁸

Beyond sukuk, Islamic finance can support renewable energy through Islamic banks and funds investing in project equity or providing sharia-compliant loans (such as profit-sharing and loss-sharing musharakah (a joint-venture structure) or lease-based Ijarah financing). Islamic finance also opens opportunities for waqf (endowment funds) or zakat (charitable contributions) to be structured for community-level clean energy access or climate resilience projects, although such models are still in experimental stages.

5. Bilateral investment

Financing and development support from one country to another plays a pivotal role in the Eastern Mediterranean’s energy landscape. Bilateral investment often comes either directly from foreign governments (through aid, export credits, or state-owned banks) or via government-backed companies and sovereign wealth funds pursuing projects abroad. In the push for renewables, several powerful bilateral actors have emerged: notably the Gulf states (such as the United Arab Emirates (UAE) and Saudi Arabia) and China. They view renewable energy projects not only as commercial opportunities but also as avenues to strengthen strategic ties and influence in the region.

The UAE and Saudi Arabia have invested significantly in Egypt’s renewable energy projects, using investors such as ACWA Power, Masdar, and AMEA Power to fund new wind and solar capacity.⁴⁹ For example, Masdar has partnered with Egyptian firms to develop a gigantic 10-GW onshore wind farm, one of the world’s largest, which it announced on the sidelines of COP27.⁵⁰

China is increasingly becoming a major bilateral financier in Eastern Mediterranean energy. Chinese state-owned enterprises and funds have targeted renewable energy acquisitions and projects, especially in economies where financing gaps exist. In Egypt, Chinese banks and companies have supported the Benban solar complex; for example, the AIIB provided $210 million in debt financing for eleven solar plants (totaling 490 MW) in Benban’s second phase.⁵¹ Chinese firms have also supplied solar panels and construction for many Benban projects. China also has energy investments in Turkey, Lebanon, and Greece. China’s Silk Road Fund has acquired a 49-percent stake in ACWA Power’s renewable energy portfolio.⁵² These investment patterns are part of the increasing “greening” of China’s Belt and Road Initiative (BRI) and reflect China’s willingness to invest in lower-income Eastern Mediterranean nations, though these investments often serve dual purposes of commercial returns and strategic positioning.⁵³

The European Union (EU) and its member states also act bilaterally through programs like the EU-funded Neighbourhood Investment Platform, which gives grants to complement loans for energy projects in the Mediterranean neighborhood.⁵⁴ Europe often emphasizes grid interconnections and market integration (e.g., funding studies for a EuroAfrica interconnector between Egypt and Greece), Gulf countries favor high-profile generation projects, and China is active across the value chain from generation to transmission.

Bilateral investments bring substantial capital and can fast-track projects, but they also entail geopolitical balancing as recipient countries in the Eastern Mediterranean navigate offers from multiple suitors. When managed well, bilateral financing can complement multilateral efforts. It also can foster regional cooperation. For instance, the UAE not only invests in Arab neighbors but has discussed energy deals involving Israel (such as solar facilities in Jordan exporting power to Israel as part of a desalinated water and solar energy swap between Israel and Jordan).⁵⁵

6. Debt financing

Debt financing (i.e., borrowing funds to be repaid with interest) is one of the predominant ways to fund energy infrastructure, including renewable projects, worldwide. In the Eastern Mediterranean, debt financing takes multiple forms: loans from commercial banks or international institutions, bonds issued in capital markets, export credits or supplier credits for equipment, and concessional and blended debt.

Given that debt is cheaper than equity, developers typically seek debt to cover most of the project costs. For investors and lenders, renewable energy projects can be attractive debt opportunities because they generally generate steady cash flows once operational.

Finance for regional cooperation

A comprehensive financing strategy leveraging all of the above mechanisms is crucial for the Eastern Mediterranean to realize its energy transition ambitions. Multilateral and climate funds provide scale and patient capital, green and Islamic finance tap new investor pools, and bilateral investments bring in strategic funding.

Additionally, financing structures such as project finance, public-private partnerships, power purchase agreements, and blended finance can help reduce risk. Green investment banks can help mobilize funding for green projects, while innovative tools like fintech and results-based financing fill niche gaps.

In my view, the region’s success in meeting COP28 goals hinges less on the availability of technology and more on the ability to align financial incentives across borders.

By structuring these financing approaches with regional cooperation as their foundation, these instruments create shared financial interests across borders, incentivizing collaboration and helping overcome entrenched political obstacles. Financial mechanisms explicitly requiring cross-border participation serve as powerful diplomatic tools in addition to their capital mobilization function.

For instance, multilateral investment funds that mandate co-investment from multiple Eastern Mediterranean countries establish joint ownership stakes in critical infrastructure, creating a financial incentive to maintain peaceful relations. Similarly, blended finance structures offering preferential terms for projects with cross-border components make cooperation economically advantageous compared to purely national approaches. For example, a Mediterranean renewable energy fund requiring participation from Greece, Turkey, and Cyprus could provide a neutral financial platform in which shared economic benefits supersede maritime disputes.

The strategic design of these mechanisms must include governance frameworks that span national boundaries, with representation requirements ensuring all stakeholders have meaningful input in investment decisions. Interconnection-specific project bonds co-issued by multiple countries can create shared liability structures in which default risks are mutually borne, fostering accountability across traditional divides.

When properly implemented, these tools can transform abstract diplomatic goals into concrete economic incentives. Countries with historical tensions can begin to view their neighbors not as competitors but as essential partners in accessing capital markets and achieving energy security. Countries that once viewed energy resources as potential flashpoints for conflict can instead develop economic interdependencies that make continued cooperation the most rational choice.

Shared foundations: Creating a regional energy community

While innovative financing mechanisms provide the tools for transformation, their successful implementation depends on creating supportive physical, institutional, and diplomatic frameworks. The mobilization of capital through green bonds, MDB funding, climate finance, and other financial instruments discussed above is necessary but insufficient on its own to achieve regional energy integration.

Having participated in several regional energy dialogues, I have observed that trust between regulators remains limited. Finance can be the tool that enables cooperation in more sensitive policy areas. Yet it must be paired with robust infrastructure development, harmonized regulatory environments, diplomatic initiatives that overcome historical tensions, and coordinated governance structures that span national boundaries. The implementation of regional energy integration requires establishing concrete structures for collaboration that can transform the Eastern Mediterranean’s abundant renewable resources into a shared, resilient energy architecture that benefits all participating nations. These efforts must include

• physical infrastructure development and grid integration;
• interconnected energy markets and regulatory alignment on grid codes, tariff structures, and cross-border trading;
• regional cooperation and diplomatic engagement; and
• regional governance frameworks.

Scaling cross-border initiatives for a connected grid

Cross-border energy cooperation in the Eastern Mediterranean is advancing through several key initiatives aimed at integrating renewable energy sources and enhancing grid connectivity. There are nine interconnection projects and proposals at different stages of development across the region. If implemented fully, they can help create a more unified energy market capable of efficiently distributing energy across the Mediterranean while addressing the intermittency challenges of solar and wind.

The Great Sea Interconnection, set to link Cyprus, Greece, and Israel, is perhaps the region’s flagship project and will facilitate the trade of renewable electricity across borders. Similarly, Egypt and Greece are exploring the GREGY interconnection. Beyond the Eastern Mediterranean, Italy and Tunisia are advancing the ELMED interconnection between them, which is expected to be operational by 2027.⁵⁶ Technologies already exist to manage some of the perceived risks of interconnections. Using high-voltage direct current (HVDC) transmission lines offer greater controllability and can be isolated more easily than traditional AC interconnections. Interconnections can also be directed to non-critical loads or areas in order to reduce risk to cross-border disruptions, while robust cybersecurity standards and protocols can help protect critical infrastructure.

Harmonizing regulations for seamless market operation

Achieving a fully integrated energy market in the Eastern Mediterranean requires harmonized regulations to ensure fair access to grids, promote investment, and reduce the cost of risk capital. Countries involved in interconnection projects need to have the regulatory framework in place to allow for successful entry of foreign electricity into domestic electricity markets and successful export of their electricity to foreign markets. This is especially difficult for countries in which electricity utilities hold vertical monopolies in all sectors of the economy. Turkey, Cyprus, Greece, and Egypt have unbundled or are on the way to unbundling their electricity markets; meanwhile, Jordan, Lebanon, and, to a lesser extent, Israel have electricity utilities that hold vertical monopolies and are responsible for generating and supplying electricity to all sectors in the economy.⁵⁷

The EU’s internal energy market policies are a model for regulatory convergence, emphasizing transmission ownership unbundling between electricity generation or supply companies and transmutation ones, consumer rights, and the role of regulatory actors such as the Agency for the Cooperation of Energy Regulators (ACER).⁵⁸ The EU’s Electricity Directive 2019/944 mandates nondiscriminatory access to transmission and distribution systems, a principle that could be adapted for the Eastern Mediterranean to attract private investment.⁵⁹

However, this EU model cannot be fully replicated in the Eastern Mediterranean due to different system maturity levels. The Association of Mediterranean Energy Regulators (MEDREG), comprising twenty-seven energy regulators from twenty-two countries, recommends that regulatory frameworks must be tailored to specific subregional contexts, and that Eastern Mediterranean countries need to develop more regulatory solutions independent from those of the EU.⁶⁰

Progress in regulatory harmonization could also increase infrastructure investments significantly in the Eastern Mediterranean. However, this progress is slow due to the region’s diverse regulatory environments, with countries such as Syria, Lebanon, Turkey, and Egypt maintaining state-controlled energy sectors, while others like Greece and Cyprus align with EU directives to liberalize the energy market. Overcoming these disparities will require sustained dialogue, capacity building, and incentives for alignment.

Energy diplomacy: Transforming geopolitical challenges into opportunities

Geopolitical tensions are another major barrier to cooperation in the Eastern Mediterranean. Political and security dynamics significantly influence energy cooperation in the region. Long-standing disputes—such as those between Greece, Turkey, and Cyprus over maritime boundaries, the Syrian civil war, the unresolved Cyprus question, the recently intensified Israeli-Palestinian conflict, and the Israel-Lebanon conflict—have all historically hindered regional collaboration and the development of cross-border infrastructure, particularly affecting projects like the EastMed Gas Pipeline.⁶¹ Overcoming these challenges will require financial resources as well as diplomatic engagement and innovative governance structures.

However, the shift toward renewable energy and the EU’s focus on a green energy economy present new opportunities for cooperation. Initiatives such as the East Mediterranean Gas Forum (EMGF)—established in 2019 as a platform focused on natural gas development, it includes Egypt, Greece, Cyprus, Israel, Jordan, and the Palestinian territories, along with France and Italy—can be both reformed to become more inclusive of all Eastern Mediterranean counties and expanded beyond natural gas to include renewable energy, power infrastructure, and advancing electricity interconnection and trading.⁶² Some energy policy experts have advocated for renaming the EMGF as the East Mediterranean Energy Forum (EMEF) to reflect this broader mandate.⁶³ Such a forum should include a regulatory platform, in which each country is represented by its national regulatory authority or electricity governing body, to jointly promote greater harmonization of regional energy markets and legislation.

Energy cooperation is increasingly recognized as a tool for regional stability and economic integration. The development of renewable energy projects and interconnectors can create shared economic interests, reducing the potential for conflict.⁶⁴ This approach transforms energy from a source of competition to a platform for collaboration, potentially easing long-standing tensions through mutual economic benefits and shared climate goals.

An increased shift toward renewable energy sources not only ensures long-term sustainability and economic benefits for the region, but also has higher potential than gas diplomacy. Unlike natural gas and other tradable commodities, renewable energy systems are an undisputed resource. Additionally, collaboration on renewable energy projects through interconnections provides synergies between partnering countries due to the benefits they provide to both grids.

Shared horizon: Finance and diplomacy for a unified Eastern Mediterranean energy landscape

The Eastern Mediterranean stands at the cusp of a transformative energy transition in which innovative financing can simultaneously advance technological leapfrogging, economic development, and regional cooperation. By strategically structuring investment mechanisms that require collaboration, the region can convert financial transactions into diplomatic bridges.

Financial innovation offers three distinct diplomatic dividends beyond its direct economic benefits.

First, joint financing creates structured engagement opportunities that maintain dialogue even during political tensions. When countries coinvest in renewable infrastructure through mechanisms such as regional green bonds or mixed-ownership projects, they establish technical and financial communication channels that persist through diplomatic fluctuations. These ongoing interactions build relationships among technical experts and financial officials that can later facilitate broader cooperation.

Second, shared financial liabilities transform political calculus by creating mutual dependencies. When neighboring countries with historical tensions become co-guarantors of infrastructure loans or joint issuers of project bonds, they develop a tangible economic interest in maintaining stable relations. The economic costs of diplomatic ruptures become quantifiable and immediately visible to stakeholders on all sides.

Third, financial innovation creates positive-sum narratives in a region often characterized by zero-sum competition. By enabling countries to collectively tap into previously inaccessible capital pools—such as global ESG funds seeking large-scale sustainable investments—regional financial mechanisms demonstrate that cooperation delivers benefits unattainable through individual action.

If the Eastern Mediterranean realizes this vision of financially driven integration, it could emerge as a global model for how innovative capital structures can overcome entrenched geopolitical challenges. The region’s abundant renewable resources, which have the potential to generate more electricity than its projected future demand, provide the natural foundation, while innovative financing creates the institutional architecture for a sustainable energy future that transcends historical divisions and creates shared prosperity across borders.

The path forward requires financial creativity, diplomatic persistence, and technical expertise—but the potential rewards extend far beyond renewable kilowatts to include a fundamental reconfiguration of regional relationships built on shared economic interests rather than historical grievances.

The Atlantic Council would like to extend special thanks to Limak Holding for its valuable support for this report.

Karim Elgendy
Executive Director,
Carboun Institute;
Associate Fellow,
Chatham House

Karim Elgendy is an expert on energy transition and climate policy in the Middle East and North Africa. His research examines the intersection of climate diplomacy, energy geopolitics, and sustainable development across the region. Elgendy investigates how countries navigate energy transitions and climate change impacts within shifting geopolitical landscapes, and analyzes how regional and global power dynamics influence climate action and policy implementation. He possesses deep expertise in energy and climate policies across the Eastern Mediterranean and Gulf Cooperation Council states, with particular focus on renewable energy, climate resilience, and diplomacy.

Elgendy has authored numerous articles and policy publications in leading journals and platforms. He has presented at over one hundred public speaking engagements and has delivered guest lectures at several prestigious universities. His expert analysis is regularly featured in broadcast, print, and digital media outlets, and he has appeared in most mainstream media outlets.

The Atlantic Council in Turkey aims to promote and strengthen transatlantic engagement with the region by providing a high-level forum and pursuing programming to address the most important issues on energy, economics, security, and defense.

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The post Great sea connections: Financing the Eastern Mediterranean’s energy transition appeared first on Atlantic Council.

The gap between actual and needed global investment in renewable energy is projected to grow to tens of trillions of dollars over the next ten to thirty years while the costs of climate change continue to compound. Public finance alone—via governments, multilateral development banks, and international financial institutions—is insufficient to meet the challenge. To bridge this widening investment gap and attract private investors that will have to provide most of the funding, what’s needed is a combination of innovative financial tools that are tailored to local contexts and mitigate risk, enhance creditworthiness, and attract private capital at high leverage rates. Guarantees are especially important because of their reputation for their efficacy and effectiveness in mitigating real and perceived risks of projects, which enhances project creditworthiness and often attracts investment from the private sector.

This paper provides a comprehensive overview of investment gaps in the renewable energy industry at the global level as well as in EMDEs to achieve the global net-zero targets and discusses the risks and obstacles facing private investors in the renewable energy industry. It also reviews various de-risking, risk-reduction, and risk-transfer financial mechanisms that could boost private investment in clean energy infrastructure and nature-based solutions projects centered around a discussion of a guarantee proposal called the Emerging Market Climate Investment Compact (EMCIC). The EMCIC is a proposal for a guarantee facility funded primarily by wealthy governments that would provide guarantees to major global investors to mobilize $100 to $500 billion in private investment in climate mitigation investments, namely clean energy infrastructure and nature-based solutions, in EMDEs over ten years. The structure of the facility would be simplified so that qualified investors would assemble portfolios that would be broadly guaranteed (against most political and commercial risks), would do their own due diligence subject to standards set by the EMCIC, and would generally not require recipient country guarantees.

Finally, the paper includes case studies on clean energy investment in Brazil and South Africa—and country-specific mechanisms available for scaling up this investment.

Amin Mohseni-Cheraghlou was the macroeconomist with the GeoEconomics Center (2021-2024) and a Senior Lecturer of Economics at the American University in Washington, DC. 

Frank Willey is a program assistant at the Atlantic Council Global Energy Center. 

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This shake-up has important implications for global energy security, which has come into sharp focus since the full-scale Russian invasion of Ukraine. Considering the Trump administration’s renewed focus on an “energy dominance” agenda, including an emphasis on furthering US oil and gas production and exports, one should not overlook the equally important geopolitical aspects of the electricity sector. Increasingly relevant to global affairs, the electricity sector has experienced rapid global demand growth of 4 percent per year—often placing new energy systems at the heart of geopolitics.  

As the world enters an “age of electricity,” decisions made during this second Trump administration will have far-reaching consequences impacting the future of international conflict, competition, and cooperation around the world. 

Security, growth, and innovation

A dominant geopolitical feature impacting the electricity landscape is Russia’s military aggression against Ukraine, which has sharpened the confrontation between the West and a coalition of authoritarian states that have in various ways supported Russia’s war effort, including China, Iran, and North Korea. The conflict has illustrated and heightened the priority of electricity security, as the executive director of the International Energy Agency (IEA) recently emphasized to European Union (EU) leaders. The EU, with major help from US liquefied natural gas (LNG) exports, reduced its dependence on Russian gas for electricity, ramped up renewable energy to 47 percent of total generation, began to replace Russian nuclear fuels with Western sources, and disconnected the Baltic states from the Russian power grid.  

Meanwhile, outside of the EU, the rest of the world saw record levels of electricity demand growth in 2024, especially in Asia, with China accounting for about half of the increase. Although the International Monetary Fund (IMF) forecasts slower world economic growth given the impact of uncertainty given ongoing trade pressure from Trump’s tariff strategy, the IEA still projects substantial electricity growth over the next three years.  

Partly fueling this expected rise in demand is the explosion of digital information, along with the artificial intelligence (AI) systems to analyze this data. This trend is revolutionizing the electricity sector and creating growing demands for reliable, flexible, secure, and resilient electricity supplies for data centers and in other key civilian and military spheres. More complex and interconnected national and regional electricity grids are growing in almost all regions of the world. But these large digital systems are increasingly vulnerable to cyberattacks, especially from malign actors such as China and its Volt, Flax, and Salt Typhoon threat teams. Electricity security is therefore a vital component to national security in this new age. 

This growing demand has set off a race to innovate and deploy new energy technologies. One critical strategic area is the development of advanced nuclear power systems, with designs under development to meet needs for electricity, industrial heat, desalination, military systems, district heating, data centers, hydrogen production, and shipping. There has been a resurgence of interest in nuclear power around the world—at COP28, leading countries pledged a tripling of nuclear power by 2050 from 2020 levels.  

Competition for electricity markets 

Against this complex backdrop, the Trump administration’s expanded use of tariffs has added new dimensions to global economic competition that is affecting relationships both allies and opponents alike. These measures have also introduced added strain on already fragile electricity supply chains, including those of power transformers, switchgear, and meters. This added pressure for the West and Western-aligned countries gives China, the world’s largest exporter of electric power equipment and electronics, an opportunity to expand further its global market presence, especially in emerging markets and developing economies (EMDEs). EMDEs generate about two thirds of the world’s power and are projected to account for 85 percent of global electricity growth over the next three years.  

Moreover, over the past decade as the costs of solar and wind have dropped, EMDEs have pursued a transition to renewable energy. Although renewables supplied only 26 percent of EMDE generation in 2023, they now provide over 75 percent of new EMDE generation capacity outside of China. China’s dominance in renewables gives it significant market—and geopolitical—influence. Global installed solar photovoltaic (PV) capacity increased by 30 percent in 2024, and Chinese companies are poised to continue flooding the market with solar PV systems and components. 

EMDE natural gas demand for power, which can complement intermittent renewables and improve grid reliability, and for industry is also growing. This creates space in EMDE electricity markets for a growing US role. As the world’s largest LNG exporter, the United States is looking to increase export capacity and access markets in India, Southeast Asia, and other EMDEs. Some countries may commit to increasing US LNG imports in their trade negotiations with the Trump administration to address trade imbalances and reduce tariffs. In 2024, US volumes went to 20 EMDEs and represented about 30 percent of total US LNG exports.  

In the past five or so years, the United States has made significant progress in the development of advanced nuclear power systems, some of which are now beginning construction. This has placed the United States in a strong position to compete for new nuclear contracts in EMDEs, particularly to build small and micro reactors. These systems offer the prospect of lower total capital costs, faster construction times, and more appropriate sizes for the smaller grids in many of these countries than large 1000-MW reactors. Russia has dominated the international new-build market with Rosatom constructing  large VVER 1000/1200 reactors in India, Bangladesh, Egypt, Turkey, Iran, and China and beginning a small modular reactor (SMR) project in Uzbekistan. China has the largest number of reactors under construction (30 domestically) and is working to expand exports of its Hualong I large reactor beyond the completed units in Pakistan as well as developing several types of SMR systems. South Korean, European, and Canadian companies are also eyeing foreign markets and nuclear supply chains for new reactors are linking companies from these regions.   

Recognizing the critical role nuclear can play in meeting US electricity demand growth, the Trump administration, with bipartisan cooperation, is supporting advanced reactor development and demonstration as well as domestic uranium mining, enrichment, and fuel production efforts. Trump recently signed an executive order targeting an increase in US nuclear capacity from 100 to 400 gigawatts by 2050. Domestic growth in the sector would enable the administration to export both large AP-1000s and SMRs, with at least a dozen projects and cooperation in the works not only in advanced economies, like the United Kingdom, Canada, Poland, Romania, Bulgaria, but also with EMDEs like Ukraine, India, Ghana, Kenya, the Philippines, Indonesia, and Vietnam. Interest in SMRs is at play in most of these countries and US companies could achieve of a sizeable share of the IEA’s projected SMR global market of 120 GW by 2050.  

National security and global engagement 

Given its broad-based excellence in the electricity sector and emerging digital and AI technologies, the United States is well positioned to engage with allies on the adoption of technologies that advance grid reliability, flexibility, and resilience. US involvement in these growing overseas markets, valued at over $2 trillion annually, is vital to its commercial, technological, and national security interests and to restoring trust and confidence in the United States as a reliable partner.  

In this effort, the United States should leverage its strengths as the largest producer of both natural gas and nuclear power to help other countries build out firm, baseload, and peaking power, helping reduce dependence on Chinese solar and battery systems in an age of electricity. But US investment both at home and abroad in renewables, energy efficiency, carbon capture, hydrogen, and other technologies is also critical to US influence in the world.  

As the Trump administration reconfigures US foreign policy, it is important to forge a new partnership with industry to enhance US energy leadership and coordinate deployment of key diplomatic and economic tools—including technology and commercial agreements, policy and regulatory assistance, capital allocation, and trade and investment promotion—in a package that can be tailored to the energy needs of individual countries. In addition to bilateral efforts, successful US global leadership will require close cooperation with allies in supporting sound multilateral financial and technology cooperation mechanisms, Western-oriented regional electricity markets, and secure supply chains. 

The age of electricity is coming. Will the United States step up and recognize that being a global leader in this sector is critical to its national security?  

Robert F. Ichord Jr. is a nonresident senior fellow at the Atlantic Council Global Energy Center. 

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Robert F. Ichord, Jr.

Nonresident Senior Fellow

Global Energy Center

Nuclear Energy Energy Transitions

Issue Brief Mar 21, 2025

To win the AI race, the US needs an all-of-the-above energy strategy

By Joseph Webster

To ensure US AI leadership, the United States must harness all forms of energy, allow a level playing field, and remove red tape constraining the buildout of critical enablers, especially transmission lines and grid enhancing technologies.

Artificial Intelligence China

EnergySource May 21, 2025

Replace the Inflation Reduction Act with FUEL-AI

By Joseph Webster

To compete in the global AI race, the United States must dramatically expand its power supply. Replacing the Inflation Reduction Act with the FUEL-AI Act would reorient energy policy toward national security, fast-tracking domestic energy production and infrastructure to power America’s AI future.

Energy & Environment Energy Transitions

EnergySource May 5, 2025

Make critical mineral spending matter this time  

By Ashley Zumwalt-Forbes

The United States has a crucial opportunity to translate large-scale funding into critical mineral stockpiling and resilient supply chains—but only if Congress structures spending to create durable markets. Without clear demand signals, real commercial offtakes, and price stability, proposed funding risks falling short of delivering on its potential.

Energy & Environment Energy Markets & Governance

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post US global leadership in the age of electricity appeared first on Atlantic Council.

The US Strategic Petroleum Reserve (SPR) of crude oil is well-stocked, expanding policymakers’ optionality in the crisis in the Middle East.

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After accounting for fifty-two-week averages of imports and exports, as well as current inventory levels, the SPR’s net import cover is historically high, holding 23.8 weeks’ worth compared to the 17.1-week average since 2009. Over 107 million barrels from the SPR could be released without falling below post-2009 historical levels of net import cover. Fatih Birol, Executive Director of the International Energy Agency (IEA), issued a statement noting there are over 1.2 billion barrels of emergency oil stocks in the IEA oil security system.   

The United States’ SPR has shifted since the early 2010s, when it held nearly 730 million barrels, covering roughly 11.5 weeks of crude net import demand, at fifty-two-week averages. With rising US oil production and exports, the SPR’s net import cover gradually increased over the early and mid-2010s. 

As the United States rapidly became a major crude oil exporter, inventory management strategy shifted. Congressionally mandated sales from the SPR occurred from 2017 through the first days of the COVID-19 pandemic, as the barrels in inventory declined from around 695 million barrels at the beginning of 2017 to around 635 million barrels in April 2020. Inventories were further reduced between 2022 and 2023, as the United States and its allies worked to combat Russia’s full-scale invasion in Ukraine and its effects on energy markets. Since mid-2023, the United States began slowly restocking the SPR and inventories currently stand at over 402 million barrels.  

While SPR inventories are near their lowest absolute levels in over three decades, the stockpile is very well-placed to meet its mission, which is to “reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program.” That’s because while the SPR’s crude oil inventory levels have fallen, US imports needs have receded, even as US exports have surged. Accordingly, US net crude oil imports stand at just over two million barrels per day, down sharply from ten million barrels per day in 2007, or eight million barrels per day in 2017.  

The rise in US crude exports and the drop in net imports have bolstered US oil security. However, challenges remain. US refineries are optimized for specific crude grades, many of which still need to be imported. Shifting light, sweet crude exports to domestic use could, for example, disrupt refineries optimized for heavier, more sulfuric crude grades. 

Despite these limitations, SPR inventories are at elevated levels, allowing the United States to cover about 23.8 weeks of demand. Net crude oil import cover is sharply higher than before the shale boom, or even immediately before the COVID-19 pandemic.    

Finally, US crude oil production and consumption are projected to remain stable in 2025 and 2026. Technological improvements and—critically—the removal of energy infrastructure bottlenecks are supporting domestic crude production. The recently inaugurated Matterhorn Express natural gas pipeline, which runs west-to-east across Texas, has removed a key takeaway constraint from the Permian basin, improving US oil production fundamentals and sending domestic output higher. The EIA’s latest forecast holds crude oil net imports will remain flat or decline modestly, enabling the United States to draw down inventories even further while still maintaining net import coverage.  

The United States’ strategic petroleum reserves and substantial domestic oil production leave it well-positioned to weather a crisis in the Middle East, barring major, prolonged outages to Gulf oil production. 

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report.  

Landon Derentz is senior director and Morningstar Chair for Global Energy Security at the Atlantic Council’s Global Energy Center. He previously served as director for energy at the White House National Security Council and director for Middle Eastern and African affairs at the US Department of Energy.

This article reflects their own personal opinions.  

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Joseph Webster

Senior Fellow, Global Energy Center

Global Energy Center Indo-Pacific Security Initiative

Central Asia China

Staff

Landon Derentz

Senior Director

Global Energy Center

Energy & Environment Middle East

EnergySource May 13, 2025

Four energy deals Trump will look to make on his Middle East trip 

By Ellen Wald

President Trump’s upcoming trip to the Middle East will focus on advancing energy and commercial agreements, including securing Gulf investments in US manufacturing, increasing US LNG imports, deepening nuclear cooperation with Saudi Arabia, and locking in oil production commitments. These efforts are ultimately aimed at advancing broader geopolitical objectives—countering Russian influence and strengthening US energy dominance.

Energy & Environment Energy Markets & Governance

EnergySource May 21, 2025

Replace the Inflation Reduction Act with FUEL-AI

By Joseph Webster

To compete in the global AI race, the United States must dramatically expand its power supply. Replacing the Inflation Reduction Act with the FUEL-AI Act would reorient energy policy toward national security, fast-tracking domestic energy production and infrastructure to power America’s AI future.

Energy & Environment Energy Transitions

EnergySource May 5, 2025

Make critical mineral spending matter this time  

By Ashley Zumwalt-Forbes

The United States has a crucial opportunity to translate large-scale funding into critical mineral stockpiling and resilient supply chains—but only if Congress structures spending to create durable markets. Without clear demand signals, real commercial offtakes, and price stability, proposed funding risks falling short of delivering on its potential.

Energy & Environment Energy Markets & Governance

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post The strategic reserve and the Israel-Iran conflict appeared first on Atlantic Council.

China has built a commanding monopoly over rare earths, the seventeen metallic elements that are crucial for modern technologies spanning from energy to defense. Through decades of strategic state intervention, China now controls over half of global mining production and 90 percent of separation and refining capacity.

This dominance has been enabled by a comprehensive, whole-of-government approach that includes the Communist Party, the state apparatus, the military complex, industry, and research institutions. These entities work together to implement a broad range of policies that ensure global control, such as price controls, tax policy, environmental regulations, standards setting, foreign policy, defense strategy, industry planning, and research and development. These labyrinthine policy- and market-making processes add layers of complexity to the already opaque inner workings of the Chinese state.

This report by Craig Hart demystifies these interconnected systems by:

• outlining China’s strategic objectives
• identifying the key rare earths stakeholders in government and industry
• unraveling the complex web of policies that enable its global market dominance
• exploring potential opportunities for the West to develop a counterstrategy to develop its own rare earths supply chains

Explore interactive graphics mapping China’s key rare earths stakeholders, system of direct and indirect subsidies, and the role of Belt and Road investments.

Craig A. Hart was a nonresident senior fellow with the Atlantic Council’s Global Energy Center. He is a lecturer at Johns Hopkins University.

Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Mapping China’s strategy for rare earths dominance appeared first on Atlantic Council.

It’s causing a big reaction. On Wednesday, World Bank President Ajay Banga announced that the development bank’s board has lifted its longstanding ban on funding nuclear energy projects. The decision could surge funding for the emissions-free power plants in developing countries, and it comes amid a broader shift in attitudes toward atomic energy around the world. Below, the Atlantic Council’s top nuclear energy policy experts get to the core of the matter.

• Jennifer Gordon: Director of the Nuclear Energy Policy Initiative and the Daniel B. Poneman chair for nuclear energy policy at the Atlantic Council’s Global Energy Center.
• Lauren Hughes: Deputy director of the Nuclear Energy Policy Initiative.

The decision

• “This is not the bank’s first foray into nuclear power as a means of promoting sustainable economic growth and shared prosperity,” says Lauren. In 1959, the bank issued a forty-million-dollar loan to help finance construction of Italy’s first nuclear reactor. 
• The 2011 Fukushima Daiichi accident contributed to the World Bank enacting a de facto ban on funding for nuclear power, Lauren explains. This ban was then reiterated in 2013, when the bank said that “safety of nuclear facilities and non-proliferation are not in the [World Bank Group’s] areas of expertise.” 
• This week’s reversal “follows a number of other similar decisions on nuclear energy,” Jennifer tells us, including the Declaration to Triple Nuclear Energy that more than twenty countries signed in December 2023, as well as recent decisions by the European Investment Bank, Germany, and Canada to boost nuclear power. Taken together, these decisions “indicate that nuclear is coming back into favor and being recognized for its ability to provide reliable baseload power.” 

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The impact

• “Many emerging-market countries are interested in developing nuclear energy projects that could be prohibitively difficult to realize without financing,” Lauren explains, noting that upfront costs to build a power plant can run into the billions of dollars  
• Lauren calls the bank’s decision a “pragmatic approach toward nuclear energy,” which recognizes “that the demand for reliable, affordable, clean energy will only increase in the coming decades” as populations grow in Sub-Saharan Africa, India, and Southeast Asia.  

The frontier

• For the United States, the World Bank’s move “may indicate an eagerness to engage with the Trump administration on policy issues that the administration has indicated are at the top of its agenda,” Jennifer says. In late May, for example, the White House unveiled new executive orders on deploying advanced reactor technologies. 
• Lauren adds that World Bank financing could help the United States “be more competitive against state-backed financing offers, especially from Russia and China.” By extension, the World Bank could reinforce the efforts of agencies such as the Export-Import Bank of the United States, the US International Development Finance Corporation, and the US Trade and Development Agency that are involved in nuclear projects in developing countries, she notes.
• For Jennifer, the bank overturning its ban should be “viewed as the next frontier in unlocking funding to support new nuclear builds and leveling the playing field with Russia and China.” However, she adds, it’s “not the final frontier, because it could send a signal to other international financial institutions that they should follow suit and also support nuclear projects.” 

Global Energy Forum

June 17-18, 2025

The 9th Atlantic Council Global Energy Forum will take place in Washington, DC under the theme Collaboration, Competition, and Security: A new era of leadership shaping the future of the global energy system.

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The post Why the World Bank just gave nuclear power a surprising boost appeared first on Atlantic Council.

In the informal or artisanal and small-scale mining (ASM) sector, women’s participation is estimated at up to 50 percent. But despite their contributions, women across the region are subjected to discrimination—which results in fewer socioeconomic and professional opportunities—in addition to sexual and gender-based violence.

Today, the increasing demand for critical minerals has led global powers, including the United States, to consider critical-mineral deals globally in order to create stronger and more sustainable supply chains. African countries thus have a newfound opportunity to prioritize their development goals—but they first must address the discrimination and violence against women taking place across the industry.

For African countries to empower their women miners, they must tailor formalization pathways of women ASM miners and support grassroots organizations as operational partners, while deploying policies aimed at addressing gender biases in the industry and on a macro scale.

The reality for women miners

In the ASM sector, where working conditions are unsafe, women face gender-based discrimination and physical harm. Women miners are ninety times more at risk of death than their male counterparts, according to the World Bank. Women miners also face sexual violence, which is especially prevalent in conflict areas: For example, amid the ongoing conflict between Congolese armed forces and Rwanda-backed M23 rebels, women (both miners and not) reported 895 rapes in the last two weeks of February 2025, averaging sixty reports per day.

In the ASM sector and in large-scale mining (LSM), women have also been allocated fewer technical jobs in addition to unequal access to mining rights, tools, and financial resources, all diminishing their ability to achieve financial growth. Their restricted economic mobility often confines them to ancillary services such as preparing food and cleaning mineral ore. But regardless of the roles they take, women miners often receive lower wages than men for the same labor. Discrimination also results in women miners taking on a disproportionate burden of labor overall, as many are responsible for housework in addition to mining activities.

Legal infrastructures also reinforce discrimination against women miners: For example, the DRC’s Mining Code stipulates that pregnant women are not allowed to work in mining. Similarly, sections 55 and 56 of Nigeria’s 2004 Labor Act prohibit women from working in industrial undertakings, including mining, during nighttime hours and from doing any manual labor underground. These unequal legal measures can push more women to informal mining practices, making them more vulnerable to physical and gender-based harm.

Tapping the opportunity

African countries, for their development and economic growth, must address the challenges women in both ASM and LSM face, with policies that are tailored to the needs of local mining communities.

African countries must offer easily navigable pathways for ASM miners to formalize—and such pathways must be customized for local contexts. Formalization is particularly complex in regions with conflict and legal pluralism. There are frameworks available to guide African governments in this endeavor. For example, a nongovernmental organization called Pact has publicly put forth the model it uses to engage communities in formalization, tailoring the approach to the needs of local artisanal miners. Such a model includes stakeholder engagement and educational training for miners, in addition to support with securing licenses and land access and with addressing human rights and safety concerns.

African governments should also support local grassroots organizations in operationalizing these efforts to improve the well-being of women miners and their economic prospects. In the ASM sector in particular, these organizations are integral to reaching women miners, especially in spaces where governments lack reach. For example, Tanzania’s Women Miners Association economically empowers women miners through initiatives that organize savings and credit cooperative societies and support women as they work to acquire mining licenses and market access. An organization called IMPACT leads initiatives for women-led mining businesses to improve women miners’ safety and foster inclusion in global supply chains. IMPACT supported the building of at least fifty village savings and loans associations in the DRC and Burkina Faso, involving nearly three thousand women and men who saved more than $176,000.

In addressing women’s challenges in the mining sector—both ASM and LSM—more broadly, African governments must also deploy policies that are gender inclusive and women-centric in order to alleviate the gendered struggles of women in the mining sector. There are already positive examples of such policies on the African continent, some being South Africa’s programs to improve women’s participation in the LSM sector. In addition, the Rwanda Mines, Petroleum, and Gas Board implemented a gender strategy to improve awareness about the role of women in mining and to boost capacity building. Governments should also encourage women’s participation in mining governance.

Leveraging partnerships

Safeguarding and empowering women is essential for upholding human rights and fostering inclusive sustainable growth. While ensuring peace and stability, African countries need to leverage partnerships to advance their development goals.

As countries move forward on critical-minerals deals, they must do so ensuring that there will be mutual economic gains from such agreements. For example, the DRC must leverage its potential mineral deal—in which the United States would provide security against the Rwanda-backed M23 rebel attacks in exchange for access to DRC’s critical minerals—for community development. While signing any deal, governments should foster multistakeholder partnerships with grassroots organizations that can help reach women miners and advance development goals in Africa’s booming mining sector, for an inclusive and equitable future for all.

Neeraja Kulkarni is a researcher, writer, and development practitioner with experience in decarbonization, community resilience, and international development. The views expressed in this article are her own.

The post Empower women miners now for a just future in Africa appeared first on Atlantic Council.

The post Donovan cited in Newsweek on EC proposal to lower price cap on Russian oil appeared first on Atlantic Council.

The Arabian Sea and Indian Ocean (ASIO) megaregion occupies a pivotal position in the global energy landscape, both as a key transit route and as home to some of the greatest energy suppliers and consumers worldwide. This sprawling region encompasses the Gulf Cooperation Council (GCC) states, South Asia and the Association of Southeast Asian Nations (ASEAN), as well as East Africa and, further afield, Australia.

Energy cooperation within ASIO is a linchpin of economic and geopolitical stability. The GCC, with vast hydrocarbon reserves and increasing investments in renewable energy, serves as a cornerstone of energy supply for South and Southeast Asia. At the same time, the ASIO region’s energy relationships transcend supply and demand dynamics. Decarbonizing energy systems, securing critical trade routes, and addressing energy poverty all imply a growing degree of regional and interregional strategic collaboration.

The energy landscape of the ASIO region is also a key component of broader, global geopolitical and strategic change. Critical maritime chokepoints link energy trade routes with regional and international security considerations. Global powers including China and the United States actively shape the region’s energy and political dynamics, creating both opportunities for collaboration and risks of competition.

With heightened concerns about Chinese ambitions, and with a less dependable and more protectionist US partner, many ASIO countries are in a mood to balance. Geopolitical change and the need for energy are driving deeper cooperation within the bloc and prompting outreach to second-tier powers.

This publication explores the energy relationships that define the ASIO region, focusing on three key interregional dynamics: GCC-South Asia, GCC-Southeast Asia, and South Asia-Southeast Asia. It also examines the broader regional issues shared by all ASIO countries, as well as the roles of East Africa and Australia within this vast energy ecosystem. The memo also situates this discussion within the context of broader global partnerships, particularly with the United States and Western allies.

Fellow

Phillip Cornell

Nonresident Senior Fellow

Global Energy Center

Energy & Environment Energy Markets & Governance

Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Energy strategy across the Arabian Sea and Indian Ocean appeared first on Atlantic Council.

The importance of an effective US industrial strategy is growing amid rapid technological change, rising energy demand, and geopolitical uncertainty. In response, policymakers are focused on how US industry can stay competitive in an era of electrification, digitalization, and AI, as well as global conflict.

Key industrial sectors like steel, aluminum, cement, and chemicals must meet rising global demand for low-emissions products while countering unfair trade practices, especially from countries like China that use state support and low environmental standards to undercut competitors. Durable US competitiveness will depend on supportive policies and transparent markets that reward higher environmental and labor standards.

The question for US policymakers is not whether to compete, but how. Industrial policy is a bipartisan priority, even if strategies differ, and a national security imperative. Given its fiscal constraints, the United States must find ways to ensure its industries thrive globally while avoiding new spending.

Over the past year, the Atlantic Council engaged dozens of industrial stakeholders from private, public, and nonprofit sectors to assess how the United States can lead in sustainable industrial development. The consensus: although no specific outcome is assured, the country is well-positioned to lead if it acts decisively. This study concludes with near-term recommendations to overcome barriers and lay the foundation for a revitalized, competitive, and sustainable US industrial strategy.

David Goldwyn is the chair of the Atlantic Council’s Energy Advisory Group and a nonresident senior fellow with the Council’s Global Energy Center.

Andrea Clabough is a nonresident fellow with the Atlantic Council Global Energy Center and an associate at Goldwyn Global Strategies, LLC.

Global Energy Forum

The ninth Atlantic Council Global Energy Forum will be held June 17 and 18 in Washington, DC. Please check back regularly for updates on our programming.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Building for tomorrow: Preparing US industry to compete in a lower-carbon global economy appeared first on Atlantic Council.

The fact that cheap, low-end systems could wreak havoc on advanced military forces is indeed fear inducing—and unfortunately, that risk extends beyond jets parked on an airfield apron.

The electrical grid has been described as “the world’s largest machine.” In terms of defending it, a better mental model is that of a very complex supply chain. Electrons are produced from molecules pulled from the ground, atomic reactions, or the movement of wind, water, or sun. Those electrons are transported through a vast network of wires to their ultimate end use.

Notably, that end use—whether light, warm or cold air, artificial intelligence inference, or a Netflix movie—is all that matters. The electrons in an intermediate form or location are useless to a human being, so disruptions anywhere along the supply chain are functionally equivalent.

Attacking energy infrastructure has long been recognized as a useful combat tactic because those electrons are a precursor to many legitimate military end uses. Attacking electric power can also terrorize civilian populations, best evidenced in Ukraine by thousands of Russian attacks against the grid by high-end cruise missiles and guided weapons.

The number of global actors with access to cruise missiles is, thankfully, limited. But that does not reduce the risk to the grid. Being able to disrupt end use anywhere along the electron supply chain is a boon to the asymmetric attacker, who can find plenty of choke points along that chain. They can look for targets with the greatest impact at the lowest cost in time, resources, and risk.

To combat these threats, discussion of asymmetric risk vectors has increasingly focused on cybersecurity vulnerabilities. Recent revelations that the global supply chain for solar power inverters has been compromised by Chinese manufacturers is another reminder of the sector’s cyber vulnerabilities. The North American Electric Reliability Company (NERC), through its Critical Infrastructure Protection (CIP) program strives to address these risks through compliance activity, and players in the electric power ecosystem have invested heavily in software and processes to defend against cyberattacks.

Beyond cyber, attention is often focused on physical risk to the generation end of the electron supply chain. Certainly, it is easy to envision both attacking and defending a large, fixed piece of infrastructure like a power plant from an asymmetric attacker’s drones. The same applies to substation infrastructure. But what if one were to push the imagination a little further?

Electric utilities across the United States must constantly deal with outages from technical challenges, weather, animals, and even mylar balloons, which have disrupted utility services for years.

Listings on Amazon and Alibaba show that approximately 10,000 mylar balloons could be filled and released for less than $15,000 (with 95 percent of that being the cost of helium). Given that electric transmission and distribution infrastructure is in fixed, known locations—often highly visible and open to the air—it is acutely vulnerable to aerial attack.

Such an attack wouldn’t require smuggling drones and explosives, clandestinely attaching them to trucks in an action worthy of a Hollywood spy thriller—it would just require waiting for a delivery from the attacker’s e-commerce provider of choice. Think less of a spy thriller, and more of a dark remake of Up.

Infrastructure risk is increasing on two fronts—from the diffusion of high-end digital technology and from an evolving understanding that high-end energy systems can be threatened by cheap and low-tech weapons, or weaponized commercial products.

To counteract this threat landscape, policymakers are trying to support infrastructure owners and operators in protecting the grid. In addition to NERC CIP measures for infrastructure security, there is legislation pending that would hold states to the same federal standard as interstate transmission infrastructure, or elevate the US Department of Energy’s leader responsible for emergency response to a Senate-confirmed position.

This is not a call to action to ban mylar balloons—though some states are trying. Instead, infrastructure stakeholders must realize that the threat environment is broadening at both the high and low ends of the spectrum. After watching videos of burning Russian bombers, the sinking feeling that society is more vulnerable today than it was yesterday extends far beyond the military domain.

Travis Nels is a Veterans Advanced Energy fellow with the Atlantic Council’s Global Energy Center and the vice president of planning, analytics, technology, and transformation at AES Corporation in Arlington, Virginia. The views and ideas expressed in this article are his own.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Fellow

Travis Nels

Veterans Advanced Energy Fellow

Global Energy Center

Energy & Environment Security & Defense

EnergySource May 21, 2025

Replace the Inflation Reduction Act with FUEL-AI

By Joseph Webster

To compete in the global AI race, the United States must dramatically expand its power supply. Replacing the Inflation Reduction Act with the FUEL-AI Act would reorient energy policy toward national security, fast-tracking domestic energy production and infrastructure to power America’s AI future.

Energy & Environment Energy Transitions

EnergySource May 13, 2025

Four energy deals Trump will look to make on his Middle East trip 

By Ellen Wald

President Trump’s upcoming trip to the Middle East will focus on advancing energy and commercial agreements, including securing Gulf investments in US manufacturing, increasing US LNG imports, deepening nuclear cooperation with Saudi Arabia, and locking in oil production commitments. These efforts are ultimately aimed at advancing broader geopolitical objectives—countering Russian influence and strengthening US energy dominance.

Energy & Environment Energy Markets & Governance

New Atlanticist Apr 17, 2025

How the National Energy Dominance Council can set the US on the path to energy security

By Ellen Wald

The National Energy Dominance Council must act quickly to restore stability to the energy industry amid geopolitical uncertainty.

Energy & Environment Energy Markets & Governance

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Complex energy systems face low-tech threats appeared first on Atlantic Council.

The post Donovan quoted in China Daily on potential US reactions to proposed EC sanctions on Russia appeared first on Atlantic Council.

This brief, the inaugural of the series, by William Yancey Brown highlights the vast energy and mineral potential of the Atlantic Ocean and how African nations bordering the basin can manage resources responsibly and fairly. It launches against a backdrop that includes World Ocean Day, the 2025 UN Ocean Conference, and the continuing work of the Group of Twenty (under South Africa’s presidency) within the Oceans 20 engagement group.

The Atlantic Ocean is of paramount importance to Africa. The African nations on the ocean’s shore represent 46 percent of the continent’s population, 55 percent of its gross domestic product, and 57 percent its trade. The blue economy is crucial for Africa as the continent’s economies see new changes brought upon by issues related to the maritime energy transition, the port revolution, maritime transport, fishing, and control over exclusive economic zones. African countries have accordingly developed frameworks, through the African Union, for action in the region and declared 2015-2025 the “Decade of Africa’s Seas and Oceans.”

Introduction

The world’s second-largest ocean—the Atlantic, bordering more than thirty nations—is rich with energy and minerals, as well as the marine life and human livelihoods that development impacts. The Atlantic has a well-established oil and gas industry and a rapidly growing offshore wind sector. In addition, nascent sources of energy and minerals exist at the water’s surface (tides, currents, and waves), just below in the temperature differences between ocean layers, and on the seafloor. There are windfarms and oil and gas infrastructure off the coasts of Europe and North America—but the challenge now is how to tap the African Atlantic’s energy potential responsibly and fairly.

Though renewables are the clear best route to reducing greenhouse gases, it can be expected that African nations will continue to develop their offshore oil and gas resources. At the same time, however, wind farming could usefully be tried in some areas along Africa’s Atlantic coast—and to expand the range of renewables available, venture capitalists should also look closely at the potential projects in the works to harness the energy of waves, currents, and the ocean’s thermal energy. Funders, international organizations, and African nations along the Atlantic have several policy options to explore the ocean’s resources in a sustainable way. On the question of mining critical minerals from the deep sea, however, much more research on the seabed environment—and availability of alternative terrestrial sources—is needed.

Nascent ocean energy and mineral resources

The Atlantic Ocean provides a place for energy production facilities that could be located on land or sea, in addition to energy sources derived from the ocean itself. These placements include the world’s first floating nuclear facility and solar power plants offshore of the Netherlands.¹ So far, mainland Africa has neither of these, although a floating solar power plant is planned for the Seychelles.² Ocean locations present a harsh environment for devices and accessibility, and environmental restoration is difficult if accidents occur. On the other hand, ocean placement offers space and distance from human settlements.

Tides and currents. Moving river water made up about 15 percent of global electricity generation in 2023.³Hydropower makes up more than half of electricity generated in the Democratic Republic of Congo, Brazil, and Norway.⁴ The Atlantic Ocean has its own standing currents and tidal flows, such as the Gulf Stream and the Atlantic Meridional Overturning Circulation, and powerful tides in locations on both coasts of the basin.

Small-scale generating facilities powered by non-tidal, standing ocean currents have been tested in locations including the Gulf Stream offshore of the United States and the Kuroshio Current offshore of Japan, but no commercial-scale facility is operating anywhere yet.⁵ The greatest potential for non-tidal current power in the African Atlantic is reportedly offshore of South Africa, or perhaps of Guinea-Bissau and Morocco.⁶

A 240-megawatt (MW) tidal power plant has operated on the Atlantic coast of France since 1966.⁷ Africa has some much smaller Atlantic tidal plants, but no commercial-scale tidal power generating facilities are operating there and prospects for tidal facilities offshore of Africa’s Atlantic coast are weak.⁸ Cost is a principal impediment. Environmental impacts are also a concern, but the same is true for well-developed hydropower on land. Despite tepid progress to date for tidal power, new projects are on the books in Europe.⁹

Waves. Waves offer great potential power for electricity on Atlantic coasts. Wave action on the US Atlantic coast could reportedly provide average power generation of about 18 gigawatts (GW).¹⁰ Wave and tidal current energy could potentially meet up to 20 percent of the United Kingdom’s current electricity demand.¹¹ Atlantic Africa has energetic waves in the south offshore of South Africa and, to a lesser extent, Namibia. Senegal, Cabo Verde, and Morocco in the north also have high wave potential.¹²

Many wave energy test projects have been completed or proposed for the Atlantic in the United States, United Kingdom, and Europe.¹³ However, only one small wave energy facility offshore of northern Portugal currently provides electricity to the grid.¹⁴ Another small grid-linked project off a pier is set to begin operations in 2025 in Los Angeles.¹⁵ As for tides and currents, the challenge and cost of maintaining wave energy facilities remains an impediment to significant deployment.

Ocean thermal energy conversion. Tropical seas, including in the Atlantic, have surface waters much warmer than the deep sea. This difference allows devices to circulate water and power turbines through ocean thermal energy conversion (OTEC).¹⁶ “Open” versions of the technology can also desalinate seawater. OTEC could theoretically provide about 8 terawatts (TW) of power globally, more than the current global electricity demand.¹⁷ However, OTEC has a long history of experimentation without yet providing a commercial operating source of power to the grid.¹⁸ This might change with a small 1.5-MW project scheduled to be installed in 2025 offshore of São Tomé and Príncipe.¹⁹ There is also potential for floating OTEC along the west coast of continental Africa, with the highest potential reportedly from Guinea to Gabon.²⁰

Methane hydrates. Methane hydrates are ice-like solids in which water traps methane. They occur on ocean continental margins, including offshore of the Americas and Africa, and hold vast amounts of carbon and energy.²¹ Combined with this promise is the peril of releasing methane from any mining, including through submarine landslides. Japan has taken a special interest in methane hydrates and has conducted experimental projects successfully extracting methane gas.²² No such projects have yet been undertaken in the Atlantic Ocean.

Developed ocean energy and mineral resources

Oil and gas. Under its Stated Policies Scenario (STEPS), the International Energy Agency (IEA) estimates that global oil supply will decrease about 7 percent by 2050 and natural gas production will increase by about 4 percent.²³ Offshore production currently comprises roughly 30 percent of global oil supply and 28 percent of global natural gas production.²⁴ Large historical Atlantic-linked sources include the Gulf of Mexico and the North Sea.

Rystad Energy estimates that, in Africa, about 3.5 million barrels of oil equivalent per day (boepd) of new deepwater oil and gas supply will be near final decision or under construction by 2035. Nigeria is the historic hub of West African offshore oil production and expects to raise production from 2 million barrels per day (bpd) to 3 million bpd with an anti-theft initiative.²⁵ The Baleine Field offshore of Cote d’Ivoire and Namibia’s offshore Orange Basin recently began production, and exploration is under way or planned offshore of São Tomé & Principe, Liberia, and Sierra Leone, among other countries.²⁶ Natural gas production began in January 2025 offshore of Senegal and Mauritania and is expected to produce around 2.3 million tons of liquified natural gas (LNG) annually for more than twenty years.²⁷ Brazil’s state-owned oil company Petrobras predicts a ramping up of current offshore production to 3.2 million barrels per day (equivalent; including natural gas) in the next five years, with oil production centered on its “pre-salt” basins.²⁸ Guyana’s Stabroek Block expects to produce 1.3 million bpd of oil by 2027 and holds an estimated 11.6 billion barrels of recoverable oil and significant natural gas.²⁹

Wind energy. Offshore wind energy farms globally provided an estimated 75 GW installed operating capacity as of 2023, about 7.5 percent of the roughly 1,000 GW total installed global wind energy that year.³⁰ Europe and the United Kingdom have historically led offshore wind development, but China is now leading deployment.³¹

Atlantic Ocean wind farms are currently operating offshore of the United Kingdom, Europe, and the northeastern and mid-Atlantic coast of the United States, with additional farms planned.³² Three commercial offshore wind farms are now operating in the United States, with other US Atlantic projects under construction.³³ The US Atlantic projects are driven by coastal state governments that have established targets for renewable energy. However, supply chain issues and costs have led to the cancellation of some proposed projects. Development is also weighed down by the shift from the strong support of the Biden administration to adversity from the Trump administration.³⁴

No wind farms are currently operating offshore of South America or Africa. Planning is under way but in early stages for Brazil, Morocco, and South Africa. Africa has good winds for turbines on the Atlantic coast in the south and northwest.³⁵ Locations on either side of the Cape of Good Hope are being considered in South Africa, with a specific project proposed to the east in Richards Bay.³⁶

Critical minerals in the Atlantic

Critical minerals are generally defined by national laws as minerals that are essential for important industries and vulnerable to supply chain disruption.³⁷

Most critical minerals, including rare earths, are more scarce than rare in terms of the amounts present in geologic features found at many locations around the globe. However, their actual mining and production are constrained, with China producing most critical minerals and Africa a key place for mining. For example, 74 percent of the world’s cobalt is mined in the Democratic Republic of Congo (DRC), under conditions that are both unsafe and undependable.³⁸ Dependable access to critical minerals without overreliance on China is a priority for many Western industries. The United States was a leader in the past but, despite such high interest in critical minerals, global prices for key metals and material fell by about 26 percent in 2023, including a 47-percent decline in cobalt and a 32-percent decline in lithium carbonate.³⁹

Whether these minerals should be mined from the deep seabed beyond national jurisdiction, in addition to land mining, is hotly debated under international law (see below). Polymetallic nodules (PMNs) in the Clarion-Clipperton Zone in the Pacific Ocean, where these nodules are abundant, receive the most attention from industry, governments, and nongovernmental organizations. The International Seabed Authority (ISA) has designated Atlantic Ocean exploration areas for polymetallic sulfides (PMSs) along the mid-Atlantic Ridge and for cobalt-rich ferromanganese crusts (FMCs) in the South Atlantic.⁴⁰ Little information is publicly available about potentially recoverable amounts and no exploitation has been authorized, but research on the biological communities that could be impacted raises great concerns for environmental impacts.⁴¹ The Trump administration stepped outside of the ISA in April 2025 with an executive order promoting seabed mining both on the high seas and the US continental shelf.⁴² Encouraged by the order, Canada’s The Metals Company has announced that it will apply for permission to mine high-seas PMNs under a US statute,⁴³ despite protests from the ISA,⁴⁴ and another company, California-based Impossible Metals, has applied to mine PMNs in the US territory of American Samoa.⁴⁵ The Department of Interior announced on May 20 that it was launching the process for a lease sale there based on that application.⁴⁶

The environmental framework

The ocean energy sources described above are primarily regulated by the nations to which they are adjacent, either because the resources are located in sedimentary geologic formations of the continental shelf (as in the case of oil) or because proximity to onshore populations facilitates construction and operations and lessens the cost of transmitting electricity (as in the case of wind). Critical mineral exploration and mining are primarily regulated on the continental shelves of nations under national laws and on the high seas by the ISA, which was established under the United Nations Convention on Law of the Sea (UNCLOS).⁴⁷The United States also has a dated statute for high seas mining, applicable to anyone under US jurisdiction.⁴⁸

National laws for ocean energy and mineral development vary, and this short paper cannot document their details. But consider US laws for reference. The facilities involved require authorization from the Bureau of Ocean Energy Management (BOEM) under the Outer Continental Shelf Lands Act (OCSLA).⁴⁹ Authorization begins with leasing, followed by approval of development plans, with environmental review under the National Environmental Policy Act (NEPA).⁵⁰ NEPA is a procedural statute without ultimate environmental standards. The approvals include conditions, most designed to mitigate environmental impacts, whose authorities come from other US environmental laws. A large offshore wind farm might have one hundred conditions. OCSLA includes standards to minimize environmental harm, but environmental review is given sharper teeth through the Endangered Species Act (ESA) and the Marine Mammal Protection Act (MMPA), which have firm impact tests.⁵¹ Noise is a significant concern, and is regulated as “harassment” under the ESA and MMPA. OCSLA also requires lessees to decommission facilities at their expense once a lease ends. All of these regulatory actions are subject to judicial review and many rulings have affected requirements. That said, oil, gas, and wind energy projects have gotten through the approval process and are operating in the United States.

European nations with Atlantic coasts (and the EU itself), South American nations, and some African nations have legal frameworks for environmental review with environmental assessment procedures akin to those of NEPA in the United States. Most lack hard stops such as the ESA and MMPA. Article 6(4) of the EU Habitat Directive approaches these stops, requiring that certain actions with negative environmental impacts can proceed only if carried out for “imperative reasons of overriding public interest” and with compensatory measures.⁵² The International Offshore Petroleum Environmental Regulators (IOPER) provides a venue for cooperation on oil and gas environmental regulation in the Atlantic and elsewhere but does not currently include any African nation agency.⁵³

The ISA has issued final rules for deep seabed prospecting and exploration in the area beyond national jurisdiction and draft rules for exploitation.⁵⁴ Both rules prohibit activities in the international area that would cause “serious harm” and define this to be any effect from activities on the marine environment that represents a “significant adverse change in the marine environment.” Both final and draft regulations also require a “precautionary approach.”⁵⁵

Marine protected areas (MPAs) are another key environmental safeguard. Some have already been designated in the Atlantic in the exclusive economic zones (EEZs) of coastal nations.⁵⁶ MPAs provide environmental protection that complements mitigation measures for activities in areas that are being developed.⁵⁷

All of these environmental policies rest on the foundational need to address climate change. The Atlantic Ocean is an important sink for carbon dioxide through direct absorption and sequestration by sea life. It is also the object of impacts such as sea level rise, higher temperatures, acidification, and potential disruption of the major currents.

Policy recommendations

Each ocean energy and mineral resource described above sits within a framework of cost competitiveness, scale, required environmental protection, and governance stability.

Recommendation: Waves, currents, and OETC

Waves, currents, and OETC have potentially great scale. In theory, each could meet large shares of Atlantic Ocean coastal electricity demand. However, none of the three has gone viral, constrained by the costs and challenges of operations and maintenance. All three nevertheless warrant continued investment in projects and research.

• Venture capital firms concerned with energy and relevant government agencies should consider funding new projects for wave, current, and OETC technologies, with a particular view for projects supplying power to island populations of Atlantic southern African nations.

Recommendation: Methane hydrates

Methane hydrates also have potentially great scale but are challenged by the risk of accidental releases in development, production of greenhouse gases, local environmental impacts, and the abundance of natural gas from alternative current sources.

• Japan has led work investigating methane hydrates on its continental shelf. It should continue these efforts and seek collaborative research partnerships with other nations.

Recommendations: Oil and gas

Oil and gas production sits in a maelstrom of analysis and often angry commentary. Science allows no sound doubt that Earth’s surface is warming because of anthropogenic fossil fuel emissions. Furthermore, it is apparent that governmental policies to date have not solved the problem. Performance has taken a back seat to aspiration. Post-combustion technologies such as engineered or natural sequestration by biota, direct removal from the air, and atmospheric additives such as aerosols are only partial solutions.

Fair play is another consideration for oil and gas offshore of West Africa and Guyana. The economies of wealthier nations historically benefited from fossil fuels. Many less wealthy nations, including those in Africa, missed out and are seeking funding to address climate impacts. They do not want to be told not to develop their own offshore oil and gas resources—particularly as production continues in wealthy countries such as the United States, United Kingdom, and Norway—and wealthy nations are unlikely to provide funding anywhere near the levels developing nations request. African nations can be expected to move forward with developing their major Atlantic offshore reserves, as they are now doing in conjunction with major companies. Better use of fossil fuels, such as prevention of methane leakage and priority for natural gas over coal or oil for electricity will help address climate impacts. However, the single best available avenue for reducing greenhouse gas emissions appears to be replacing fossil fuels with renewable energy, including solar, wind, and nuclear facilities on land in addition to renewable ocean energy.

Potential conflict and corruption are also obvious challenges hitchhiking on the road to wealth from offshore oil and gas resources for West Africa and Guyana. Unless both can be dealt with effectively, fair play in wealth allocation will be a mirage. Where US companies are involved, it does not help that the current administration has said it would not enforce the US Foreign Corrupt Practices Act or consider the social cost of carbon in decision-making as previous administrations did.

Atlantic African nations should:

• In cooperation with other agencies and institutions, prioritize renewable and nuclear energy development to mitigate climate change by replacing fossil fuels.
• Include a quantified measure of the social cost of carbon in regulatory decision-making.
• Maintain transparent and independently audited programs for government revenue collection and expenditure, including sovereign wealth funds, and explicitly require multinational firms subject to US jurisdiction to comply with the Foreign Corrupt Practices Act.
• Work with other Atlantic nations to establish and maintain what could be known as a “Pan-Atlantic Blue Ring” of coastal, island, and marine conservation areas, building on existing conservation areas, with a dual purpose of climate reliance and biodiversity conservation for its own sake.

Recommendation: Offshore wind

Offshore wind is not a pipeline for sovereign wealth, but it can mitigate greenhouse gas emissions by replacing fossil fuels. It can be cost competitive with other energy sources in some locations and has scale—in the neighborhood of 1–2 GW capacity for larger projects in the United States. Its status going forward in the United States is uncertain given the critical stance of the current administration, preexisting complications in regulatory approvals, supply chain problems, and possible overenthusiasm on finances. Some US Atlantic projects are operating or close to that and are likely to provide planned electricity over the twenty-five- to thirty-year terms of their leases. Some other leases without approved project plans might ultimately culminate in operating projects. In the long term, offshore wind is an experiment with a reasonable probability of a good result. Nations other than the United States are more supportive, such as the EU nations and China. Atlantic coastal Africa has the wind needed in the south and northwest and could usefully try it out. Whether leases will be renewed at the end of their first life is a question. Investors have generally presumed they will be, but the answer will be informed by the costs of competing energy sources, including solar and nuclear facilities on land.

• Atlantic African nations in the south and northwest with good winds should establish potential lease areas for wind farms through a public review process that examines needs for economic viability, full-scale review of environmental impacts, and deconflicting of impediments generally. Public auctions for leases should be held once potential lease areas are established, to confirm whether companies have an appetite for projects. If they do, projects should be advanced.

Recommendations: Critical minerals

Critical minerals are a proper priority for nations whose industries and national securities depend on them. The United States and others are concerned that China dominates production. However, addressing this calls for a scalpel, not a hammer. Each mineral has its own value, sources, potential replacements, recyclability, and location in the marketplace. The price for some, such as cobalt, has fallen in the past two years.⁵⁸ Furthermore, the economics and environmental impact of deep seabed mining should be compared with mining on land. Terrestrial mining can decimate mining sites and areas along the roads to them. But the ecology of terrestrial areas can be reasonably well described and impacts from mining mitigated. Also, restoration after project completion is much easier where people can walk and breathe and vehicles can drive. Recent research indicates that even larger species in the deep sea are mostly not yet described.⁵⁹ Furthermore, restoration is either conceptually impossible (if the material removed is habitat) or technically infeasible. Fundamentally, the environmental standard for mining under the high seas is to prevent serious harm. No experienced and objective environmental regulator could conclude that the standard is met by the technologies currently available.⁶⁰

• Before supporting approval of any deep sea critical mineral mining on the high seas or in their offshore national jurisdictions, Atlantic nations should advance research on the deep seabed environment, including species and ecology, and on the availability of terrestrial sources.

Additional recommendations: Artificial intelligence

Finally, many companies and researchers working on generative artificial intelligence (AI) believe that artificial general intelligence (AGI) that matches highly skilled human intelligence will be available in the next several years. Generative AI agents already exist that perform tasks as though they were humans, and they get better every day. Robots are also in the works. These advances in generative AI will touch everything in human society, including sustainable energy and mineral production in the Atlantic Ocean basin.⁶¹ AGI will likely be able to perform much analysis and procedure, improving the speed, and possibly the accuracy, of reviews. Despite model biases, generative AGI might offer the potential for less biased or corrupt decisions when it comes to selecting operators or siting energy projects.

Just as important, however, the people who now earn a living doing things related to sustainable energy and minerals will need help if AGI agents do the work in the future. The sooner these efforts start, the better.

• The larger companies with leading generative AI models should continue to provide or initiate support for institutions in Atlantic Africa for training and access to the best models they are making available.⁶²
• Community leaders in African towns and villages likely to be affected by Atlantic energy and mineral development should form stakeholder teams to engage with developers. The teams should include at least one individual with access to a leading AI large language model (LLM) and experience in prompting it so that the model itself can participate in discussions about community benefit from development and potential harm to employment from AI.

Issue Brief Apr 24, 2025

The Millennium Challenge Corporation could prove essential in the race for critical minerals. Reform it, don’t shut it down.

By Aubrey Hruby

As the Trump administration aligns foreign aid with core strategic interests, the MCC represents an underutilized asset.

Energy & Environment Politics & Diplomacy

Report Sep 23, 2024

How protecting intellectual property rights in African music, film, and fashion can create opportunity and wealth

By Eric Guichard

The creative industry has the potential to transform the African continent through economic growth and narrative change. As the demand for African innovations continues to increase, so will the need for the protection of creators.  

Africa Economy & Business

Report Sep 23, 2024

Lessons for African mineral producers from the Indonesian experience

By Julien Marcilly and Bradford Simmons

Indonesia and its success with resource nationalism can serve as an example for many mineral-rich African countries.

Africa Energy & Environment

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

Learn more

The post Marine energy: Harnessing the power of the Atlantic appeared first on Atlantic Council.

WASHINGTON, DC – JUNE 10, 2025 – The Atlantic Council’s flagship Global Energy Forum will convene in Washington, DC, on June 17–18, bringing together top energy and policy leaders at a critical moment for global energy strategy. Now in its ninth year, the Forum will feature senior government officials — including US Secretary of Energy Chris Wright and United Arab Emirates’ Minister of Industry and Advanced Technology, Dr. Sultan Ahmed Al Jaber — alongside industry executives, thought leaders, and investors. 

This landmark gathering will tackle issues shaping the global energy agenda, focusing on energy security and economic competitiveness, while examining the longer-term geopolitical impacts of a rapidly evolving energy landscape. 

“We continue to see energy at the center of global geopolitics—touching everything from national security to next-generation industries and economic resilience,” said Frederick Kempe, president and CEO of the Atlantic Council. “By bringing the Global Energy Forum to our nation’s capital for the first time, we are establishing a premier platform where policymakers, industry leaders, and investors can build partnerships that strengthen energy security and drive economic growth for years to come.” 

The 2025 Global Energy Forum will feature keynote addresses, fireside chats, expert panels, and interactive breakout sessions, addressing the full spectrum of today’s energy challenges and opportunities. Topics will include harnessing artificial intelligence to optimize energy systems, financing and fast-tracking critical infrastructure, navigating new industrial policies, and positioning manufacturing and technology leaders for an era of energy abundance. 

Confirmed speakers include: 

• Chris Wright, secretary, US Department of Energy 

• Dr. Sultan Al Jaber, minister of industry and advanced technology, United Arab Emirates; managing director and group chief executive officer, ADNOC; executive chairman, XRG; Chairman, Masdar 

• Senator John Hickenlooper, US Senator (D-CO) 

• Michael Faulkender, deputy secretary, US Department of the Treasury 

• Helima Croft, managing director and global head of commodity strategy, RBC Capital Markets 

• Landon Derentz, senior director and Morningstar chair for global energy security, Atlantic Council Global Energy Center 

• Chris Lehane, chief global affairs officer, OpenAI 

• Tania Ortiz Mena, president, Sempra Infrastructure 

To register as a participant at the Atlantic Council Global Energy Forum and to view all confirmed speakers and the agenda, please visit here. 

The Atlantic Council Global Energy Forum will be on the record and open to covering media. Media wishing to attend in person should reach out to Emily Hopkins at ehopkins@atlanticcouncil.org to request accreditation. Media wishing to participate virtually through the event livestream should visit here. No code is needed for virtual registration. 

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The roots of scarcity

Turkmenistan’s vulnerability to water stress is the highest in Central Asia, a precarious position resulting from a complex interplay of factors. Much of the country’s water infrastructure is a relic of the Soviet Union, including open canals and irrigation ditches that are tragically inefficient. Estimates suggest that anywhere between 30 percent and 60 percent of the water transported through these systems is lost to evaporation or seeps into the sandy soil before reaching its intended destination. These physical conditions are compounded by systemic mismanagement. A cohesive national strategy for water conservation and distribution remains elusive, hampered by a lack of coordination among governing bodies.

This inefficiency is particularly damaging given the demands placed upon the water supply, primarily by agriculture, which consumes an estimated 94 percent of the nation’s water resources. The heart of the problem lies in the legacy of Soviet-era planning: industrial production dedicated to cotton, a thirsty crop ill-suited to Turkmenistan’s naturally arid climate. This reliance on water-intensive agriculture depletes precious reserves. A shift toward drought-resistant crops, modern techniques such as drip irrigation, and greater agricultural diversification is long overdue to alleviate the immense pressure on the water supply.

Compounding these internal challenges are external pressures. Turkmenistan relies on the Amu Darya river, which flows along its border with Afghanistan and Uzbekistan, for roughly 90 percent of its water. The construction of Afghanistan’s Qosh Tepa Canal upstream represents a significant new threat. By diverting substantial amounts of water from the Amu Darya for its own agricultural ambitions, the canal project could reduce the flow reaching Turkmenistan, further straining an already stressed system. The absence of robust transboundary water-sharing agreements and effective diplomatic channels risks tensions, highlighting the urgent need for dialogue, potentially facilitated by neutral international mediators, to navigate this issue peacefully.

Overlaying all these factors is the undeniable impact of climate change. Projections indicate that temperatures in Turkmenistan are set to rise faster than the global average, inevitably leading to more frequent and severe droughts, further diminishing already scarce water resources and pushing the nation closer to the brink.

The human and environmental toll

The consequences of this escalating water scarcity are already being felt across Turkmenistan. Food insecurity is on the rise, with reports indicating that 12 percent of the population faces severe challenges in accessing sufficient food—among the highest rate among former Soviet nations. Access to safe drinking water is also becoming increasingly precarious. Residents across the country, including in the capital city of Ashgabat, report frequent water cuts and shortages. The tap water that is available is often of questionable quality, forcing many to rely on more expensive bottled water.

Reduced water flow and dying vegetation leave the soil vulnerable to erosion, intensifying the dust, sand, and salt storms that plague the region. In the northern Dashoguz province, vast tracts of agricultural land are severely affected by salt storms originating from the desiccated Aral Sea, posing significant risks to respiratory health and further degrading farmland. This vicious cycle of soil salinity, exacerbated by inefficient irrigation and poor drainage, diminishes air quality and agricultural productivity. Altogether, this creates an increasingly hostile environment for both people and wildlife.

The economic repercussions are also significant. Turkmenistan’s economy relies on natural gas exports, which constitute nearly 90 percent of its export revenue. However, the natural gas industry itself is water-intensive, requiring substantial amounts for cooling systems, equipment cleaning, and extraction processes. Water scarcity could directly impede the nation’s ability to maintain current natural gas production levels, potentially impacting national revenue and the funding of essential public services.

Furthermore, the unique ecosystems adapted to Turkmenistan’s arid conditions, including the vast Karakum Desert, are under threat. Rivers, wetlands, and oases—vital habitats for diverse flora, fauna, and migratory birds—risk shrinking or disappearing entirely, leading to biodiversity loss and pushing vulnerable species toward extinction.

Finally, the crisis is beginning to drive climate migration. Faced with failing crops, soil degradation, rising food prices, and dwindling agricultural employment (a sector that employs over 40 percent of the workforce), people are increasingly forced to migrate in search of better living conditions, both within the country and abroad. This displacement adds another layer of social and economic strain.

A call to action to maintain regional stability

The water crisis unfolding in Turkmenistan is not merely a domestic issue; its ripples will likely be felt regionally and globally. Declining agricultural output could increase Turkmenistan’s reliance on international food markets, potentially contributing to fluctuations in global food prices. More critically, the potent combination of environmental degradation, economic hardship, and potential social unrest fueled by water scarcity could destabilize the country and, by extension, the wider Central Asian region. History, including the the Syrian uprising, serves as a warning of how severe drought and resource mismanagement can exacerbate existing tensions and lead to conflict. Such instability could create power vacuums, ripe for large global powers.

Therefore, addressing Turkmenistan’s water challenge is a matter of international concern. Proactive engagement from the United States and the European Union could play a crucial role in promoting sustainable solutions and regional cooperation. In addition, supporting comprehensive research and data collection on water resources, climate impacts, and agricultural practices is essential for informed policymaking. The United States and the European Union should take the lead in facilitating regional dialogues involving Turkmenistan, Afghanistan, Tajikistan, and Uzbekistan. Such initiatives will be critical for fostering transboundary cooperation and preventing conflicts over shared water resources such as the Amu Darya. Furthermore, technical assistance and funding from the United States and the European Union, potentially channeled through civil society organizations, could help implement sustainable water management practices on the ground—from promoting efficient irrigation techniques to supporting public education campaigns on water conservation.

Turkmenistan’s struggle with water scarcity is a powerful illustration of the interconnected challenges facing many parts of the world in the twenty-first century, where climate change, resource management, and geopolitical interests collide. Ignoring this looming crisis is not an option. Concerted action, grounded in cooperation and sustainable practices, is essential not only to secure a livable future for Turkmens but also to maintain stability in the region.

Rasul Satymov is a researcher with Progres Foundation with a focus on climate change, energy, and water issues in Turkmenistan.

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Reauthorizing the DFC is vital to ensuring the United States is not outcompeted by China in its hemisphere. It is essential for supporting US jobs, creating markets for US exports, advancing energy independence, and linking foreign policy outcomes directly to economic benefits for American workers. Congress must act decisively to secure America’s economic interests and leadership in the Western Hemisphere.

How to update the DFC to further advance US foreign policy priorities in Latin America and the Caribbean

Created in 2018 under the BUILD Act, the DFC merged the Overseas Private Investment Corporation (OPIC) with USAID’s Development Credit Authority. This restructuring introduced a more agile and powerful tool for advancing US development objectives while strategically countering rivals, especially China.

As Congress prepares to revisit the DFC’s authorizing legislation, it should prioritize ensuring that the agency can effectively mobilize private capital for high-impact investments in infrastructure, minerals, energy, technology, and healthcare. These sectors are essential to strengthening the United States domestically—a key criterion set by the current administration for all agencies pursuing foreign policy initiatives. For example, investments in rare earth mineral exploration in the region not only secure preferential access for the US to the resource but can also generate US jobs in areas such as classification, storage, distribution, and processing.

The DFC must also reposition itself with enhanced tools, such as capital financing and technical assistance, so it can lead strategic investments. These investments should prioritize relocating supply chains for critical minerals, semiconductors, pharmaceutical inputs, and digital connectivity throughout Latin America and the Caribbean. Strengthening strategic alliances with like-minded countries and the private sector is essential to expand the DFC’s role in sectors vital to US economic and national security.

Key takeaways:

• Strategic alignment: The US International Development Finance Corporation (DFC) is a crucial agency for advancing US foreign policy objectives, promoting job creation and development, fostering economic partnerships, and supporting strategic allies. It aligns with forward-looking initiatives from the Trump administration, such as América Crece 2.0, which emphasizes private-sector-led growth. But DFC’s first reauthorization provides a unique window for updates to enhance effectiveness and alignment with US foreign policy priorities. Congress has until October to approve a reauthorization bill, but the decreasing availability of funds presents an urgency for approval.
• Geopolitical competition: The DFC can and should act as a strategic counter to the rising global competition for influence across the world, and particularly, in many of the developing nations that have continued to join China’s Belt and Road Initiative. The DFC offers a transparent, market-based alternative to opaque, state-driven financing models that come with political strings attached.
• Economic security: By investing in critical infrastructure and critical rare earth minerals, cybersecurity, energy, and healthcare in Latin America and the Caribbean (LAC), the DFC can enhance US economic security by strengthening alliances with like-minded countries to serve as a counterweight to aggressive Chinese actions that seek to dominate key sectors for the US economy and US supply chains while reinforcing the value of US-led investment.

Report May 29, 2025

Why Latin America and the Caribbean matter for OECD countries

By Jason Marczak, Martin Cassinelli

Latin America and the Caribbean are increasingly vital partners for OECD countries, offering critical minerals, food security, and clean energy assets. With democratic institutions, open markets, and active multilateral engagement, the region supports global resilience. Strengthened OECD–LAC cooperation can advance shared goals in economic security amid shifting global dynamics.

Americas Caribbean

Atlantic Council Strategy Paper Series Feb 12, 2024

A strategy to counter malign Chinese and Russian influence in Latin America and the Caribbean

By Matthew Kroenig, Jason Marczak, Jeffrey Cimmino

As strategic competition with China and Russia continues to intensify, the United States and its allies need a strategy for countering the malign influence of authoritarian rivals in the Western Hemisphere. This Atlantic Council Strategy Paper proposes a path forward for the United States and its allies to do that.

China Economy & Business

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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The post Why Congress must reauthorize the US Development Finance Corporation appeared first on Atlantic Council.

China orchestrated its dominance of rare earths markets by creating a whole-of-government apparatus focused on that goal. It comprises several complementary, complex systems and processes. The government centralized decision-making in a way that consolidates power in the Chinese Communist Party. It fostered supply chain diplomacy to facilitate networks of international investment and extraction. It established continuous direct and indirect subsidization of rare earth production and pricing.

As part of the “Mapping China’s strategy for rare earths dominance” report by Craig A. Hart, the three interactive flowcharts below help demystify these complex systems by tracing the flow of decision-making and money. Hover over components of the charts (not all have additional descriptions) to learn more about the roles of different actors in the rare earths ecosystem and how they drive Chinese dominance in the global market.

Explore the decision-making processes and financial flows
that power China’s rare earths ecosystem.

This overview of the entire Chinese rare earths ecosystem focuses on key government bodies involved in policymaking, major players in rare earths production, and important downstream industries.

Chinese ministries, financial actors, and embassies reinforce Chinese dominance of rare earths by expanding China’s mining investments overseas.

These party bodies, government agencies, and administrative offices work to implement rare earths policy and extract funding for subsidies from the Chinese people.

China’s unrivaled position in rare earths and the leverage this provides have profound implications for the energy transition, energy security, and, relatedly, national security both domestically and globally.
Read the full report here.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Learn how China orchestrated its rare earths dominance appeared first on Atlantic Council.

Where should the US Congress put its attention?

The heterogenous nature of the Caribbean offers various opportunities to strengthen relations with the region and, by extension, advance US interests. From natural gas to geothermal energy, Caribbean countries offer new opportunities for US investment. Reducing crime and gang proliferation across the region can protect US citizens traveling abroad and stem the potential flow of illicit goods and services.

Energy security

The United States can strengthen its positioning in the Caribbean by supporting regional energy security. At current estimated reserves, Guyana, Suriname, and Trinidad and Tobago house almost 30 trillion cubic feet of natural gas, with further offshore exploration expected to increase the size of reserves. At the same time, other countries require reliable power generation–which can be provided by liquified natural gas (LNG) imports–to provide resilience to their electricity grids during natural disasters, improve economic competitiveness, and to underpin ambitions to add renewables to their energy matrix.

Here, the United States will find opportunities on three fronts. First, natural gas exploration opportunities, liquefaction infrastructure, and building pipelines and LNG storage are areas where US oil and gas companies and mid-size service-based companies can invest. Second, imported oil from Guyana, Suriname, and Trinidad and Tobago can be low-cost and competitive options vis a vis other suppliers to satisfy growing US energy demand and supplement domestic shale supply in Texas and Midwestern states. Finally, congressional members can work with the Southern Caribbean hydrocarbon producers to support energy security in Europe and lessen demand for Russian energy resources by increasing cargo exports to EU members.

Greater Caribbean energy security can also lead to lower electricity prices, which can benefit constituents of US congressional members traveling to the Caribbean and potentially reduce migration to the United States. Most of the region (except for Suriname and Trinidad and Tobago) pays some of the highest electricity in the Americas (see Figure 3), which is on average, double or triple what US consumers pay. At the same time, electricity costs can account for almost 70 percent of a hotel’s utility due to air conditioning, lighting, and heating, among others.

Therefore, to keep profits stable, the high costs translate to the consumer–in this case, US tourists. This means that by bringing down electricity costs and lowering the cost to travel and having overnight stays in the Caribbean, US tourists benefit and have more purchasing power to buy in-country goods (most of which are imported from the United States). Further, reducing electricity prices can stem Caribbean emigration flows to US shores given that high costs of living are a key migratory push factor.

Reducing violent crime and gang activity

Security concerns in the Caribbean are on the rise. Figure 4 shows that Caribbean countries have high homicide rates (per 100,000) relative to their Latin American neighbors. Rates have been on the rise due to increased gang proliferation and illegal imports of small arms–many of which originate from the United States. For example, countries like Trinidad and Tobago, declared a state of emergency late 2024 due to increased gang activity and the usage of high-powered assault weapons. Gang proliferation is also on the rise. While Caribbean countries do not house large gangs, smaller gangs pervade the region, using the informal ports of entry to move illicit guns, goods, and services. In 2021, Jamaica identified 379 different gangs with 140 named in 2023 for Trinidad and Tobago. The decentralized nature of criminal and gang networks in the region inhibits Caribbean governments and police forces’ abilities to combat gang operations. Further, gangs in the Caribbean, especially in Jamaica, are turf oriented. This allows smaller gangs to gain a foothold in local communities, sometimes acting as community leaders and providing needed social services and protection from rival gangs.

Addressing the Caribbean’s security challenges can protect US citizens traveling to the region and curb gang activity and illicit trafficking before they reach US shores. Travel destinations for US citizens, such as Jamaica and islands in the Eastern Caribbean are among the most violent in the region. Therefore, improving citizen safety in the Caribbean ensures US citizens’ safety as well. Given that gun-related activities are a primary driver of citizen insecurity, one solution is for US agencies to work closer with Caribbean defense and police forces to improve monitoring, tracking, and seizures of illegal small arms.

Further, stemming gang activity in the region can also disrupt transnational criminal organizations’ operations. Specifically, Caribbean countries are used as a transit point for drugs, many of which end up in the United States. Enhanced maritime security and interdiction in the Caribbean Sea can help interrupt illegal drug supply chains and weaken transnational criminal organizations. However, the capacity to monitor drug flows is a challenge. Partnerships with the United States to gain access to satellite imagery and drone technologies to identify drug shipment routes can provide Caribbean governments the needed tools to tackle drug flows.

Bottom lines

• The challenges facing Caribbean countries are growing and have consequences that are not constrained to the region’s geographic borders, likely to directly or indirectly affect US interests. This can be avoided if there are consistent and strong partnerships between the Caribbean and the United States. This can and should start with stronger US congressional engagement to the region.
• US congressional members should consider legislation that prioritizes a holistic strategy with appropriated resources to the Caribbean. While CBSI tackles security challenges, support is needed across the energy, infrastructure development, agricultural, and financial services, among others.
• Given the importance of the Caribbean to US interests, the House Foreign Affairs Committee should consider a hearing that highlights new opportunities to strengthen US interests in the Caribbean and the broader US-Caribbean partnership.
• Strengthening US-Caribbean ties start with building a foundation for a long-term partnership. US congressional engagement can help turn four-year policies into decades of friendship, all while protecting US interests along its “third border.”

Staff

Wazim Mowla

Fellow and Lead of the Caribbean Initiative

Adrienne Arsht Latin America Center

Caribbean China

Staff

Maite Gonzalez Latorre

Program Assistant

Adrienne Arsht Latin America Center

Americas Education

New Atlanticist Mar 25, 2025

The US needs to build a new Caribbean policy. Rubio’s trip to the region can be the first step.

By Wazim Mowla

US engagement with the Caribbean should prioritize energy investments and efforts to reduce violent crime in the region.

Caribbean Economy & Business

New Atlanticist Apr 29, 2025

What’s next for Trinidad and Tobago’s new prime minister?

By Wazim Mowla and Dale Ramlakhan

On April 28, Kamla Persad-Bissessar was elected as the next prime minister of Trinidad and Tobago. While she is returning to the role, she’ll find a country that is different from her first term.

Caribbean Elections

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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WASHINGTON, DC — June 4, 2025 —   The Atlantic Council, XRG, and MGX, will convene the ENACT summit in Washington, DC, on June 16, bringing together global leaders from the energy, technology, and finance sectors to explore the intersection of artificial intelligence, energy systems, and investment.

A slate of high-level leaders — including U.S. Secretary of Energy Chris Wright and the United Arab Emirates’ Minister of Industry and Advanced Technology Dr. Sultan Ahmed Al Jaber — will help shape the conversation on powering the future of AI.

Launched with support from XRG, the UAE’s global energy investment company, and MGX, the UAE’s leading AI and advanced technology investor, ENACT (Energy and Action) is a future-focused platform designed to advance practical solutions to how the energy, tech, and finance sectors can power the future of global AI for a pro-growth world.

“AI is supercharging progress, but in doing so, it is also supercharging energy demand. By convening leaders from energy, technology, policy and finance, ENACT will connect the dots between sectors to help drive coordinated solutions that ensure that the era of AI has the power it needs. This gathering will also seek to unlock AI’s potential to enhance energy efficiency and abundance that represent the bedrock of sustainable growth and global prosperity,” said Al Jaber, who is also the managing director and group CEO of ADNOC and executive chairman of XRG.

“Artificial intelligence is rapidly becoming the foundation of modern economies, driving surging demand for both digital and physical infrastructure. Its continued advancement depends on reliable, scalable energy — a critical enabler of global AI expansion. We must collectively invest in the core systems — power generation, advanced grid technologies, and high-efficiency compute — to ensure AI growth is sustainable, secure, and accessible worldwide. Partnering with XRG and the Atlantic Council at ENACT underscores our commitment to building the infrastructure that AI’s future requires,” said Ahmed Yahia, CEO and managing director of MGX.

The summit will take place one day ahead of the Atlantic Council’s ninth Global Energy Forum, held June 17-18 in Washington, DC.  These back-to-back summits will foster international cooperation at the nexus of energy, technology, and geopolitics.

“There is an unprecedented opportunity to leverage artificial intelligence as a tool for net-growth as we navigate the challenges of a transforming energy system,” said Frederick Kempe, president and CEO of the Atlantic Council. “We’re excited to co-host ENACT with XRG to establish an action agenda to meet this challenge, by convening the right energy, tech and policy leaders to pioneer the path forward.”

This ENACT convening builds on the momentum of the ENACT Majlis in Abu Dhabi, where more than 80 global leaders laid the groundwork for pragmatic action and positive energy solutions.

More information about ENACT is available by contacting Katie Kenney, Global Energy Center Deputy Director, at KKenney@atlanticcouncil.org. Participants may register for the Atlantic Council Global Energy Forum by visiting our website.

About the Atlantic Council

The Atlantic Council promotes constructive leadership and engagement in international affairs based on the Atlantic community’s central role in meeting global challenges. The Council provides an essential forum for navigating the dramatic economic and political changes defining the twenty-first century by informing and galvanizing its uniquely influential network of global leaders. The Atlantic Council—through the papers it publishes, the ideas it generates, the future leaders it develops, and the communities it builds—shapes policy choices and strategies to create a more free, secure, and prosperous world.

About XRG

XRG is a transformative international energy investment company, focused on lower-carbon energy and chemicals, and headquartered in Abu Dhabi. Wholly owned by ADNOC, XRG has an enterprise value of over $80 billion. Its portfolio includes interests in industry-leading companies that are meeting rapidly increasing global demand for lower carbon energy and the chemicals that are essential building blocks for products central to modern life.

About MGX

MGX is a technology investment company focused on accelerating the development and adoption of AI and advanced technologies through world-leading partnerships in the United Arab Emirates and globally. MGX invests in sectors where AI can deliver value and economic impact at scale, including semiconductors, infrastructure, software, tech-enabled services, life sciences, and physical AI. For more information, visit: https://www.mgx.ae/en

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China dominates the rare-earth supply chain, with Beijing supplying about 60 percent of global rare-earths output and controlling up to 90 percent of refining capacity. For the United States, which needs neodymium and dysprosium for F‑35 fighter jet engines as badly as it needs lithium for electric vehicles, continued dependence on Beijing is impossible. The solution is not wishful “onshoring” to the United States alone; it is establishing a portfolio of reliable partners. Kazakhstan, already the world’s leading uranium producer and a top‑ten copper and zinc exporter, is a prime candidate for such a partnership.

Rare earths have become a geopolitical flashpoint. In practice, that means Beijing can throttle supply at will. In April, for example, China abruptly restricted exports of several important rare earths and permanent magnets—actions triggered by trade disputes with the United States under the pretext of “energy security.” US firms and strategists described the move as China’s latest attempt to weaponize its rare-earths dominance.

Supply shocks will recur, not recede. After Beijing halted exports of rare-earth refining technology to the United States in late 2023, it spent 2024 steadily ratcheting up export-license requirements on strategic rare-earth oxides or outright banning its exports. These moves culminated in April of this year, with Beijing placing export restrictions on seven heavy and medium rare-earth elements (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium) on dual-use national-security grounds.

The United States has only just begun to free its high-tech supply chain dependence on China. Over the past few years, for example, US policymakers have launched some domestic projects and lured allies in Europe and Australia to develop alternatives, but many of those efforts are still nascent. New supply lines will take years to mature. Washington needs a long-term partnership strategy that goes beyond homespun mining; it needs countries capable of supplying rare earths at scale. Since 2020, Kazakhstan has ramped up rare-earth mining, increasing its exports nearly fivefold by 2024. Still, both in 2023 and 2024, 100 percent of its rare-earth output is exported to China—a telling indicator that the resource is there, but does not currently flow to the West. By moving swiftly, the United States could hedge against future Chinese disruptions—and help build a secure, diversified global supply chain for these critical minerals.

Kazakhstan’s rare earths

Unlike some prospective supplier countries, Kazakhstan already knows it has rare-earth wealth. In early April, geologists in the country announced the “Zhana Kazakhstan” discovery: an estimated twenty million metric tons of rare-earths‑bearing ore in the Karagandy region, including sizable heavy‑rare‑earth concentrations. If even 10 percent of the ore proves recoverable at today’s grades, that equates to around 200,000 tons of rare-earth oxide content—enough to meet current US neodymium magnet demand for a dozen years. If validated, the site would give Kazakhstan the world’s third‑largest rare-earth element reserves, trailing only China and Brazil. While promising, these preliminary findings are no sure thing and will require deeper study.

This find is not an outlier. Soviet‑era data and recent airborne surveys point to additional prospects across southern and eastern Kazakhstan. The geology has been there; what was missing was investor certainty. That is changing fast. In just the past few years, the government has opened scores of new exploration projects.

Kazakhstan is no newcomer to big mining. In 2024, the country led the world in uranium output (about 38 percent of global supply) and ranked among the top ten producers of copper and zinc. The national mining concern, Tau-Ken Samruk, consolidates dozens of mines and has global joint ventures in everything from gold to base metals. Kazakhstan’s energy and transport infrastructure likewise favors large-scale mining, as it already accounts for 14 percent of the country’s gross domestic product.

Kazakhstan’s “multivector” diplomacy also plays a factor. Kazakh President Kassym-Jomart Tokayev courts Beijing and Moscow, yet he also seeks deeper ties with Washington and Brussels to balance against those giants. That instinct makes Astana a willing partner for the United States, and a less risky one than conflict-scarred alternatives such as Myanmar and the Democratic Republic of the Congo. At the same time, the United States should not expect Kazakhstan to choose only Western partners over the major powers along its eastern and northern borders.

Since 2018, Astana has overhauled its subsoil code on a “first come, first served” model. New legislation helps promote fiscal stability, offers value-added tax holidays on exploration equipment, and caps royalties. As a result, majors from Rio Tinto to Fortescue have launched joint ventures, while US‑backed Cove Capital began drilling rare-earths targets near Arkalyk in 2024.

Kazakhstan also has an edge in infrastructure. The Middle Corridor rail‑and‑port network—which runs from western China through Kazakhstan to the Caspian Sea and onward to Europe—was expanded last year with European Union (EU) financing. Aktau’s Caspian port already handles uranium concentrate bound for Canada and France; rare-earths concentrates could follow the same route with minimal modification.

In short, Kazakhstan offers what many mining countries do not: favorable geology and the business environment and infrastructure to exploit it. Kazakhstan already has smelters and refineries for many ores, and it boasts production of advanced materials such as purified manganese sulfate and titanium metal. It even produces gallium (used in semiconductors) and recycles rhenium, though admittedly it still lacks deep processing for rare-earth oxides.

The way forward

Washington has learned the hard way that pledges alone won’t break Beijing’s monopoly, and its next move should elevate quiet deals into an explicit strategy. On the Kazakh side, top leaders have made it clear that developing mining for Western markets is a priority. For example, Tokayev has called critical minerals the country’s “new oil,” and he has signed a number of memoranda with foreign partners on exploration and processing. Kazakhstan’s September 2024 “Kazakh-German” forum alone produced twenty-three agreements in mining, including rare-earth joint ventures.

Here are the three critical steps Washington and Astana should take next:

1. Unlock normal trade by repealing the Jackson-Vanik Amendment and grant Permanent Normal Trade Relations (PNTR) to Kazakhstan. The United States should finish what H.R. 1024 has already teed up: removing Kazakhstan from the Soviet-era Jackson-Vanik Amendment and extend PNTR to Kazakhstan. Scrapping this relic costs no money, instantly signals strategic seriousness, and eliminates the legal ambiguity that still shadows US financing and offtake contracts with Kazakh mines. PNTR lets both sides write binding long-term supply agreements.
2. Set up a US–Kazakhstan rare-earth task force to drive the deals. The United States and Kazakhstan should co-chair a cabinet-level task force comprised of the US State Department and US Commerce Department, as well as Kazakhstan’s Ministry of Industry. This task force would set annual, public targets for the number of exploration licenses issued to Western consortia, the amount of pilot separation plants financed and built on Kazakh soil, and the export tonnage of heavy and medium rare-earth elements to non-Chinese markets. The task force could instruct the US International Development Finance Corporation and Export-Import Bank of the United States to prioritize Kazakh rare-earth projects, while Kazakhstan fast-tracks permitting and guarantees site security. Early co-location of processing near the mine head would lock in long-term offtake for US buyers and complement EU infrastructure money already pledged for the Aktau port.
3. Deploy a blended-finance and technology package along the full value chain. Washington should pair loan guarantees with technical assistance from the US Geological Survey, Oak Ridge National Laboratory, and the Department of Energy’s Critical Materials Institute. Kazakhstan should match that support by streamlining visas for engineering teams and auctioning new mine blocks on transparent terms. The Pentagon’s National Defense Stockpile could start purchasing Kazakh oxides, while the Department of Energy and Nazarbayev University co-fund recycling research and development to close the loop at home.

To be sure, there are challenges ahead, and mining remains a difficult, uncertain venture. Bringing a greenfield rare-earths mine to commercial output can take more than a decade. But doing nothing cements Beijing’s leverage for that same decade and beyond. By acting now, Washington can buy future resilience and signal to market actors that rare-earths diversification is real.

Miras Zhiyenbayev is the advisor to the chairman of the board for international affairs and initiatives at Maqsut Narikbayev University, Astana, Kazakhstan. He is also co-sponsoring the June 4 US-Central Asia Forum at the Atlantic Council.

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The Middle Corridor creates a strategic role for Turkey as a central energy hub connecting Europe to additional suppliers. The European Union (EU) has recently increased its interest and investment in the corridor. However, the United States is still sitting on the sidelines even though the Middle Corridor presents a vital opportunity to counterbalance Russian and Chinese dominance in the region and limit Iran’s desire to mitigate the effects of economic sanctions. Moreover, greater connectivity means access to Central Asia’s vast deposits of rare earth elements crucial for civilian and defense products, new energy, and information technology. As corridor countries seek to reach new markets and lessen their dependence on Russia and China, Turkey, the EU, and the United States share a common interest in increasing cooperation and counterbalancing the power of Russia and China.

The rise of trade corridors

Following Russia’s annexation of Crimea in 2014, the European Union faced unprecedented precarity and had to reconsider its energy structure to diminish its vulnerable interdependence on Russia’s asymmetrical control over pipelines and weaponization of energy. China’s Belt and Road Initiative and Europe’s urge for diversification increased the need for connectivity and shifted international attention toward trade corridors. As corridor wars intensify and become the new scene for great power competition, the United States needs a more assertive policy concerning Central Asia. This is especially true as the growing cooperation between Russia, China, Iran, and, to some extent, North Korea aims to challenge Western influence by building alternative trade routes aligned with their political agenda. Washington must actively engage in infrastructure initiatives across Central Asia to counterbalance this trend.

The Middle Corridor: A strategic alternative

The Trans-Caspian International Transport Route (TITR), or the Middle Corridor, is a multimodal trade route connecting Europe and China via Azerbaijan, Georgia, Kazakhstan, and Turkey. Since Russia’s full-scale invasion of Ukraine in 2022, its strategic importance has grown as it bypasses both Russia and Iran. The Middle Corridor relies primarily on existing rail and port infrastructure and requires further development and investment. Countries along its path are working to position it as an alternative to the Northern Corridor (the traditional route through Russia) and the Southern Corridor (which runs through Iran).

Before 2022, the Northern Corridor carried more than 86 percent of transport between Europe and China, while the Middle Corridor constituted less than 1 percent. Following the full-scale Russian invasion of Ukraine, the Northern Corridor became a financial and political liability, especially for Western countries aiming to counter Russian control over trade routes. Shipping volumes of the Northern Corridor dropped by half in 2023 compared to 2022. Part of this traffic moved to the Middle Corridor, with increases of 89 percent and 70 percent in 2023 and 2024, respectively.

The Middle Corridor has many advantages. It is a relatively safer route, especially given the disruptions along the Northern Corridor due to Western sanctions on Russia and those in accessing the Suez Canal through the Bab el-Mandeb Strait due to increased Houthi attacks on vessels. In addition to providing economic revenues to corridor countries, some define the Middle Corridor as a “crossroads of peace,” echoing the “peace pipelines” strategy of the past.

According to the World Bank, by 2030, the Middle Corridor can reduce travel times, while freight volumes could triple to 11 million tonnes, with a 30 percent increase in trade between China and the EU. However, progress in the Middle Corridor is slow, and various operational and regulatory problems are causing unpredictable delays. There are still logistical and infrastructural challenges. Most importantly, its annual capacity (6 million tons in 2024) is drastically below the Northern Corridor’s annual capacity of over 100 million tons.

Corridor wars through connectivity

Recently, connectivity and diversification have become key drivers in international politics, with regional and global powers seeking to expand their influence in the Middle Corridor. Japan is following these developments to diversify its trade routes while countering Russia and China. Although the Gulf Cooperation Council (GCC) is not yet a key player in the Middle Corridor, various summits between GCC and Central Asian countries since 2023 have manifested growing cooperation and increased GCC investments in the region’s infrastructure.

As the natural entry point into Europe, Turkey understood the importance of connectivity to sustain economic, commercial, and investment relations and political and cultural ties within the region. In line with its geostrategic location, Turkey has invested in many connectivity projects since the 1990s, such as the Baku-Tbilisi-Ceyhan pipeline, the International Transport Corridor, the Black Sea Ring Highway, the Eurasia Tunnel, the Yavuz Sultan Selim Bridge, the Edirne-Kars high-speed railway, and the Northern Marmara Motorway.

The Middle Corridor, as “the most reliable trade route between Asia and Europe,” presents Turkey with a historic opportunity to establish itself as a strategic transit hub in Europe-China trade. Diversifying its energy suppliers could reduce Russian influence in Turkey’s energy policy while expanding its influence in Central Asia and strengthening its economic ties with the EU. From the Turkish perspective, the corridor would improve its strategic position and strengthen its relations with Turkic-speaking countries in the region.

For the European Union, the Middle Corridor aligns with its Global Gateway strategy. The EU defined the development of the Middle Corridor as a priority to secure connectivity in the transport and energy sectors and promote sustainable economic growth in the region. While current global challenges increase the need for solid partnerships, Central Asia is a €340 billion economy, growing at an average rate of 5 percent annually, with further potential for collaboration. The EU sees the Middle Corridor as a fast and safer route connecting Europe and China, which helps diversify supply chains.

The Middle Corridor serving Russia, China, and Iran

For China, the development of the Middle Corridor is an opening to integrate into global markets and supply chains, an opportunity to reduce its financial burden and dependence on routes controlled by Russia, and also an escape from US sanctions.

Russia remains a major obstacle in developing the Middle Corridor. For regional countries,  Moscow would “do everything in its power to control overland trade flows.” While Russia is currently distracted with its war against Ukraine, considering Russia’s sensitivities, it will at some point want to disrupt Western involvement in the region or even exploit the corridor for its own benefit. Russia has already begun exploiting the Caspian Sea and Kazakhstan to bypass Western sanctions. Moscow aims to leverage the enhanced connectivity of the Caspian Sea for military purposes, including the transport of Shahed drones from Iran. Additionally, since 2022, Russia has increased its investment in the International North-South Transport Corridor (INSTC) to diversify its trade routes, reducing its reliance on East-West routes. Iran’s neighbors and even its allies bypassed Iran in current connectivity projects. This result is mainly due to international sanctions, Iran’s poor infrastructure, and a lack of investment. In 2023, representatives from Turkey, Iran, Kazakhstan, Turkmenistan, and Uzbekistan met to discuss the Turkmenistan-Uzbekistan Route, and Tehran immediately proposed a third alternative connecting this route to Iran. Tehran also invests in routes linking Iran to China via Afghanistan to secure a stronger foothold and influence the balance of power within regional trade routes. Iran perceives the Zangezur Corridor as a potential threat that might increase Turkey’s presence near its borders. For Tehran, this project is “Turkey’s highway to Turan.”

Potential strategy for the United States, the EU, and Turkey

Although Central Asia is pivotal in ongoing corridor wars, the region is still not an American priority. The United States needs a comprehensive and updated Central Asia strategy. As Secretary of State Marco Rubio recently signaled, a first step could be to end the Jackson-Vanik Amendment, which restricts formal trade relations with nonmarket economies such as Azerbaijan, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan. The region also needs American investment to modernize the Middle Corridor. In addition to direct economic benefits, the United States could counterbalance the influence of Russia and China. While great connectivity would enable regional countries’ ambitions, for the United States, it would facilitate access to vast mineral and rare earth reserves, which globally are under significant Chinese control.

The Middle Corridor serves as a lifeline for the landlocked region. Regional countries have the political will and determination to develop the corridor’s potential. In the age of great power competition, these countries have significant room for maneuvering, and they benefit from the multidimensional foreign policy they pursue to enhance their autonomy. However, there is a growing mismatch between expectations and the capacity of the Middle Corridor.

The United States, the EU, and Turkey should cooperate and intensify their engagement with these countries to cultivate mutually beneficial partnerships. Turkey is wildly successful as Ankara invests political capital in strengthening relations. Enhancing partnerships with regional governments and investing in infrastructure would benefit regional governments and the West, as they can maintain their influence in shaping global trade routes. Given that Russia, China, and Iran are trying to prevent the growing Western influence in the region, the West must immediately recognize the strategic importance of transit corridors. As an influence war is intensifying over transit routes, the United States should be at the center of these developments—and not in the periphery—to benefit and counter the geopolitical challenges of Russia, China, and Iran.

Karel Valansi is a political columnist who analyses the Middle East and foreign policy issues in Şalom Newspaper and T24. Follow her on X @karelvalansi.

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The Atlantic Council in Turkey aims to promote and strengthen transatlantic engagement with the region by providing a high-level forum and pursuing programming to address the most important issues on energy, economics, security, and defense.

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The post Why the Middle Corridor matters amid a geopolitical resorting appeared first on Atlantic Council.

Dramatic events altered the geopolitical landscape, affecting Turkey, the United States, and NATO in late 2024 and early 2025. The election of Donald Trump as the forty seventh president of America, a ceasefire in Gaza after months of showdown between Israel and Iran’s Axis of Resistance, and the collapse of the Assad regime in Syria have challenged many assumptions and regional political-military considerations. The fifth issue of the Defense Journal assesses key dynamics as we enter a new era. The Defense Journal team examines the rise of the hyperwar concept via military applications of artificial intelligence and the frontier of development for robotic systems. We also look at trends in key US policy concerns in the region to the south of Turkey, including Israel and Syria. If the first months of the second Trump administration are any indication, rapid change and a high tempo in US foreign policy decisions affecting Washington, Ankara, and their shared interests across several regions is the new normal. The Editorial Team hopes you find these contributions interesting and useful.

Rich Outzen and Can Kasapoglu, Defense Journal by Atlantic Council IN TURKEY Co-managing editors

Honorary advisory board

The Defense Journal by Atlantic Council IN TURKEY‘s honorary advisory board provides vision and direction for the journal. We are honored to have Atlantic Council board directors Gen. Wesley K. Clark, former commander of US European Command; Amb. Paula J. Dobriansky, former Under Secretary of State for Global Affairs; Gen. James L. Jones, former national security advisor to the President of the United States; Franklin D. Kramer, former Assistant Secretary of Defense for International Security Affairs; Lt. Gen. Douglas E. Lute, former US Ambassador to NATO; and Dov S. Zakheim, former Under Secretary of Defense (Comptroller) and Chief Financial Officer for the Department of Defense.

Gen. Wesley K. Clark

Chairman and CEO of Wesley K. Clark & Associates & Board Director, Atlantic Council; former Supreme Allied Commander Europe of NATO

Amb. Paula J. Dobriansky, Ph.D.

Senior Fellow at Harvard University JFK Belfer Center for Science & International Affairs; Board Director, Atlantic Council; former Under Secretary of State for Global Affairs (2001-2009)

Gen. James L. Jones

President, Jones Group International and Executive Chairman Emeritus, Atlantic Council; former National Security Advisor to the President of the United States

Franklin D. Kramer

Distinguished Fellow & Board Director, Atlantic Council; former US Assistant Secretary of Defense

Lt. Gen. Douglas E. Lute

CEO, Cambridge Global Advisors & Board Director, Atlantic Council; former US Permanent Representative to NATO

Dov S. Zakheim

Senior Advisor, Center for Strategic and International Studies; Senior Fellow, CNA Corporation; Board Director, Atlantic Council; former US Under Secretary of Defense

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The Atlantic Council in Turkey aims to promote and strengthen transatlantic engagement with the region by providing a high-level forum and pursuing programming to address the most important issues on energy, economics, security, and defense.

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An essential tool in the development toolkit

Developing countries’ energy demand is rising, requiring more firm power generation. Nuclear energy offers a reliable baseload critical for economies industrializing with energy-intensive sectors such as manufacturing and data centers. A 900-MW nuclear reactor can produce—with a much smaller footprint—the same power as 8.5 million solar panels or 800 wind turbines. And, unlike hydropower and geothermal energy, nuclear power is much less geographically constrained, enabling it to be sited in many locations.

Major economies are exporting their nuclear aversion

Currently, most MDBs do not fund nuclear energy projects. The Asian Development Bank (ADB) refuses to finance nuclear energy projects due to issues such as waste management and high investment costs. The European Bank for Reconstruction and Development (EBRD) prioritizes its energy strategy for “scaling up renewables,” supporting nuclear projects solely in areas of safety like decommissioning, with no involvement in construction. EBRD states it is neither in favor of or opposed to nuclear energy; it is simply operating within the mandate determined by its shareholders. The World Bank—the largest and arguably most influential MDB—cites a lack of expertise as its reason for not funding nuclear energy projects, although it frequently relies on external contractors for expertise in other sectors.

However, the World Bank’s president, Ajay Banga, recently signaled a potential shift by pushing the board to reconsider its stance on funding nuclear energy projects. In reality, the World Bank’s voting structure, which allocates voting power according to how much funding a country provides, grants its biggest funders with veto power. Germany serves as a key example: it shut down its nuclear reactors and opposed the inclusion of nuclear power in the European Union’s green investment taxonomy. The World Bank is held hostage by this tunnel vision, which supports only renewable projects, even though these technologies alone cannot meet the growing energy demands of developing nations.

MDBs’ refusal to fund nuclear power projects exacerbates the geopolitical divide between developing economies and the developed nations. This results in missed opportunities to expand energy access in poorer nations based on the prejudices of wealthier nations.

Lenders of last resort

MDBs’ current failure to finance nuclear projects cedes opportunities to other lenders. Western banks, including Goldman Sachs and Barclays, recently announced their support for nuclear energy, but this long-term commitment is questionable given private lenders’ risk-averse nature. Prolonged construction timelines and high capital costs for nuclear energy projects in countries like the United States may eventually deter commercial banks from maintaining their support for the technology.

Russia and China could fill the gap if the West leaves nuclear financing to others. Russia leads global nuclear power plant construction, accounting for about 60 percent of reactor exports, with ongoing projects in nations like Turkey, Bangladesh, and Egypt. Similarly, China is rapidly building out its domestic nuclear capacity—targeting over 100 new reactors by 2035—and leveraging the technology as a geopolitical tool under its Belt and Road Initiative, establishing projects in nations such as Pakistan and Argentina.

The MDBs’ absence in nuclear financing starkly contrasts with the generous loans offered by Russia and China. By leveraging state funding, Russia offers highly attractive terms, covering up to 85 percent of total project costs, as seen in Egypt’s loan, with lower interest rates and longer repayment periods than those required by the Organisation of Economic Co-operation and Development (OECD) for its members—an organization that does not include Russia or China. Russia is also expanding its equity stakes in international nuclear projects, such as Turkey’s Akkuyu nuclear power plant, where it holds a majority stake, fostering closer geopolitical ties and exerting influence over critical energy infrastructure.

Similarly, China extends significant financial support, covering 85 percent of construction costs for Pakistan’s Chasma 5 reactor along with a $100 million discount on the total project cost. China has also offered to cover 85 percent of costs in loans for Argentina’s Atucha III reactor.

By refusing to finance nuclear projects, MDBs force developing nations to rely on Russian and Chinese nuclear exports. Both nations’ dominance in nuclear energy exports risks creating significant geopolitical imbalances, expanding their grip on critical energy sources while weakening Western influence over international energy security. The MDBs must rectify this problem to ensure a more geopolitically diverse financing model for nuclear power construction and operation in developing nations.

Breaking the logjam

MDBs must consider structural changes to bypass the veto power of its major players and begin funding nuclear energy projects. One option is to create a consortium of pro-nuclear states within the MDBs. These nations could create a separate fund for nuclear energy financing, independent of contributions from anti-nuclear nations. This would not be a complete fix—the bank’s broader policy against nuclear finance would remain unaffected—but it’s a crucial step in the right direction.

Outside of direct financial support, development banks do have other options. They can establish pathways for technical assistance for nuclear projects, similar to the Energy for Growth Hub’s nuclear trust fund proposal for the World Bank. This can include enlisting expert contractors as advisors to governments building nuclear power plants and fostering open dialogues on nuclear energy. By taking these steps, development banks can empower developing nations to harness nuclear power and create a more equitable energy future.     

Don’t hand adversaries a nuclear victory

The increasing dominance of Moscow and Beijing in global nuclear energy finance risks reshaping future energy affairs. It is time for MDBs to acknowledge nuclear energy as an essential tool to expand energy access. The World Bank and other multilateral organizations must reform their antiquated policies to support nuclear energy deployment and allow developing countries to more readily achieve economic growth. If they don’t, autocratic regimes willing to weaponize their energy dominance will eagerly fill the void.

Juzel Lloyd is an energy/environmental technology researcher at the Lawrence Berkeley National Laboratory and a former Atlantic Council Global Energy Center Women Leaders in Energy and Climate fellow.

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The post MDBs must finance nuclear power—or Russia and China will appeared first on Atlantic Council.

The frontier has become the front line.

Canada’s choice is binary: secure its portion of the Arctic or suffer the consequences of foreign powers acting with impunity in and around Canada’s Arctic. Ottawa’s central challenge, therefore, is to harden its Arctic presence with dual-use infrastructure and supply chain resilience while hostile powers increase their influence around the pole.

This task gets more difficult the longer Ottawa dithers because change manifests across many vectors concurrently. The infrastructure and supply chains critical to the region are underdeveloped and ill-suited for the future—and they do not improve with age. Climate change continues to alter the contours of the region, often to Canada’s strategic disadvantage. An ascendant generation of US strategists proclaim that the Canadian Arctic is the “new soft underbelly” of North America. And it is no longer fantasy to suggest that the Arctic is ground zero for the new ‘Great Game’ between the United States, Russia, and China.

The region has been one of strategic contest since 1921, when Joseph Stalin claimed the North Pole for the Soviet Union, a claim re-animated by Moscow in 2015. It may lack the trenches and dragon’s teeth in Europe, or the clashes between fishing vessels and coast guard ships in southeast Asia. But the Arctic is no longer a low-threat, low-force posture environment that can be defended by a couple Coast Guard icebreakers and some Canadian Rangers on snowmobiles.

It is a region of strategic consequence and likely to be more so in the coming decades, which begs the question—why does Canada lag allies and adversaries alike in both the defense and development of its Arctic territory?

The simplistic answer is that Ottawa is torn among competing interests and an inability, or an unwillingness, to marshal the domestic resources necessary to protect its Arctic from a growing cast of players keen to exploit perceived vulnerabilities in pursuit of their interests.

The Atlantic Council delved deeper into Canada’s challenge to bolster infrastructure and supply chain resilience in the region. Research included literature reviews, interviews, and off-the-record conversations with a broad range of government and private-sector stakeholders. Interviews yielded constructive, if passionate, views from respondents who expressed repeatedly how much they want Canada to secure its part of the Arctic and enable its full development.

Analysis revealed that Ottawa knows the region well; the Canadian government has few peers in understanding the Arctic and what is required to right supply chains there. Geological surveys and development plans are completed to a gold standard. Stakeholders know the problem and solution space—and have for decades. But domestic policy, not climate change or geopolitical calculus, is the primary factor influencing strategic decisions for Canada’s north.

Key players (and honorable mentions)

Climate change has made the Arctic accessible. Glacier melting has created new sea routes, extended shipping seasons, and unveiled vast natural resources. But it has also created an opening in the region for strategic contest. Three threat vectors shape the region’s security dynamics for Canada.

Russia

More than half of the Arctic Circle’s population and half its economy are Russian. Russia sits at the end of one of the Arctic’s most accessible regions. Russia is opening old bases and building new infrastructure throughout the region. It holds more than 50 percent of Arctic investment (made between 2017 and 2022), and its military doctrine treats the north as central to economic and national defense. Since 2014, the Kremlin has launched Cold War-style investments in Arctic airfields, radar systems, submarine networks, and year-round basing. Russian military planners are considering anti-access/area denial (A2/AD) domes extending over the Northern Sea Route.

Moscow likely observes that Canadian defense planning remains rooted in an outdated peace dividend mindset—one that grossly underestimates the threat of state-on-state conflict in the Arctic. Canada’s lack of comprehensive undersea surveillance renders its Arctic maritime approaches effectively blind, and its military presence in the region—symbolized by a modest footprint of Canadian Rangers—leaves much to be desired in terms of deterrence or rapid response. Equipment remains outdated, modernization plans languish in bureaucratic limbo, and logistics chains are stretched perilously thin. These gaps create space for Russian forces to maneuver below the threshold of war, exploiting ambiguity and Canada’s limited detection capabilities to assert influence or project force unchallenged.

The Kremlin likes to see how Canada’s strategic dependence on the United States substitutes alliance commitments for genuine sovereign deterrence. Ottawa’s whole-of-government approach—while inclusive in theory—has fragmented decision-making in practice, rendering Canada slow and reactive at a time when speed and coherence are strategic advantages. Indigenous consultation, while legally and morally necessary, remains procedurally rigid and politicized, often becoming a brake on critical national security decisions rather than a channel for partnership and empowerment.

While Russia invests heavily in its Arctic capabilities, Canada’s Arctic capability is stuck in the twentieth century. Surveillance assets are aging, space-based platforms are insufficient, and investment in modern ISR (intelligence, surveillance, reconnaissance) technology remains anemic. Communications remain unreliable across vast regions, exposing both civilian and military systems to disruption. Cyber defenses—especially around critical infrastructure—are poorly funded and unevenly deployed, inviting adversaries to strike via code rather than missile.

China

China considers itself a “near-Arctic power” and its Polar Silk Road links Arctic shipping to its global Belt and Road ambitions. China’s white papers frame the region as a commons to be commercially and scientifically accessed. Icebreaker construction in Chinese shipyards matches the tempo of a nation preparing for permanent presence.

Beijing understands that Canada’s economic infrastructure in the Arctic is brittle. Melting permafrost, seasonal reliance on ice roads, and a near-total absence of deepwater ports make northern logistics vulnerable to both climate and conflict. These choke points offer asymmetric opportunities to disrupt supply chains or sabotage dual-use facilities. China could exploit these vulnerabilities by embedding itself through ostensibly civilian investments in Arctic mining, telecommunications, or transportation infrastructure—investments that are strategic positioning by other means. In such a fragile environment, any hybrid attack or technological failure could sever vital arteries with catastrophic effects.

From China’s vantage point, Canada’s Arctic declarations are noble but hollow—bold in language but weak in execution. For Beijing, which has increased defense spending every year for three decades, Canada’s plan to reach two percent of gross domestic product (GDP) on defense spending by 2030 is symbolic. Procurement remains tangled in inefficiency and overregulation, hampering modernization and undermining operational readiness. Economic pressures, shifting political winds, and lukewarm support for military spending are likely to derail Canada’s commitments before they mature. Moreover, China likely sees Canada’s overreliance on its NATO allies as a strategic liability. The Arctic can be probed or pressured just below NATO’s collective defense thresholds—ensuring ambiguity, diffusing Western resolve, and highlighting Canada’s limited unilateral options.

Manpower shortages, insufficient Arctic basing, and the long-delayed Nanisivik port all point to structural underinvestment in hard infrastructure. These gaps offer Beijing a rich menu of asymmetric opportunities to: subvert Arctic economies through proxy investments; cultivate cultural ties through scholarships, research partnerships, and diplomatic outreach; sabotage digital and physical infrastructure through cyberattacks or dependency entrapments; and sow political dissent by financing Indigenous, environmental, or anti-militarization movements within Canada’s own democratic fabric.

The United States (and others)

For Washington, Canada’s failure to defend its Arctic territory is not merely a function of limited resources, but of deliberate strategic neglect. The refusal to acquire nuclear-powered submarines—essential for year-round under-ice patrols and true sovereignty enforcement—reveals a deeper aversion to the burdens of great power responsibility. While adversaries invest in undersea dominance and dual-use Arctic infrastructure, Ottawa opts for half-measures: diesel patrol submarines that can’t operate under the polar ice, minimal surveillance capabilities, and no permanent military basing north of 60.

The US view is shifting from a posture of “monitor and respond” to one of “prepare and deter.” Pentagon reports no longer downplay the Arctic as a region of strategic importance. Even smaller powers have taken notice. India published its Arctic strategy in 2021, emphasizing scientific diplomacy. Turkey signed the Svalbard Treaty to gain access rights to the Arctic in 2023. France and Germany are also exploring greater footprints in the region.

While the Icebreaker Collaboration Effort (ICE) Pact with Canada and Finland represents a trilateral effort to rebuild icebreaker capacity and harden the Arctic industrial base, it is not enough. Canada remains trapped in a peacetime posture and mentality—symbolic patrols and seasonal exercises—while the region becomes increasingly contested by powers that are, at best, are neutral to Canada’s concerns and, at worst, openly hostile to them.

This inertia is rooted in a political culture that prioritizes accommodation over assertiveness. Successive governments have deferred to progressive special interest groups whose influence blunts hard security policies. Environmentalist and Indigenous consultations, while important, are often weaponized procedurally to paralyze decisive action. The result is a government debilitated by process, one that speaks of sovereignty but shrinks from the instruments necessary to enforce it. Even modest defense initiatives face resistance if they challenge entrenched activist orthodoxies or require confronting Canada’s internal contradictions. This includes the legal quagmire of provincial and territorial jurisdiction in the North, which Ottawa remains unwilling to override or reform.

Perhaps most damning for Washington is Canada’s lack of strategic coherence. Ottawa provides a strategic framework for the Arctic but fails to dedicate the resources to achieve the objectives contained therein. Policy and strategy without resource commitments are unseriousness ideas. Moreover, Canada’s policies do not form a doctrine of Arctic deterrence, convey no idea on how to mobilize federal will, and fail to weave a unifying narrative that connects Arctic defense to the survival of Canada as a sovereign nation in an increasingly anarchic world.

America cannot—and will not—permit a soft underbelly to fester in a domain as critical as the Arctic. It is not inconceivable for US forces unilaterally securing parts of the Canadian Arctic in the event of a crisis. Such actions, while diplomatically uncomfortable, would be strategically necessary if Canadian gaps remain unaddressed. To be blunt: if pressed and in a fight with Russia or China in the Arctic, the US will almost certainly be “Elbows Up” in defense of North America, even if it offends Canadian sensitivities.

Five “cold kills”

Our research unearthed five factors that contribute to Canada’s Arctic inertia. Each of these “cold kills” continues to impede progress on increasing supply chain and defense resilience.

1. Lacking multipartisan consensus on the region as “ground zero” for a new “Great Game.”

Canada cannot do much in the Arctic if it lacks enduring political will to support and fund dual-use infrastructure over decades. The growing importance of the Arctic for great-power competition underscores the need for politicians, defense planners, local communities, industry partners, and other relevant stakeholders to walk in the same general direction, if not in lockstep. Despite the urgency of this task, no sustained, cross-partisan strategy for Arctic defense exists. Without it, investments, infrastructure development, and operational planning will almost certainly come up short. In 2025, Natural Resources Canada is projected to invest $12.1 million toward climate adaptation projects in the North—which is necessary, but insufficient when compared to similar efforts by other Arctic powers.

Yet, allies offer a contrast. Norway’s Arktis 2030 fund and its defense pledge of 3 percent of GDP underscore a whole-of-society approach. Finland’s NATO entry boosted its participation in Arctic exercises. Sweden utilizes Arctic data to create a stronger and better informed national defense policy. Denmark leverages Greenland’s geostrategic importance in its Arctic defense. While Canada’s Arctic is inaccessible by comparison, it can look at what NATO allies do right in the region and their whole-of-society approaches.

2. Placing too much of the strategic burden on local communities.

The Canadian government continues to place disproportionate responsibility for Arctic security on local communities, revealing a dangerous strategic asymmetry between rhetoric and capability. The Canadian Rangers, though a symbol of national resolve and cultural integration, are not a substitute for a modern, standing military presence. They are lightly armed, part-time volunteers—valuable in their knowledge of the land but structurally unfit to deter or respond to the increasing threats posed by adversarial state actors operating just beyond the line of sight. This over-reliance has created a strategic mirage: Ottawa appears engaged in Arctic defence, but the burden is unfairly borne by those with the fewest resources and the highest exposure.

In effect, Canada’s Arctic is not treated as an equal part of Confederation, but as a frontier outpost whose primary function is surveillance and symbolic sovereignty. The political imagination to raise Arctic communities to the standard of living of rural southern Canada is absent. There is no serious nation-building project underway—no long-term vision to tie infrastructure, broadband, energy, healthcare, and education in the North to the national grid of opportunity.

The region is home to significant deposits of iron ore, gold, diamonds, and rare earth elements. The Mary River Mine on Baffin Island is one of the world’s richest reserves of high-grade iron ore, producing millions of tons annually. Similarly, the Hope Bay and Meliadine gold mines contribute substantially to Canada’s mineral output. These resources are critical for economic development and for national security, given their importance in defense manufacturing and technology. Yet, the extraction and transportation of these resources are hampered by limited infrastructure that eludes further development due to lack of coordination and investment at all levels of government. While the Yukon Security Advisory Council can be a model for shared governance federal, territorial, and Indigenous jurisdictions overlap without coherent authority. The result is a bureaucratic bottleneck that limits response agility and accountability, especially in scenarios involving mass casualty events or foreign incursions below the threshold of war.

3. Misunderstanding the Arctic as a land- or maritime-centric domain, instead of a multidomain one.

Canada’s Arctic strategy remains anchored in a legacy mindset—fixated on land and maritime domains—while the battlespace has already expanded far beyond the ice and tundra. The Canadian Arctic is a multi-domain operating environment in the most rigorous sense: a crucible where air, sea, land, space, and cyberspace domains converge. Focusing primarily on ground mobility or maritime choke points is antiquated.

In an era defined by precision-guided conflict, gray zone incursions, and orbital competition, the North requires integrated deterrence across all domains. The space domain is already decisive; Russia and China have launched dual-use satellites optimized for polar reconnaissance, while Canada’s surveillance constellation remains limited and aging. Cyberspace, too, is an active front. Persistent foreign probing of Canada’s critical Arctic infrastructure—from power grids to fiber lines—underscores the need for zero-trust architectures and sovereign cyber capacity hardened against both disinformation and sabotage. The air domain, often overshadowed, remains underutilized despite offering cost-effective ISR opportunities via high-altitude, long-endurance drones and balloon-based sensors that can supplement space assets in degraded environments.

Canada must approach the Arctic as a multi-domain region. Infrastructure nodes at Iqaluit, Yellowknife, and Inuvik must be conceived not as mere logistics hubs, but as permanent and staffed bases in a broader multi-domain lattice of deterrence. Airfields should be hardened, satellites shielded, networks encrypted, and data fused in real time. The resilience and infrastructure footprint must be multi-domain: ISR in orbit, radar on ice, seaborne logistics hubs, and hardened cyber networks. It might even be cheaper to establish and easier to maintain air-based sensors to augment space-based sensors, such as high-altitude, long-endurance drones and high-altitude balloons.

4. Missing the point that infrastructure spending enables both military and local resilience.

Canada’s policy frameworks fail to grasp a foundational truth: infrastructure is not ancillary to defence; it is defence. Roads, railways, hospitals, and power stations in the Arctic are bulwarks of resilience and lifelines to national unity. The harsh environment demands more than token outposts; it demands permanence that begins with infrastructure designed for both civilian and military pursuits.

Canada’s persistent underinvestment in Arctic infrastructure can be attributed largely to sticker shock. Building in the north is expensive at the outset, but those initial costs conceal long-term value. Roads, railways, and ports that facilitate the movement of Canadian forces and provide necessary infrastructure for local communities also enhance NATO mobility and resilience.

The Grays Bay Road and Port Project is unlikely to open before 2035. Until then, the Port of Churchill remains Canada’s only Arctic deepwater port for more than 106,000 miles of coastline—and even it is more than 800 kilometres south of the Arctic Circle. The overland situation is equally stark. The long-considered Mackenzie Valley Highway remains unbuilt. Meant to replace unreliable winter roads and connect remote Arctic communities, the highway should be considered as a defense artery.

Moreover, the North needs cyber towers as much as radar domes; fibre optic cables as much as sonar arrays. Schools and post-secondary institutions—anchored by Arctic research centres—should be erected alongside hardened military installations to attract families, not just forces. In Alaska, the dual-use success of the University of Alaska Fairbanks and the Ted Stevens Anchorage International Airport provides a model: educational and aerospace ecosystems aligned with the broader security posture of the United States.

Still, there are signs of acceleration. The Department of National Defence has committed $230 million to extend the main runway at Inuvik Airport. The upgrades include modern lighting and arrestor systems—investments tailored for sustained military operations and a rare example of a concrete commitment in a domain often shaped by abstraction. Canada should build Arctic spaceports and drone launch facilities for persistent surveillance and communications dominance—assets that would likely qualify as defence expenditures under a broadened NATO definition. And that definition is evolving. With calls to raise the alliance-wide benchmark to five percent of GDP, the line between civil and military investment will blur. Forward-thinking allies are already redefining defence to include national resilience, critical infrastructure, and technological redundancy.

5. Failing to call out the need to achieve A2/AD capability.

Canada’s current Arctic strategy is more performative than purposeful. It remains anchored in rituals of presence rather than a doctrine of deterrence. The reasons are structural and cultural: A2/AD sounds too aggressive for a nation wedded to peacekeeping identity and constrained by intergovernmental jurisdictional frictions. But if Canada is to hold the Arctic, it must defend it—not merely inhabit it. That demands something Canada has never attempted: a comprehensive anti-access/area denial (A2/AD) strategy adapted for the circumpolar battlespace.

A2/AD refers to the deployment of integrated capabilities that prevent an adversary from operating freely within a region. This includes long-range fires, persistent surveillance, advanced radar, cyber denial tools, hardened command-and-control infrastructure, and air and maritime denial platforms. Canada does not mention A2/AD in its Arctic lexicon because it fears what it implies: that the North is no longer a sanctuary but a frontier. Building an Arctic A2/AD network would require political will, sustained investment, and a strategic mindset that accepts confrontation as a precondition for sovereignty. It would also provoke diplomatic risk—Russia would label such a move provocative, and China would test the perimeter with gray-zone maneuvers masked as scientific exploration or commercial navigation. Yet the absence of such a posture risks far greater cost: a hollow sovereignty, subject to erosion by increments.

Investments in some areas do not amount to A2/AD. True, Canada’s $38.6-billion commitment over twenty years to modernize NORAD is substantial. If fully implemented, this would be the largest reinvestment in continental defense since the early Cold War. Arctic over-the-horizon radar systems will track threats from the US-Canada border to the Arctic Circle. A more powerful polar variant will extend coverage into the Arctic archipelago and beyond. Crossbow—a classified network of advanced sensors—will supplement these systems with real-time precision. And the Defence Enhanced Surveillance for Space (DESSP) project will allow space-based tracking of adversary launch and maneuver capabilities. Canada has partnered with Australia on a next-generation Arctic early-warning detection system. But even these investments are insufficient; they do not achieve A2/AD in the Arctic. Canada has ISR blind spots, insufficient logistical depth, and infrastructure degraded by thawing permafrost. RADARSAT’s capabilities are aging; the Northwest Passage is functionally unmonitored. There is no cruise missile defense layer.

A Canadian A2/AD architecture would extend ISR reach from geostationary orbit to the ocean floor. At its core: Over-the-Horizon Radar (AOTHR), high-altitude drones, and advanced satellite constellations fused via a hardened C4ISR backbone. Any credible A2/AD structure must project deterrence not only northward but outward via NORAD, integrating seamlessly with allied efforts across the Greenland-Iceland-UK gap and the European High North.

Challenge and opportunity

We recommend the following six steps to shape decision-making vis-à-vis Canada’s Arctic. Addressing each of them is necessary for more resilient supply chains and robust infrastructure for defense of the Canadian Arctic.

1. Achieve enduring domestic political consensus.

Without sustained, bipartisan consensus on the strategic value of the Arctic, Canada’s northern policy will remain fragmented, underfunded, and vulnerable to reversal.

Canada should establish a nonpartisan Arctic Strategy Council, drawing on members from federal, provincial, territorial, and Indigenous governments, as well as the private sector. This council could be modeled loosely on the United Kingdom’s National Security Council, with a standing mandate to oversee and report on Arctic development milestones.

To correct course, Parliament should adopt a minimum percentage of GDP for Arctic infrastructure and defense investments—similar to how NATO’s 2-percent defense spending benchmark frames national priorities. A 0.5-percent GDP floor specifically earmarked for Arctic readiness would send a powerful signal to allies, adversaries, and Canadians alike.

2. Build permanent bases and infrastructure.

Sovereignty requires presence. Canada cannot assert command over its northern territory while maintaining a transient, seasonal military posture.

Canada must develop at least two permanent Arctic bases by 2035 and reinforce the air infrastructures in Yellowknife. These installations should support multi-domain enablers: ground forces, drone squadrons, ISR satellites, and cyber defense detachments. One proposed location is Resolute Bay in Nunavut—a strategic logistics point halfway through the Northwest Passage. Another is Tuktoyaktuk in the Northwest Territories, where the Inuvik-Tuktoyaktuk Highway provides ground access to the Beaufort Sea.

Canada need not sacrifice environmental stewardship to bolster its dual-use infrastructure in the region. On the contrary, the development of small modular reactors (SMRs) offers a way to meet energy needs in a sustainable and flexible manner. These compact, deployable energy systems would enable off-grid installations to power radar stations, bases, and airstrips—allowing the Canadian Armed Forces to operate autonomously across a vast and power-starved frontier.

Canada can and should discover best practices in other nations and adopt to the fullest extent possible. The Arctic Remote Energy Networks Academy is training a new generation in clean energy implementation, building the intellectual and technical foundation for sustainable Arctic energy systems. It is one example of innovation that can help make strides in the Arctic.

3. Reorient superclusters toward strategic innovation.

Canada’s innovation ecosystem is misaligned with its strategic realities.

To adapt, Canada must integrate Arctic operational challenges into supercluster mandates. The focus of these superclusters has strayed too far from core security imperatives, and redirecting their mandate toward the defense and security sector could allow Canada to reanimate its atrophied defense industrial base, stimulate Indigenous research and development, and provide a platform for strategic innovation drawn from academic and private-sector talent.

The Global Innovation Cluster for Advanced Manufacturing could sponsor development of modular Arctic housing for deployed forces. The Digital Technology Cluster could support remote communications networks hardened against magnetic interference. And the Protein Industries Cluster could help devise shelf-stable, high-calorie rations adapted to extreme environments.

Canada should establish a national challenge prize—modeled on the US Defense Advanced Research Projects Agency (DARPA) Grand Challenge—to spur innovation in climate-resilient infrastructure, Arctic mobility, and remote power generation. Such efforts should be coordinated by a Defence Innovation Agency akin to the United Kingdom’s Defence and Security Accelerator (DASA), ensuring alignment between technological output and operational need.

4. Integrate civil-military infrastructure.

Canada must adopt a whole-of-society approach to Arctic logistics—one that erases the line between civilian and military use.

Every kilometer of highway, every meter of runway, and every watt of power grid must serve dual purposes. Similarly, the Grays Bay Road and Port Project, which aims to connect the rich mineral fields of western Nunavut with the Northwest Passage, must be prioritized for its economic benefits and geopolitical value. Its completion would give Canada a second deepwater Arctic port—an essential node for resupply, power projection, and emergency response.

Meanwhile, the feasibility of Arctic spaceports must be considered thoughtfully. With global competition accelerating in polar orbit surveillance, Canada’s geography is a latent advantage. Nunavut and the Northwest Territories are prime candidates for launching satellites into sun-synchronous and polar orbits, a domain critical for ISR.

5. Accelerate NORAD modernization and ISR integration.

Canada must modernize its Arctic surveillance and early-warning capabilities through the renewal of NORAD and deep integration of orbital, aerial, and terrestrial ISR platforms.

Canada must move decisively to modernize its contributions to NORAD and integrate a layered, multi-domain ISR architecture that meets the threats of the 21st century. The existing North Warning System (NWS)—a relic of the Cold War—is functionally obsolete. It is increasingly vulnerable to kinetic destruction, electronic warfare, and deception by adversaries leveraging hypersonic, low-flying, and space-enabled strike platforms. While Canada has acknowledged this through its stated commitment to over-the-horizon radar (OTHR) and new space-based capabilities, progress has been halting, piecemeal, and under-resourced.

Canada should fast-track its involvement in key pillars of NORAD modernization alongside the United States by:

1. Over-the-Horizon Radar (OTHR): Advance procurement and installation of Arctic-facing OTHR systems based in Labrador and Nunavut to create a persistent early-warning envelope stretching across the polar approaches. These systems must be hardened against electromagnetic disruption and integrated into NORAD’s command-and-control nodes in real time.
2. Ballistic Missile Defence and the Golden Dome: Canada must shed outdated policy inhibitions and join the continental Ballistic Missile Defence (BMD) architecture. A Canadian contribution to a “Golden Dome” over North America—built on Aegis Ashore components, ship-based interceptors, and ground-based midcourse defence systems—would reinforce deterrence and mitigate the strategic vacuum currently inviting adversary escalation. Participation in the US Missile Defense Review and integration into layered BMD command structures should begin immediately.
3. Space and High-Altitude ISR: The integration of RADARSAT Constellation Mission (RCM) assets with Gray Jay microsatellites must be complemented by investment in high-altitude, long-endurance (HALE) UAVs, stratospheric balloons, and commercial space partnerships. Persistent polar orbit surveillance is not a luxury—it is the sinew of a sovereign Canadian deterrent.

A modern NORAD without a full Canadian partner is a NORAD weakened in scope, credibility, and political cohesion. In an age of hypersonics, space militarization, and AI-driven surveillance, Canada’s northern shield must be not just symbolic but steel-wrought—an active, intelligent barrier underpinned by the best minds and machines the alliance can field. The window to shape this future is closing fast. Canada must step forward now, not as a follower, but as a co-architect of North America’s defence.

6. Integrate the Arctic with broader national and allied defense postures.

Canada’s Arctic strategy must not be treated in isolation.

Canada must integrate its Arctic strategy into a broader, assertive national defence posture—one that acknowledges the indivisibility of Canadian sovereignty and its responsibilities as a G7 power. The Arctic is not a separate theatre, but the forward glacis of the North American fortress. What begins as radar coverage over Baffin Bay ends in deterrence posture from Vilnius to the Taiwan Strait. Canadian defence policy must therefore harmonize Arctic readiness with strategic power projection abroad, ensuring the nation can respond decisively to threats—whether they emerge from the Beaufort Sea, the Black Sea, or the South China Sea.

The Arctic remains critical—but it is not Canada’s only defence priority. A myopic focus on the North risks undermining broader global responsibilities. Canada must project credible force across multiple domains and theatres. That means integrating Arctic surveillance—through over-the-horizon radar, low Earth orbit satellite constellations, and AI-driven ISR—directly into NORAD’s early warning lattice. These capabilities must be interoperable with US Northern Command, NATO’s Arctic flank, and allied sensors in the Indo-Pacific. Surveillance is not enough; it must be paired with striking power and forward basing.

Strategic mobility and offensive reach are essential. Arctic airbases must be upgraded to sustain F-35 squadrons year-round, with rapid deployment capabilities for long-range precision fires and mobile expeditionary forces. Arctic-class naval platforms should anchor presence and power projection into contested waters, with the logistical depth to pivot between the Arctic archipelago and Pacific choke points. Canadian-built UAVs and high-altitude drones should patrol both the Northwest Passage and Western Pacific, forming a twin-hemisphere presence. Above all, Canada must act as a sovereign Arctic nation capable of defending its territory, while remaining a credible contributor to the rules-based international order. The Arctic is the crucible, but Canada’s responsibilities—and its enemies—do not stop at the pole.

Canada’s Arctic infrastructure and supply chain resilience are foundational components to its basic expression of sovereignty. But the future of the Arctic belongs to those who show up first and endure longest. The question is not whether Canada can afford Arctic sovereignty, but whether it can afford its absence.

Jeff Reynolds is a nonresident senior fellow with the Transatlantic Security Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security.

Kristen Taylor is an assistant director with the Transatlantic Security Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security.

This research was made possible by the generous support of the Canada Mobilizing Insights in Defense and Security (MINDS) program.

New Atlanticist Mar 10, 2025

Experts react: What Mark Carney means for the US-Canada relationship

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New Atlanticist May 1, 2025

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Elections Politics & Diplomacy

The Transatlantic Security Initiative, in the Scowcroft Center for Strategy and Security, shapes and influences the debate on the greatest security challenges facing the North Atlantic Alliance and its key partners.

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New reactors and national security

“Deploying Nuclear Reactor Technologies for National Security” is the most comprehensive of the four. It aims to speed the deployment of advanced reactors at Department of Defense facilities, in order to provide power for military installations and for operational energy. The executive order notes that the regulatory pathway will be through the United States Army and ambitiously calls for one reactor to be operational at a “domestic military base or installation no later than September 30, 2028.” It also calls for the deployment of advanced reactors at Department of Energy facilities, and it directs the US secretary of energy to designate artificial intelligence (AI) data centers that “are located at or operated in coordination with Department of Energy facilities . . . as critical defense facilities, where appropriate.” 

In a departure from what has been the US government’s de facto stance toward commercial nuclear fuel recycling in the United States (assuming that it refers to commercial reactors), this order calls for the US secretary of energy to “identify all useful uranium and plutonium material within the Department of Energy’s inventories that may be recycled or processed into nuclear fuel for reactors in the United States.” There are currently no domestic commercial fuel recycling facilities in the United States, and the partnership outlined in this order between the Department of Energy and industry will likely be a boon to US reactor companies looking to use recycled fuel, especially as competitor countries stand up their own recycling capabilities. The order then goes on to direct the Department of Energy to provide high assay low-enriched uranium (HALEU) for commercial reactors that are authorized to deploy at the department’s sites. This will add to the demand signal for HALEU fuel and strengthen the domestic nuclear fuel supply chain.

Importantly, the order excludes the Department of Defense and the Department of Energy from the National Environmental Policy Act (NEPA) for construction of advanced reactors on some federal sites. It also notes that there may be additional categories that will be excluded from adhering to NEPA. The Department of the Interior already has a number of categorical exclusions for NEPA (for example, for geothermal exploration) but does not yet have any listed for nuclear reactors. The rest of this order touches on interagency coordination, civil nuclear exports, and employee clearances.

Changes to the NRC

At first glance, the next executive order, “Ordering the Reform of the Nuclear Regulatory Commission,” appears more measured than news reports had predicted over the past few weeks. It mentions a reduction in force for the commission, but it notes that “certain functions may increase in size consistent with the policies in this order, including those devoted to new reactor licensing.” At the same time, the order directs the NRC to finalize a revision of its regulations and guidance documents, and this revision must be concluded within eighteen months. It also directs an eighteen-month deadline for final decisions on construction and operation applications for any type of nuclear reactor. It is difficult to see how an understaffed agency will be able to complete more work in less time.

Although the new executive order does not explicitly mention White House oversight of the NRC, it does note the involvement of the Office of Management and Budget (OMB) and especially the Department of Government Efficiency (DOGE) in reorganizing the NRC. These measures, combined with the February 18 executive order “Ensuring Accountability for All Agencies”—which already decreased the independence of the NRC—could likely reduce the NRC’s workforce and lessen its standing among global nuclear regulatory authorities. This could happen even as the White House directs it to hasten its regulatory processes to expedite the licensing and deployment of next-generation nuclear technologies.

The question of new testing

A third order, “Reforming Nuclear Reactor Testing at the Department of Energy,” directs the national laboratory system to reform its process for ensuring that reactor developers are able to test their reactors quickly and effectively. However, the document does not explicitly direct the national laboratory system to construct new test reactor facilities. The first Trump administration signed into law the Nuclear Energy Innovation and Capabilities Act in 2017, which addressed the need for a fast-neutron test reactor and resulted in the start of the Versatile Test Reactor (VTR) project at Idaho National Laboratory.* But Congress later defunded this project. Although the new order does not explicitly call for the construction of a new testing facility, its direction to increase capacity for testing new reactors may lead Congress to look again at the VTR project.

The broader nuclear base

Finally, “Reinvigorating the Nuclear Industrial Base” addresses well-trodden issues, such as workforce development and the restarting, completion, uprating, or construction of nuclear power plants. It also calls for a new report to address the fuel cycle, especially regarding high-level waste management, fuel recycling (including commercial recycling), isotopes, and enrichment and conversion. This new report would follow the Nuclear Fuel Working Group’s 2020 report “Strategy to Restore American Nuclear Energy Leadership,” which focused on the front-end of the fuel cycle as well as civil nuclear exports. The order also notes that the US secretary of energy shall update the department’s “excess uranium management policy to align with the policy objectives of this order and the Nuclear Fuel Security Act” of 2023, which was signed into law by US President Joe Biden. 

Based on these new executive orders and earlier announcements, the second Trump administration’s policies toward nuclear energy seem largely aligned with the policies of the Biden administration and the first Trump administration. The major shift that is reflected in this set of executive orders is the desire to conduct a reduction in force across government agencies and to weaken the independence of regulatory authorities, including the NRC. In the new orders, the Trump administration has articulated ambitious goals for rapid deployment of next-generation nuclear technologies; however, reducing personnel and funding for the NRC and the Department of Energy, along with weakening the NRC’s independence and global credibility, will make it challenging to realize the full potential of the US nuclear energy industry. 

Jennifer T. Gordon is the director of the Nuclear Energy Policy Initiative and the Daniel B. Poneman chair for nuclear energy policy at the Atlantic Council’s Global Energy Center.

Note: The Idaho National Laboratory is a donor to the Atlantic Council’s Nuclear Energy Policy Initiative.

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As the race for access to critical minerals accelerates—with US President Donald Trump declaring the minerals that power new technologies essential to US national security, and China flexing its control of mineral supply chains with export bans—the mineral-rich Democratic Republic of the Congo (DRC) is in the spotlight. But that light reveals a complicated picture: As major powers and neighboring states contend for access to the country’s tin, cobalt, and copper, the Rwandan-backed M23 paramilitary has seized control of large swaths of eastern Congo, and the specter of full-scale war looms. The DRC signed a minerals-for-infrastructure deal with China in 2007, and now a minerals-for-security or minerals-for-peace deal with the United States is in the offing. 

The DRC has a chance to break the so-called “resource curse” and use its mineral wealth to build the roads, power grids, health infrastructure, and more that will sustain a democratic, economically growing country in the years ahead. Other countries and investors have a chance to live up to their commitments to responsible sourcing of natural resources, and in so doing support good governance and regional peace. The alternative is a continuation of the bad patterns of the past, with the real risk of a new outbreak of violence along the same fault lines that produced the deadliest conflict since World War II.

We asked six experts how the DRC—and its global partners—can take this transformative path. Read on for analyses of the country’s business environment, the industrial potential of its critical minerals and other promising sectors, and peace and security throughout the country.

The business case for peace and democracy in the DRC is strong

By Dave Peterson

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Congo’s war and the critical minerals scramble are inextricably intertwined

By Mvemba Phezo Dizolele

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Critical minerals won’t transform lives in the DRC—a radical shift in security and economic governance will

By Rabah Arezki

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Partner perspective: The DRC’s vast potential extends beyond mining

By Thomas De Dreux-Brézé

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US investors must lead on responsible sourcing in the DRC

By Nicole Namwezi Batumike

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Better roads and stable power grids can unlock the DRC’s potential

By Calixte Ahokpossi

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The business case for peace and democracy in the DRC is strong

Dave Peterson is the former senior director of the Africa Program of the National Endowment for Democracy.

The Rwandan-backed rebel militia M23 has seized control of most of eastern Democratic Republic of the Congo (DRC) while the national army (known by its French acronym, FARDC) and international peacekeepers retreat. At least seven thousand civilians have been killed and thousands more raped. Two million displaced persons and refugees are fleeing for safety, joining some five million already displaced. The US embassy in Kinshasa has been attacked by angry mobs—and both strategic interests and American values are at stake.

The DRC is rich. With 111 million inhabitants in a geographical area the size of Europe, the country is blessed (or cursed) by $24 trillion in mineral resources such as copper, cobalt, lithium, gold, and diamonds, much of it crucial to the world’s transition to electric power, half of it exported to China, and much of it now controlled by Chinese investors. Congo has the world’s largest tropical forests after the Amazon and a vast river network that could power half the African continent; it also has enormous agricultural potential, gas, and oil.

And the DRC is where the greatest slaughter of human beings since World War II occurred just thirty years ago, even as atrocities continue to be reported daily in the country’s east. In addition to M23, more than a hundred militia groups terrorize the population. Rampant corruption sucks billions of dollars from the economy every year, and poverty, unemployment, illiteracy, and disease statistics place the DRC near the bottom of global rankings.

The Congolese people have begged for change. Democratic elections held on December 20, 2023, were won by the incumbent, Felix Tshisekedi. Although flawed in many respects, credible domestic observation groups, supported by the National Endowment for Democracy (NED) and others, concluded they reflected the will of the people. The elections were reasonably competitive and peaceful, a notable achievement compared to Congo’s nine neighbors, many among the most autocratic countries in the world. The elections raised the level of political discourse and further cultivated Congo’s democratic practice. Congo’s press is relatively free, so citizens can debate, organize, and criticize their government. The nation’s civil society is extensive, active, and skilled—advocating, educating, and mobilizing citizens on a host of issues.

Yet after another year in power, the second Tshisekedi administration has failed to resolve the conflict in the east, address rampant corruption, or improve governance. The human rights record is not reassuring, as NED’s Congolese partners and others have documented. More than one hundred kuluna, purportedly youth gang members ensnared by DRC’s notoriously corrupt justice system, were recently executed after the government reinstated the death penalty. Freedom of expression is also under pressure as activists, journalists, and whistleblowers are attacked and fear for their personal safety. Meanwhile, the president seems intent on tampering with the constitution to allow him to extend his term in office.

The mining companies, banks, and tech industry—aware of but loath to abandon the bloody supply chain they rely on—profit handsomely from Congo’s precious minerals. Although the conflict in the country’s east is about more than the trade in minerals, and international funders have spent hundreds of millions of dollars on the problem, the DRC’s best hope may be for foreign investors to mobilize pressure on the belligerents to make peace. The Belgian government has investigated Apple for tolerating human rights abuses in its supply chain originating in the DRC, and Apple has acknowledged the difficulty of identifying the sources of its suppliers. Because this is an issue for the entire industry, companies should find it advantageous, both in terms of public relations as well as in creating a conducive business environment, to be more accountable for the stability and prosperity of the communities from which they derive their wealth.

The Trump administration is paying attention. Tenuous negotiations between representatives of the Congolese and Rwandan governments led by the administration’s special envoy Massad Boulos may be making progress. To buttress this, Congolese civil society should be included in the process, including appropriate NGOs, community groups, the church, labor, and business, as proved successful in the Inter-Congolese Dialogue two decades ago. The DRC’s democratic aspirations should be the United States’ comparative advantage. The United States made mistakes in Congo, then called Zaire, during the Cold War, to the detriment of its own reputation, and it would be a shame to return to that era of zero-sum geopolitical competition. Security, strength, and prosperity are interests every nation pursues, but the United States can do better. Many Congolese, including civil society and political leaders, still see the United States as a force for good and a beacon of hope for ideals such as freedom, peace, democracy, justice, and human rights. It is what makes America strong: It is what makes the United States friends and allies, accords America respect and admiration—to be seen as a world leader rather than just another player, a model rather than a pariah.

The US private sector should take the lead. A golden age cannot be built on the blood of innocents, a course that can only lead to more hatred and suffering and will ultimately fail. The international business community must unite in committing to resource extraction practices that abide by international standards of human rights and transparency, incentivize the rival governments and factions in the subregion to lay down their arms, and make it easier and more profitable for companies to do their work. The private sector can rally international public opinion and pave the way for stability and prosperity. The long-suffering Congolese people deserve it.

Congo’s war and the critical minerals scramble are inextricably intertwined

Mvemba Phezo Dizolele is a senior fellow and director of the Africa Program at the Center for Strategic and International Studies (CSIS) in Washington, DC.

For the past thirty years, the world has viewed the Democratic Republic of Congo (Congo) through a binary lens of conflict and the exploitation of natural and mineral resources. The conflict optics magnify the insecurity that has characterized life in the eastern provinces of North Kivu, South Kivu, and Ituri. The protracted conflict between Congo and Rwanda spawned the proliferation of militias, including the two iterations of the Rwanda-backed M23, which captured the Congolese cities of Goma and Bukavu on January 25, 2025, and February 16, 2025, respectively. The death toll is estimated at more than seven thousand since January 2025, with unofficial reports from the region suggesting a much higher number of victims.

With 7.8 million internally displaced people, Congo ranks alongside Syria and Sudan among countries with the largest displaced populations, according to the United Nations. Of the more than two million people who have been displaced since the 2022 resurgence of M23, one million were displaced in 2024. Sexual violence, disappearances, and other human rights abuses have increased in M23-occupied areas. These abuses will continue as the rebels expand their territorial control.

Coverage of the conflict has also emphasized the role of natural and mineral resources as drivers of the war. Congo’s resource endowment is valued at a staggering $24 trillion. Analyses of the war have focused on the looting and smuggling of minerals, and have pointed to Rwanda and Uganda as primary beneficiaries. The two countries have emerged as major exporters of minerals, such as gold and coltan, of which they have limited reserves.

Recently, heightened interest in Congo’s mineral resources has been driven, among other reasons, by the West’s determination to circumvent China and secure critical resources like cobalt, copper, and lithium. For instance, on February 18, 2024, the European Union (EU) signed a Memorandum of Understanding on Sustainable Raw Materials Value Chains with Rwanda. Even though the EU signed similar memoranda with Congo, Zambia, and Namibia, Rwanda’s case raised questions given the country’s troubled history with Congo concerning mineral resources. This history includes invading Congo, arming violent rebel groups, and smuggling minerals out of rebel-controlled territory.

The second element driving high-profile interest in the country’s mineral wealth is the Trump administration’s classification of critical minerals as vital to US national security. The pursuit of a US-Congo minerals-for-security deal underscores Washington’s increased interest in Congo’s mineral endowment. As the world waits to learn about the contours and substance of the contract and what the United States will offer Kinshasa, it’s worth taking stock of the current foreign investment landscape in the country.

China tops the list of major investors with important financial and technical commitments to Congo’s mining sector. Besides China, the other major players who have established significant footprints in the country include the EU and the United States.

China leads in the mining and infrastructure sectors

China’s investments in DRC focus on the mining sector, with major stakes in the cobalt and copper industries. The engagement stems from the 2008 Sicomines joint venture between Chinese companies (Sinohydro and China Railway Engineering Corporation) and the Congolese government. The venture is the foundation of the Congo-China cooperation. Originally valued at $9 billion, the deal is a minerals-for-infrastructure barter. After pushback from the World Bank, the International Monetary Fund, and Congolese civil society organizations, the deal was renegotiated to $6 billion in 2009. In exchange for mining rights, China has financed infrastructure projects, including roads and hospitals. In 2024, Chinese infrastructure investment commitments were valued at $7 billion. Today, China is the largest investor in the country.

United States seeks minerals for national security

Until the advent of the second Trump administration, the United States showed little interest in DRC minerals and focused on the humanitarian challenges of the country. Western companies that secured mining deals often sold their holdings to the Chinese. With every Western business divestment, the Chinese increased their stake in Congo’s mining sector. The new policy change has generated interest for greater US-Congo cooperation. This minerals-focused change is supported by a robust diplomatic engagement that seeks to broker peace between Congo and Rwanda. The administration’s stated objective is to stabilize Congo and create the right conditions for investments in mining and infrastructure.

The new US approach is yielding early results. On May 6, 2025, California-based KoBold Metals and Australia-based AVZ Minerals reached an agreement for the former to acquire AVZ Minerals’ interests in the Manono lithium deposit in Congo. Billionaires Bill Gates and Jeff Bezos back KoBold. The agreement will enable the company to invest over one billion dollars to develop the lithium project.

It is difficult to evaluate the level of current US investments in Congo. US pledges of multi-billion-dollar investments depend on the promises of peace accords between Rwanda and Congo and related bilateral mineral agreements.

European Union focuses on ethical approach to critical minerals

European countries’ approach in Congo focuses on ethical sourcing and sustainability, which also include traceability of minerals due to armed conflict. European development banks have funded projects that improve governance and reduce poverty. Some of these initiatives, however, have faced criticism. For instance, in light of the resurgence of M23, the February 18, 2024, memorandum the EU signed with Rwanda—“establishing close cooperation with Rwanda” on the sourcing of critical minerals—has raised questions about the EU’s commitment to ethical sourcing, given that Rwanda backs the violent M23 paramilitary group. Analysts of the Great Lakes region, diplomats, and members of the European Parliament have all questioned and challenged the intent and effect of the memorandum. Some see it as a driver of the re-emergence of the M23 and the current war between Congo and Rwanda.

Top European investors in Congo include France, the Netherlands, and Italy, who contributed a combined foreign direct investment stock of approximately $32.6 billion in 2022.

Comparative overview of investments

As the scramble for critical minerals enters a new phase with increased US interest in Congo, the country needs effective governance and transparent policies to ensure that foreign investments contribute to sustainable development and economic growth.

Critical minerals won’t transform lives in the DRC—a radical shift in security and economic governance will

Rabah Arezki is a distinguished fellow at the Atlantic Council’s Freedom and Prosperity Center. He previously served as chief economist and vice president for economic governance and knowledge management at the African Development Bank, as well as chief economist for the Middle East and North Africa region at the World Bank, and as chief of the commodities unit in the research department at the International Monetary Fund (IMF).

The Democratic Republic of Congo’s abundance of critical minerals has given rise to comparisons with Saudi Arabia’s oil wealth. But that abundance has not improved citizens’ lives in one of the poorest countries in the world. Yet there is a course that could make that possible: finding the right balance between openness to investments from multinational corporations and economic sovereignty—broadly defined as the ability of a country to control its own economic system.

The DRC is the repository of the world’s largest reserves of critical minerals such as cobalt, copper, and lithium. Indeed, the DRC holds around 70 percent and 60 percent of the world’s cobalt and lithium reserves, respectively, as well significant deposits of nickel and uranium, which are metal components for energy generation and batteries for electric vehicles. Yet the DRC encapsulates the seemingly insurmountable and intertwined challenges posed by critical minerals. These challenges are tied to geopolitics, conflicts, and the environment as well as economic and social dimensions.

First and foremost, the challenge facing the DRC is the new geopolitics around critical minerals. The demand for critical minerals is exploding. According to the International Energy Agency, demand for minerals is projected to increase by more than four times by 2040 amid the transition from fossil fuels to renewable energy. Major powers—namely China, the United States, and the European Union—are engaged in a technological race spurring competition for access to these critical minerals. At the center of that global scramble is the DRC, which is being courted by these powers like never before. China is heavily invested in the mining sector of the DRC and controls the supply chains of critical minerals, including their processing.

Amid the technological race, China has recently imposed restrictions on exports of critical minerals to the United States. Washington and Brussels have tried to challenge Beijing’s monopoly of the supply chains of these minerals by attempting to secure mining contracts, including in the DRC. That competition should in principle help the DRC to not only get a fair share from the mining contracts but also the opportunity to move up the value chain. In practice, multinational corporations and foreign governments have much stronger capacity in negotiating mining contracts relative to the government of the DRC. Quid pro quos are also common involving the receipt of aid packages originating from self-interested donor countries in exchange for the awarding of mining contracts to multinational corporations—linked to donors.

Another major challenge for the DRC is conflict. The DRC is faced with external and internal conflicts. The DRC has a complex history: Once known as the Belgian Congo, it experienced a cruel form of colonization as the de facto personal property of Leopold II, Belgium’s king. The DRC’s post-independence era was plagued by direct interventions by foreign powers and autocratic rulers. That history helps explain the DRC’s deficient institutions, a persistent low level of trust among citizens, and distrust between the citizenry and the government.

The DRC has long faced massive violence and crimes in mineral-rich provinces such as Katanga and North Kivu—fueled by neighbors such as Rwanda and Uganda. The advances of Rwanda-backed M23 rebels in eastern Congo is alarming for the DRC and could fuel a “major continental conflict.” The Trump administration is actively pushing for a peace deal between the DRC and Rwanda to end the violence. This peace deal appears to be contingent upon the two countries each signing a bilateral economic agreement with the United States involving mineral extraction and processing. The peace negotiations are at an early stage, but these efforts are welcome especially if they lead to an outcome perceived as just.

Minerals are routinely smuggled out of the DRC. Add to that illicit artisanal mining—mining done, generally on a small scale and with low-tech tools, by individuals not employed by a mining company—as a tug of war between the authorities and citizens directly grabbing minerals. As a vast territory, it is imperative for the DRC to expand and strengthen the governance of its security sector to secure its borders and confront armed groups operating on its territory. The DRC is nominally a centralized republic, and it needs to find the right balance for revenue sharing between the different provinces and the central government to reduce internal tensions.

Further, the extraction of critical minerals is leading to significant environmental and health hazards. Indeed, extraction is often associated with deforestation, loss of biodiversity, and the use of toxic chemicals (including mercury), which are polluting ground water sources. Add to that child labor in the extraction of critical minerals, with children and women facing health degradation and abuse. The weak enforcement of environmental and social standards in the DRC is very concerning. A global debate is raging over the boycott of critical minerals emanating from zones of conflicts and forced labor. These boycotts alone are unlikely to sway the DRC’s government to do right by its citizens, but multinational corporations and foreign governments may be more susceptible to pressure.

These multifaceted challenges may seem insurmountable, but that should not deter the government of the DRC. To confront these challenges, the DRC must find a balance between outward- and inward-facing institutions. On the outward-facing front, the government needs to get its fair share of revenues from the extraction of minerals and attract investment in processing domestically. To do so, the government needs to deploy utmost transparency in its dealing with multinational corporations and foster the right human capital to match the capacity on the other side.

On the inward-facing front, the DRC needs to also ensure it is redistributing the proceeds of the revenues from the extraction of critical minerals to its citizens to ensure economic justice. To do so, the government of DRC needs to improve the allocative and technical efficiency of its spending. The government of DRC should pursue further its local content policy (designed to ensure that extractive industrial activity benefits the region where the resources are found) by localizing the processing of critical minerals. A useful example is the case of Botswana, which acquired a 15 percent stake in the world’s biggest diamond miner, DeBeers, which helped lock in local diamond-cutting activities.

This would represent a radical system shift in the DRC’s economic governance apparatus—and such a shift is imperative, in security as well as economic governance. Without that radical shift, the benefits of critical minerals won’t reach the people of the DRC. The Trump administration peace proposal could provide a pathway to a just peace and security between DRC and its neighbors, most notably Rwanda.

US investors must lead on responsible sourcing in the DRC

Nicole Namwezi Batumike is a gender and responsible sourcing specialist at the Congolese nonprofit Panzi Foundation.

The ongoing conversations between the United States and the DRC over access to critical minerals present a rare and urgent opportunity to reset the terms of engagement with Congolese stakeholders and the broader mineral ecosystem. US officials have indicated that American and other Western companies are prepared to make multi-billion-dollar investments in the region once the bilateral mineral deals are finalized. The DRC holds vast reserves of cobalt, copper, and other strategic minerals essential to global technological and energy systems, yet for decades, the Congolese people have borne the costs of extraction without sharing in its benefits, treated as collateral in deals driven by geopolitical rivalries and elite bargains. On top of fueling instability and deepening marginalization, these transactional arrangements have also exposed investors to growing legal, financial, and reputational risks.

Experience shows that when mining fails to deliver value to local communities, companies lose their social license to operate, along with the legitimacy of the regimes they once depended on. In turn, those regimes have proven willing to shift allegiances in pursuit of regime security. The DRC, for example, has filed lawsuits against downstream tech giants and pushed for sanctions targeting neighboring countries laundering conflict minerals. It is increasingly clear that the Congolese regime is not bound to any single partner.

US engagement in Africa must reflect geopolitical realities. Recent peace deal discussions show the United States is willing to engage Rwanda’s refining sector—despite Kigali’s documented role in violating Congolese sovereignty and committing war crimes. If responsible sourcing is to truly guide stable engagements, policymakers must reckon with the risks of endorsing impunity and failing to deliver justice for the Congolese people.

The negotiation of a US-DRC mineral deal offers a crucial opportunity to break this cycle, provided Kinshasa resists the historical pattern of leveraging minerals solely for regime survival, and provided the United States supports a model of genuine security: one not rooted in a logic of extractivism but in mutual accountability and the rule of law. By aligning US investment strategy with Congolese legal frameworks and responsible sourcing standards, both countries can lower risks by forging a sustainable model.

Responsible sourcing is a legal and strategic imperative

Meeting international due diligence standards to ensure that a given business activity does not involve human-rights violations has shifted from being a reputational safeguard to a legal and strategic requirement. Standards include the Organisation for Economic Cooperation and Development Guidelines and the United Nations Guiding Principles on Business and Human Rights. Human rights due diligence is now codified through laws such as the European Union’s Corporate Sustainability Due Diligence Directive, France’s Duty of Vigilance Law, and Germany’s Supply Chain Due Diligence Act, making risk mitigation binding across global operations, especially in high-risk contexts like the DRC.

Yet despite these frameworks, the DRC remains at war, and the global minerals trade continues to serve short-term political and economic agendas. In 2024, the US Government Accountability Office reported that Section 1502 of the Dodd-Frank Act (America’s flagship due diligence law) had not reduced violence in eastern Congo and may have exacerbated conflict around artisanal gold-mining sites. The US government’s insistence on better outcomes demonstrates that due diligence is a means, not an end, and it cannot resolve the structural drivers of the conflict.

The DRC’s mining codes provide a responsible framework for US investors

It is in this context that the DRC’s 2018 mining code emerges not as an obstacle but as a strategic foundation. On top of aligning closely with international expectations for human rights due diligence, the code offers investors and companies a clear, locally grounded framework to manage risk and build sustainable partnerships. Born out of years marked by revenue leakage, extractive impunity, and donor-driven liberalization, the code reasserts the government’s dual roles as a regulator and shareholder while mandating local beneficiation (a part of mineral processing). It raises royalty rates on strategic minerals like cobalt, introduces a “super-profits” tax, and makes community development contributions legally binding. It also restricts the use of “stabilization clauses,” which limit countries’ ability to apply new regulations to investors with agreements signed before the regulations went into effect, and strengthens environmental and social accountability.

Pilot models offer early lessons in responsible sourcing. For example, at Mutoshi in the Lualaba province, the collaboration of multinational commodities group Trafigura with Chemaf, a Congolese company, and Pact, an international nonprofit organization, showed that formalizing artisanal mining not only met sourcing commitments but also helped contribute to de-risking efforts. Meanwhile, the Panzi Foundation’s Green Mining Community Model, an initiative led by Nobel Peace Prize laureate Denis Mukwege, links inclusive training in responsible sourcing and value addition with investments in essential infrastructure like health and education. By seeking to address the root causes of conflict and the violent tactics it enables—such as the use of rape as a weapon of war—the Green Mining Community model promotes integration and community empowerment, positioning responsible sourcing as a pathway to long-term stability and shared value.

Opportunities and challenges in the US policy landscape

The United States is on the path to establishing promising policies and frameworks for responsible investment, as demonstrated by the bipartisan BRIDGE to DRC Act, which emphasizes governance and transparency. Initiatives such as the US-backed expansion of the Lobito Corridor* linking the DRC to Angola’s Lobito port, alongside previous efforts like USAID’s Just Gold project, could provide a strong foundation. However, their long-term impact will depend on aligning with fair labor and environmental standards, sustainable development, and, importantly, the continuity of these efforts under the new administration.

At the same time, setbacks like the 180-day suspension of Foreign Corrupt Practices Act enforcement must be urgently addressed. Restoring accountability is essential for ethical investment.

As US Rep. Sara Jacobs highlighted in a March 2025 Africa Subcommittee hearing, investments will only succeed in the long term if they do not ignore the root causes of exploitation.

The Democratic Republic of the Congo stands at a pivotal juncture: either the cycle of extractive exploitation continues, or the government leverages its mineral wealth to foster long-term development. For US stakeholders, the way forward lies in transparent, law-abiding, and community-centered partnerships. This requires a commitment to the DRC’s 2018 Mining Code and collaboration with Congolese civil society. While short-term gains may be tempting, only those who embrace responsible sourcing and inclusive models will build sustainable, competitive advantages.

Better roads and stable power grids can unlock the DRC’s potential

Calixte Ahokpossi is mission chief, Democratic Republic of the Congo, for the International Monetary Fund (IMF).

The Democratic Republic of the Congo has vast economic potential, but infrastructure gaps remain a major constraint. The country is rich in natural resources and has a large and young population that could drive its development. However, chronic underinvestment in critical infrastructure—roads, rail networks, and power generation—continues to stifle economic progress. Additionally, governance challenges, corruption, macroeconomic instability, and recurring shocks—including armed conflicts in its eastern region—exacerbate fragility.

Addressing these challenges requires tackling their sociopolitical and economic roots, while leveraging the country’s vast natural resource wealth to rapidly bridge the infrastructure gap and foster diversified and sustained economic growth and poverty reduction. The DRC needs an ambitious infrastructure agenda, prioritizing the development of transport corridors and stable power grids.

Weak, unevenly distributed infrastructure

The DRC’s road network is severely underdeveloped, limiting mobility and trade. With only 152,400 kilometers (km) of roads, connectivity remains a challenge. The roads serve the nation’s vast 2.45 million km² territory, a road-to-territory ratio that is just 40 percent of the sub-Saharan African average of 0.14 km/ km², which is already low compared to other regions. Fewer than 10 percent of these roads are passable year-round, and more than half of Congolese (54.5 percent) must travel over an hour to reach a paved or asphalted road. Urban-rural disparities are stark. In the southeast (Haut-Katanga and Lualaba), large-scale copper and cobalt mining has spurred some investment in roads and rail lines, but the transportation infrastructure remains vastly insufficient for a region that supplies most of the world’s cobalt and a significant share of global copper. Indeed, the DRC accounts for over 70 percent of global cobalt output and approximately half the world’s proven reserves. In contrast, the eastern provinces (North and South Kivu, Ituri)—rich in gold and the “3T” minerals (tin, tantalum, tungsten)—receive minimal investment, as small-scale artisanal mining dominates, offering limited economic spillovers.

The DRC remains one of the least electrified nations despite vast hydropower potential. Only 19.1 percent of the population has access to electricity, with rural coverage plummeting to a mere 2 percent. The country is heavily dependent on two aging hydropower plants: Inga 1 (with an installed capacity of 351 megawatts) and Inga 2 (installed capacity of 1,424 MW), both under rehabilitation and operating at roughly 80 percent capacity. These plants primarily serve the mining industry. Ambitious projects like Inga 3 (3,000 to 11,000 MW) and the even larger Grand Inga (which could surpass China’s Three Gorges Dam) underscore the Congo River’s vast potential. Yet delays, shifting international partnerships, and environmental concerns have repeatedly stalled construction.

A barrier to inclusive growth

Weak infrastructure inflates costs, constrains businesses, and fosters economic disparities. Poor infrastructure raises transportation and production costs, stifling economic activity in time-sensitive sectors (like perishable goods). This is evident in agriculture, which employs the majority of Congolese (over 60 percent of the labor force). Despite the DRC’s fertile land, poor transport links prevent farmers from bringing their surplus produce to markets. Goods perish on farms, and the country remains dependent on food imports, making it vulnerable to global food price shocks and exchange rate fluctuations. These disruptions fuel inflation, disproportionately affecting the poorest. The weak transportation network also restricts economic diversification and limits access to remote mineral deposits, leaving critical resources untapped—or controlled by armed groups.

Unreliable energy supply disrupts businesses and limits opportunities for local transformation and adding value. From irrigation systems to medical clinics, power shortages affect essential activities and reinforce a cycle of poverty and missed opportunities. They also hamper industrialization, making local mineral processing, manufacturing, and daily business operations difficult or virtually impossible. Mining companies report that frequent power shortages force them to rely on diesel generators, raising production costs substantially. This inefficiency hits small businesses even harder, eroding profit margins and reducing corporate income tax revenues. Under these conditions, the DRC’s ambition to increase local mineral processing and move up the value chain remains a major challenge.

Five steps to good roads, reliable power, and economic growth

1. Invest in transport and energy infrastructure to generate sustainable growth. The DRC’s vast mineral wealth and energy potential make it an attractive destination for large-scale private investment, but various bottlenecks such as infrastructure, business environment, and governance must be addressed. We focus here on infrastructure ones. Unlocking the hydropower potential (100,000 MW, which is 13 percent of the world’s total) could meet domestic needs and generate export revenue. Modernizing existing hydroelectric facilities and expanding transmission grids would provide clean, affordable electricity to both industry and households. For the mining sector, improved energy access could lower production costs while enhancing compliance with global environmental, social, and governance standards. Meanwhile, broader electrification would fuel local enterprise, boost economic diversification, and improve living standards.
2. Diversify financing for the substantial investments needed to bridge the infrastructure gap. The International Monetary Fund estimates that achieving universal electricity access would require annual spending of 5.9 percent of gross domestic product (GDP), while ensuring that 75 percent of the population lives within two kilometers of an all-season road would necessitate 14.9 percent of GDP annually over ten years. Given these costs, leveraging diversified public, private, and international financing is key to accelerating infrastructure development.
3. Strengthen public investment management to maximize returns. Weak governance and public investment management have led to waste, corruption risks, and substandard project execution. Strengthening investment governance would maximize value for money, boosting private-sector confidence and investment. Equally key is creating fiscal space for critical infrastructure and social and human capital investments. This requires improving domestic tax and nontax revenue collection and prioritizing growth-enhancing spending. Yet low revenue collection, especially relative to peer countries and the DRC’s economic potential, remains a major constraint.
4. Pursue prudent, strategic government borrowing to secure favorable terms. Domestically, containing inflation would lower borrowing costs and encourage higher domestic savings, strengthening the local financial market. Externally, the focus should remain on concessional financing, prioritizing low-cost, long-term loans. Over time, as policy credibility strengthens and the country’s creditworthiness improves, access to international financial markets could be considered, particularly when global conditions are favorable.
5. Scale up infrastructure investments through regional partnerships. The DRC would benefit from harnessing regional frameworks such as the East African Community and the Southern African Development Community to mobilize resources for transport and energy infrastructure. Cross-border energy grids and trade corridors can reduce operational costs, attract larger financing and enhance the country’s global competitiveness. Regional collaboration offers a pragmatic solution to tackling infrastructure deficits while strengthening economic resilience. Also, the development of the Lobito Corridor,* linking the DRC to Angola’s Lobito port, can deepen regional integration and offer more cost-effective transportation routes for DRC’s exports—though it will be important to avoid undermining parallel port development projects in the western part of the DRC.

In sum, the future of the DRC will be promising if its development challenges can be addressed in an ambitious and realistic manner. Developing a reliable road network and extending electricity provision will be critical to reap the DRC’s vast potential—and will need to be supported by sound macroeconomic policies and reforms to strengthen the country’s resilience to overcome its fragility.

Launched in 2022, the Africa Center’s programming on the DRC seeks to advise on securing the country’s governance and to raise awareness of the economic opportunities in the DRC. In partnership with Rawbank, the Africa Center analyzes the DRC’s business environment, the industrial potential of its critical minerals, and peace and security throughout the country.

*Rawbank, which supports the Atlantic Council Africa Center’s work on the Democratic Republic of Congo, has an equity stake in the Africa Finance Corporation, which leads the development of the Lobito Corridor.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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The post Beyond critical minerals: Capitalizing on the DRC’s vast opportunities appeared first on Atlantic Council.

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As AI and data centers expand demand for power, natural gas and coal alone can’t meet future needs, while current solar and battery supply chains carry security risks. To resolve these challenges, the United States should expand domestic manufacturing of advanced energy technologies while maintaining natural gas—and, possibly, coal—production in the near term.

To win the AI race against the Chinese government, US energy policy must shift from a climate-first lens to one that prioritizes national security and securing a growing supply of power. To do so, Congress should pass the Future Usable Energy Legislation—Artificial Intelligence (FUEL-AI) Act, which would prioritize key national security interests such as providing power for key AI hubs like Northern Virginia’s Data Center Alley, streamlining permitting, modernizing transmission and the grid, supporting domestic energy manufacturing, and incentivizing energy efficiency technologies.

Energy and the race for AI supremacy

Whether the AI race is a sprint or a marathon, both paths demand massive amounts of new electricity. Though energy is a small share of AI costs, it’s a critical operational constraint: data centers can’t run without power.

While acknowledging profound uncertainties, top forecasts project data centers and AI-driven electricity demand could reach 4.6–9.1 percent of total US consumption by 2030, up from 4 percent today. If the sprint scenario holds, only fast-to-deploy sources like solar and batteries can keep pace with demand.

Even in the marathon scenario of broad AI adoption, the United States will likely need large amounts of new electricity—fast. Relying on natural gas and coal alone to power AI won’t work. Natural gas turbine production is constrained, and no major coal plant has opened since 2013. Supply chain constraints, profound grassroots opposition, and investor reluctance make new coal capacity unlikely.

Even though gas and coal will play a major role in powering US AI, a gas and coal-only strategy won’t succeed. In the worst-case scenario, insufficient electricity generation could create shortages and necessitate persistent brownouts that were last seen in the United States in the 1970s. Even if those dire conditions don’t materialize, however, higher domestic natural gas prices would reduce the competitiveness of US liquefied natural gas and pipeline gas exports. But the impact of a natural gas and coal-only approach would be felt most acutely by consumers, since residential electricity prices are already outpacing inflation. 

Rural Americans would be hit hardest by rising electricity costs and poor reliability. They spend 4.4 percent of household income on energy—versus 3.1 percent in metropolitan areas—and face more outages.

Fueling AI with a summer peaking resource

In both AI sprint and marathon scenarios, solar and battery storage are highly suitable for meeting rising demand due to their speed, low cost, scalability, and geographic flexibility.

Solar is highly capable for matching data centers’ peak summer demand, especially in warm-weather markets. In Northern Virginia, home to 13 percent of all reported data center operational capacity globally, regional solar generation typically peaks in the summer—matching peaks for both commercial data centers’ cooling needs and residential consumers’ electricity consumption.  

Solar’s flexibility makes it ideal for data center clusters, as it requires minimal infrastructure and no resupply. China appears to recognize solar power’s strategic value, concentrating rooftop solar in coastal provinces and deploying at least 3,000 megawatts of capacity at the dual-use Shigatse Peace Airport near the Indian border.

Strengthening solar cybersecurity

China’s dominance of solar supply chains poses security risks, especially given solar power’s importance for AI. Reports of Chinese-made inverters with unexplained communication equipment underline the dangers, as such devices could destabilize the grid—a risk the US Department of Energy has long flagged.

However, inverter threats are just one among many. The Chinese government and other adversaries already have broad ability to target US and partner infrastructure. Cybercriminals operating in Russia attacked Colonial Pipeline, while China has been linked to  Mumbai’s 2021 blackout, malware found in US power and water systems, a still-unexplained transformer interdiction in Houston, and crypto mines operating near US military sites. Indeed, Chinese firms are estimated to own one-third of US crypto mining infrastructure and supply the vast majority of its machinery. Furthermore, ERCOT, the operator for most of the Texas grid, warns these high-load operations can worsen grid events, turning low-voltage issues into frequency control problems.

China’s role in software and hardware supply chains poses sabotage risks. Just as Russia weaponized energy in Ukraine, Beijing could exploit electricity systems in a Taiwan conflict. The United States should assess the inverter threat by reviewing installed units, ramping up inspections of Chinese-connected devices, and conducting other risk mitigation and software hygiene measures.

Instead of fruitlessly seeking to eliminate vulnerabilities and establish perfect security across pipelines, crypto mines, and inverters, however, the United States must rely on deterrence, threatening proportionate responses if China conducts electricity sector sabotage.

Replace the Inflation Reduction Act with FUEL-AI

The AI race with China carries immense stakes and uncertainty. To compete, the United States will need vast new electricity generation—regardless of whether the race is a sprint or a marathon. This requires an all-of-the-above energy approach: natural gas, coal, and advanced technologies like solar, batteries, advanced nuclear, and wind.

The United States should replace the Inflation Reduction Act with FUEL-AI, shifting focus from climate to national security. FUEL-AI would make it easier to build new energy infrastructure by streamlining permitting and modernizing transmission. Additionally, it would support domestic energy manufacturing for key national security technologies, such as transformers and advanced batteries; and prioritize power demand and supply measures at AI hubs like Northern Virginia’s Data Center Alley.

These reforms could attract bipartisan backing. Both parties oppose the Chinese government and support strategic technologies like nuclear power and transformers, while US advanced energy supply chains support hundreds of thousands of jobs and hundreds of billions of dollars in investment. Reorienting energy policy toward AI competitiveness can unite national security and economic priorities without abandoning the advanced energy technologies of the future.

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and Indo-Pacific Security Initiative, and editor of the independent China-Russia Report. This article reflects his own personal opinion.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Joseph Webster

Senior Fellow, Global Energy Center

Global Energy Center Indo-Pacific Security Initiative

Central Asia China

New Atlanticist Apr 11, 2025

Want to understand the US-China trade war? Start with soybeans and batteries.

As Washington and Beijing hit each other with new tariffs, two goods—soybeans and lithium-ion storage batteries—offer a window into the larger trade war.

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Issue Brief Mar 21, 2025

To win the AI race, the US needs an all-of-the-above energy strategy

By Joseph Webster

To ensure US AI leadership, the United States must harness all forms of energy, allow a level playing field, and remove red tape constraining the buildout of critical enablers, especially transmission lines and grid enhancing technologies.

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EnergySource Mar 6, 2025

How shifting political leadership, war, and generative AI are shaping the energy outlook: Insights from the 2025 Global Energy Agenda

By Landon Derentz, Christine Suh, Bailee Mathews

Political shifts, heightened conflict, and the growth of generative AI are transforming the energy system. Leadership perspectives and survey results from the Atlantic Council’s 2025 Global Energy Agenda provide a valuable roadmap for adapting to the evolving energy landscape.

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The post Replace the Inflation Reduction Act with FUEL-AI appeared first on Atlantic Council.

Total US data center energy use is estimated to reach 325 to 580 terawatt-hours, or 6.7 to 12 percent of the total US energy demand, by 2028. To date, much of the supply has been sourced from traditional, carbon-heavy sources like coal and natural gas.

However, meeting the additional electricity demand while ensuring that energy grids are resilient and sustainable in the long term will require diversifying energy sources. Geothermal energy offers a promising solution for stable, reliable baseload power. But to unlock its full potential, the US government must take action to reduce the barriers to entry for industry.

Unearthed potential

Geothermal energy has numerous advantages over other renewable sources. Most immediately, it is a reliable, constant source of power as it relies on heat sources unaffected by atmospheric changes. In addition, it has a limited land footprint (per unit of power generated), minimal workforce requirements, and flexible generating capacity. Geothermal’s advantages make it an ideal complement to intermittent sources of energy such as solar and wind. With its load-following capacity—the ability to adjust power output depending on demand—geothermal can stabilize the grid, ensuring continuous power. Its resilience to weather-related disruptions, due to being located underground, further strengthens its role in maintaining grid stability amid climate volatility.

Despite providing reliable power generation for over a century, geothermal sources currently account for just 0.4 percent of US electricity generation. Naturally occurring or conventional geothermal systems are geographically limited, primarily found in the western United States. But next-generation emerging technologies may enable access to new sources in other locations. Conventional geothermal systems rely on heat sources, water, and natural fractures. But next-generation technologies, such as enhanced geothermal systems and closed-loop systems, use engineered fractures or closed wellbore loops to circulate fluids for energy capture where fractures do not naturally exist. These innovative approaches can unlock up to ninety gigawatts of clean, reliable power by 2050, dramatically expanding geothermal energy’s role in the US power grid.

Incremental advancements have also enhanced the efficiency of current geothermal technologies. For instance, drilling speeds at the US Department of Energy’s Frontier Observatory for Research in Geothermal Energy (FORGE) site have improved by over 500 percent in just three years, substantially cutting well-development costs. Such advancements bring geothermal closer to being cost competitive, with future projects potentially lowering operating costs by 17 to 30 percent by 2030.

Widely supported

Geothermal technology currently enjoys bipartisan Congressional support. The House of Representatives passed HR 6474, a bill that would amend the Energy Policy Act of 2005 to speed up geothermal development by offering categorical exclusions for environmental reviews in areas with prior drilling. The bipartisan bill—sponsored by US representatives Michelle Steele (R-CA) and Susie Lee (D-NV)—has been referred to the Senate Committee on Energy and Natural Resources.

Another bill that has been introduced in support of geothermal development is the HEATS Act, which would exempt certain geothermal activities on state and private lands (excluding American Indian lands) from needing federal drilling permits, provided the operator has a state permit. Additionally, the Supercritical Geothermal Research and Development Act, introduced in November, seeks to advance research into geothermal systems that use water at temperatures and pressures above its critical point (around 374 degrees Celsius and 221 bar) to increase its energy generation potential. Although neither bill has passed, they highlight the growing interest in geothermal technologies in strengthening US energy independence.

Furthermore, there are signs of the US administration’s support for geothermal, with Energy Secretary Chris Wright having pointed to geothermal as an important tool for US energy security and job creation.

Equally important is the tech sector’s growing engagement with geothermal energy. Google recently partnered with NV Energy, a major Nevada utility company, to develop what it calls a “Clean Transition Tariff.” Under the model, NV Energy would enter into a power purchase agreement to acquire energy from a geothermal plant operated by Houston-based Fervo and sell it to Google at a fixed rate (that includes the “tariff,” or cost of the partnership). This model could be adapted by other data processing companies to lower operating costs and reduce carbon footprints.

But barriers to entry remain

Despite its immense potential, geothermal energy faces significant hurdles that slow its widespread adoption. A major challenge is the substantial upfront investment required for geothermal projects. Drilling is a costly process, involving multiple stages—exploration, confirmation, and development—each demanding significant capital.

Another challenge for the geothermal industry is the lengthy and unpredictable project development process (which takes an average of seven years), driven by strict federal permitting regulations. Unlike oil and gas, which benefit from categorical exclusions for exploration, geothermal developers must undergo full environmental reviews at multiple stages, including both exploration and development.

How to unlock US geothermal potential

To fully realize the potential of a promising US geothermal energy market, the US government must take coordinated, concerted action to lift the nascent industry over those initial barriers to entry:

• Empower program offices: To address the financial barrier to entry, the Department of Energy released, in its Commercial Liftoff Report, a two-phase plan for the full-scale deployment of next-generation geothermal approaches. The first phase focuses on building investor confidence in the market viability of geothermal, with an estimated investment of $20 billion to $25 billion. The second phase focuses on broadening geothermal’s footprint across the United States, requiring over $200 billion in investment. Initial investment remains a key hurdle, so the administration must empower dedicated program offices, such as the Department of Energy’s Geothermal Technologies Office and Loan Programs Office. Greater autonomy in these organizations can help de-risk projects, foster innovation, and reduce high upfront costs by addressing financial, technological, and resource-related challenges.

• Streamline the permitting process: With strong bipartisan support for geothermal energy, Congress should pass the HEATS Act to accelerate the geothermal permitting process. The government should aim to enable exploration, drilling, and resource confirmation within twelve to eighteen months of a company starting the permitting process.

• Expand federal research, development, and demonstration grants: To achieve breakthroughs in next-generation geothermal, continuous research, development, and demonstration are crucial. Congress should pass the Supercritical Geothermal Research and Development Act, currently before the House Committee on Natural Resources, to fuel innovation and development for this emerging technology.

• Build a robust geothermal innovation ecosystem: To unlock the full potential of next-generation geothermal, the US Department of Energy should lead the creation of a coordinated innovation ecosystem that brings together federal and state agencies, Congress, project developers, financiers, researchers, and communities. Such an ecosystem is essential to align policy, funding, and deployment priorities; streamline permitting; and build public trust. A Geothermal Innovation Council, led by the Department of Energy and supported by dedicated congressional funding, could formalize cross-sector collaboration, accelerate project pipelines, and ensure that geothermal development is equitable, efficient, and scalable.

Sudeep Kanungo is a nonresident senior fellow at the Atlantic Council’s GeoTech Center.

William Larivee is a resident fellow at the Atlantic Council’s GeoTech Center.

The authors would like to acknowledge the contributions made to this article by the Atlantic Council GeoTech Center Nonresident Senior Fellow Mahmoud Abouelnaga.

Issue Brief Feb 19, 2025

Unlocking America’s untapped energy potential through enhanced geothermal systems

By Chase Thalheimer, Reed Blakemore

Enhanced geothermal systems (EGS) offer a promising clean energy solution by overcoming geographical and cost barriers, providing emissions-free, reliable power while supporting US decarbonization and energy security efforts, but widespread adoption requires government support, investment, and streamlined regulations.

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GeoTech Cues May 8, 2024

One hundred years of energy transitions

By Mahmoud Abouelnaga

Thousands of energy leaders, technology developers, and climate advocates gathered in Rotterdam, Netherlands from April 22-25 along the 26th World Energy Congress. Looking back at the first Congress, then called the World Power Congress, in London in 1924, global energy systems looked very different. In 1924, global oil production was around 2.8 million barrels per […]

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The post To build tomorrow’s power grid, the United States should look to geothermal energy appeared first on Atlantic Council.

Earlier this week, US President Donald Trump made headlines by stating what many Iranians have known for years: a corrupt “water mafia” has looted the nation’s resources while its leaders have “managed to turn fertile farmland into dry deserts.” He underscored the regime’s role in fueling the crisis, declaring that “their corrupt water mafia—it’s called the water mafia—causes droughts and empty riverbeds. They get rich, but don’t let the people have any of it.”

For millions of Iranians displaced by environmental degradation and water scarcity, it was the first time a sitting US president openly echoed what whistleblowers and environmental advocates have been shouting for decades.

The term “water mafia” has been used by Iranian journalists, scientists, and activists for more than a decade to describe a powerful and politically connected network responsible for pushing ecologically catastrophic megaprojects. These actors thrive on opacity, benefiting from unchecked dam-building, wasteful water transfers, and the relentless overextraction of groundwater, often under the guise of development and national security. Trump’s remarks may have been blunt, but they captured the essence of the crisis: Iran is not just running out of water, it is being robbed of it.

The aftermath of the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal offered a clear warning. Billions of dollars flowed back into Iran, yet no serious reforms followed. Instead, environmental destruction accelerated. Expensive dam-building and ill-conceived water transfer projects continued unchecked, groundwater depletion worsened, and land subsidence spread across critical plains. Agricultural practices remained wasteful, and environmental priorities were ignored.

In the Islamic Republic, the reflexive belief that crises can be drowned in money has repeatedly backfired. Over the past four decades—particularly since the Iran-Iraq War—financial windfalls without transparency, accountability, or public participation have fueled corruption, exacerbated environmental damage, and triggered deeper social unrest. Funds intended for resilience and renewal have instead bankrolled inefficient megaprojects, enriching politically connected contractors while pushing the country’s ecosystems closer to collapse.

Parliament and oversight bodies have long been reduced to hollow institutions, offering little more than a façade of accountability. Public dissent—especially from provinces ravaged by water scarcity—has been met with suppression, not solutions. Now, with the prospect of ongoing US negotiations delivering some sanctions relief, the economic arm of the Islamic Revolutionary Guard Corps, the Khatam al-Anbiya Construction Headquarters, stands ready to tighten its grip. Under the banners of “development” and “poverty alleviation,” it will likely expand its empire of megaprojects—ventures that, without environmental safeguards or transparency, have consistently deepened corruption, entrenched inefficiency, and accelerated environmental collapse.

Widespread corruption and lack of oversight

Water governance in Iran is tightly controlled by the Supreme Water Council—a body that exists more as a rubber stamp for elite interests than a forum for sustainable planning. Dominated by the Ministry of Energy, with the president or vice president merely present in name, the council has consistently prioritized unsustainable development over ecological integrity. In practice, it has functioned as a front for the water mafia—an entrenched network of bureaucrats, contractors, and cronies whose goal is profit, not preservation.

The Ministry of Agriculture, as the largest water consumer, is a major influencer within this council. Civil society and non-governmental organizations are almost entirely excluded from decision-making, and local stakeholders lack the ability to prevent resource destruction. The Department of Environment, while occasionally voicing concerns, has been reduced to a ceremonial role.

Most large-scale water projects in recent decades have either bypassed environmental permits or obtained them under pressure, often through compromised processes involving firms with direct ties to the water mafia. In cases where local courts attempted to intervene, rulings were ignored or overruled by higher judicial officials loyal to political interests. Environmental defenders and whistleblowers who challenge these projects face intense security pressures, harassment, and, in many cases, exile.

Powerful consulting firms, many of which have long benefited from insider connections, have greenlit projects that have devastated entire ecosystems, displacing upstream communities, triggering deforestation, damaging cultural heritage sites, salinizing rivers, depleting aquifers, and contributing to widespread land subsidence in urban and agricultural zones alike. From Tehran to Isfahan, cities are literally sinking under the weight of institutional negligence. These aren’t development projects—they’re environmental crimes disguised as infrastructure. And if sanctions are lifted and new capital flows into the system without strict oversight, the water mafia will seize the opportunity to expand its empire, accelerating Iran’s ecological collapse.

IRGC involvement

The Islamic Revolutionary Guard Corps (IRGC), through its Khatam al-Anbiya Construction Headquarters, has become Iran’s largest and most politically untouchable contractor, positioned squarely at the center of what many now call the “water mafia.” This deeply entrenched network includes senior officials within the Ministry of Energy, politically favored consultants, and powerful construction and engineering firms. Shielded by military influence and judicial complicity, they operate with near-total impunity. Whenever a major dam or inter-basin water transfer project is launched, Khatam is either directly involved or quietly profiting through layers of subcontractors. Although sanctions have constrained some of its operations in recent years, the IRGC has routinely sidestepped these limits by deploying a spiderweb of front companies to keep cash and construction flowing behind the scenes.

Any future sanctions relief would give Khatam and the broader IRGC-industrial complex even greater control over state development budgets, further emboldening the water mafia. Since its post-1989 transformation, engineered by former President Akbar Hashemi Rafsanjani and sanctioned by Supreme Leader Ali Khamenei, Khatam has overseen disastrous megaprojects.

Those include the Karkheh and  Gotvand dams, which have inflicted irreversible ecological damage across Khuzestan. Its inter-basin water transfer schemes, including the Garm-Siri project, not only jeopardize domestic water security but risk igniting future disputes with Iraq over shared river systems. Far from alleviating Iran’s water crisis, the JCPOA-era influx of capital largely served to reinforce the very machinery driving the collapse.

Lack of environmental impact assessment

Today, major multinational projects funded by international loans typically require rigorous Environmental Impact Assessments (EIAs) to ensure that long-term benefits outweigh ecological and social costs. In Iran, however, EIAs have become a hollow formality. They are often conducted by firms with vested interests in project execution, many of them closely tied to the water mafia. There is little to no independent review, and virtually no public scrutiny.

In many cases, projects begin without any assessment at all. Only after public outrage or activist pressure do authorities scramble to produce retroactive EIAs—by then, the damage is often done. The Gotvand Dam remains one of the most damning examples: its post-construction mismanagement of saline layers in the reservoir has created a chronic, man-made disaster.

Then there’s Lake Urmia—once the largest lake in the Middle East, now a stark reminder of systemic mismanagement. Over forty dams and multiple diversion tunnels throttled its inflows, all while upstream expansion of water-intensive crops like sugar beets continued unchecked. Climate variability may have accelerated the decline, but the collapse was largely engineered. Today, it’s exposed salt flats that feed dust storms that damage farmland, corrode infrastructure, and pose serious public health risks across the region.

Despite the efforts of environmental activists and a handful of parliamentary investigations, Iran’s annual budget continues to greenlight hundreds of new projects without proper assessments, many pushed through by consulting firms and contractors aligned with the water mafia. Without strict environmental conditionalities and oversight, sanctions relief will only accelerate this destructive trajectory, handing more capital to those who profit from ecological collapse.

More recently, the water mafia has set its sights on large-scale seawater desalination projects—particularly along the Persian Gulf and the Sea of Oman—without seriously accounting for the massive carbon footprint or the ecological harm to already stressed marine ecosystems. These projects are not only energy-intensive and environmentally hazardous, but the plan to pump desalinated water to central Iran comes with astronomical upfront and long-term maintenance costs. For the water mafia, however, it’s a goldmine: billions in unaccountable contracts, minimal oversight, and endless opportunities for profit—another expensive illusion sold as a solution.

The absence of a comprehensive plan

Countries facing severe water scarcity have developed innovative governance models that Iran could learn from—not by copying policies wholesale, but by embracing their core principles.

After enduring the Millennium Drought, Australia implemented the Murray–Darling Basin Plan, establishing basin-level governance and water trading systems to balance ecological sustainability with agricultural needs. Singapore, lacking natural freshwater sources, has become a global leader in integrated water management through its “Four National Taps” strategy, which includes water catchment, desalination, imported water, and wastewater recycling (NEWater). Spain utilizes river basin councils (Confederaciones Hidrográficas) that involve stakeholders from various sectors in decentralized water decision-making. Israel, situated in one of the world’s most arid regions, has achieved a high level of water security through a mix of technological innovation and strict efficiency standards, including the reuse of over 85 percent of its wastewater for agriculture.  

These models share a commitment to transparency, adaptability, and inclusive governance—qualities that are currently lacking in Iran’s centralized and opaque water management system. For Iran to address its escalating water crisis, it must shift from supply-centric megaprojects to participatory and sustainable resource management.

The billion-dollar question: What should be done?

With sanctions relief, poor water governance, inefficient management, and structural corruption will not disappear. Scientists like Kaveh Madani, head of the United Nations University’s Institute for Water, Environment and Health, believe that Iran has become a water-bankrupt nation due to misguided policies, weak governance, and decades of poor management. Even if billions of dollars are released, absent a genuine will for reform, these resources will merely accelerate the execution of costly, unnecessary, and environmentally damaging projects.

A system resistant to methodical review and structural rebuilding will only collapse faster when flooded with money. The core problem lies in decision-making behind closed doors, the exclusion of public participation, and neglect of environmental imperatives.

To change course, Iran needs immediate, transparent, and measurable actions:

• Halt all projects lacking legitimate environmental assessments.
• Mandate the public release of water resource data and project budgeting details.
• Reform budget allocation laws to prevent the approval of scientifically unjustified projects.
• Establish an independent national body composed of experts, academics, farmers, and civil society actors to oversee and redefine macro water policies.
• Pilot participatory governance models in critical watersheds to lay the groundwork for institutional learning and environmental democracy.

Ultimately, drafting a comprehensive, sustainable national water plan—regularly reviewed and adapted—is crucial for restoring balance to Iran’s fragile environment. As long as policymaking focuses on “increasing water supply at any cost” rather than preserving and optimizing resources, every newly injected dollar will only deepen the crisis, not resolve it.

Nik Kowsar is an Iranian-American journalist and water issues analyst based in Washington, DC. He produces and hosts a weekly TV program on Iran’s water crisis. He is also known for his past work as a political cartoonist.

The post Feeding the ‘water mafia’: Sanctions relief and Iran’s water crisis appeared first on Atlantic Council.

Building on the Atlantic Council’s previous report on the nuclear innovation ecosystem, this new report by Kemal Pasamehmetoglu explores the role of the United States in establishing a full domestic nuclear fuel cycle.  

Fellow

Kemal Pasamehmetoglu

Nonresident Senior Fellow, Nuclear Energy Policy Initiative

Global Energy Center

Energy & Environment Nuclear Energy

Report Feb 24, 2025

Atoms for Appalachia: The role of nuclear energy in economic development

By Lauren Hughes

Advanced nuclear technologies can drive economic security and energy security within Appalachian states.

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1. Investment in US energy and manufacturing

Last month, the United Arab Emirates (UAE) committed to investing $1.4 trillion in the United States over the next decade. Some of the investments in the package have already been announced, including a recent commitment by Emirates Global Aluminum to fund the construction of a smelter in the United States. If built, it would be the country’s first new aluminum smelter in thirty-five years and could potentially double US production. Trump will likely push the UAE to announce additional plans to invest in US manufacturing, infrastructure, and energy production, with petrochemicals, steel, and battery production likely targets.

Trump is expected to press Saudi Arabia to announce where it intends to invest the $600 billion that Crown Prince Mohammed bin Salman committed to during a post-inauguration call in January. Just like during his first term, Trump said that if Saudi Arabia agreed to large purchases of US products, he would make the country his first foreign visit. Now, he will look to hammer out the specifics, which will likely include purchases of military equipment in addition to investments in infrastructure, technology, and mining.

2. Nuclear energy cooperation

Saudi Arabia has tried to start a domestic nuclear power program since 2006. It has signed multiple agreements with various contractors and consultants—but with very little progress other than a small research reactor in Riyadh due to come online soon. Saudi Arabia has engaged with Chinese companies to explore domestic uranium mining and enrichment—a potentially problematic move from the perspective of the International Atomic Energy Agency (IAEA) because it can easily lead to weapons production.

However, there are signs that Saudi Arabia is now interested in complying with IAEA standards. Last August, Riyadh agreed to IAEA spot inspections designed to ensure that weapons are not being developed, potentially paving a pathway for cooperation with the United States. Last week, the Trump administration announced that it was dropping the Biden administration’s demand that Saudi Arabia normalize relations with Israel as a condition for civil nuclear cooperation negations, putting Saudi nuclear power back on the table. At stake may be commitments from Saudi Arabia to use US companies and American-made materials to build future reactors, as well as deals to supply Saudi-produced critical minerals to US customers.

3. Pumping more oil

Trump has been extremely vocal about his desire to lower oil prices. While US producers don’t want to see prices fall below the sixty dollars per barrel range (breakeven prices in the most productive shale basins are currently in the low to mid sixty dollars per barrel range), consumers would welcome lower gasoline prices this summer. Middle East producers seem eager to help, as OPEC+ recently committed to increase production by 411,000 barrels per day in June and is expected to recommit to gradually put more oil on the market at its ministerial meeting at the end of May. It is unlikely that Trump will press the Gulf countries to make additional commitments, but he will expect them to follow through—and will likely say so to the press.

4. LNG purchases

Trump is likely to push Gulf countries to expand their orders for US liquefied natural gas (LNG). Kuwait and Iraq already import US LNG and Bahrain just received its first cargo last month. Both Kuwait and Bahrain want to buy more LNG to meet high domestic electricity demand over the summer while natural gas outputs decline. Trump should push them to sign long-term offtake agreements with US LNG companies rather than rely on spot market purchases. This will ensure that these countries continue buying US gas even when more LNG become available from nearby Qatar, which is expanding its production.

This should be an easy sell to Kuwait, which is already in talks with the Australian company Woodside to buy a 40 percent stake in its Louisiana LNG terminal. Kuwait is aiming to secure LNG supplies from this project, but even with assistance from the Trump administration, it won’t be fully operational until the early 2030s. Trump should push Kuwait to sign additional offtake agreements, with the idea that if Kuwait does find itself oversupplied with LNG in the future, it can always resell cargos on the spot market.

Strategically, announcing at least two new LNG agreements with Middle Eastern countries will help the Trump administration’s position as it presses Europe to move forward with long-term offtake agreements for US LNG. Europe has been dragging its feet over concerns about emissions reporting, even though Europe needs US gas to replace the Russian LNG it currently buys. Trump can use LNG deals with Middle Eastern consumers to pressure Europe to commit to US purchases before winding down imports of Russian LNG. This would also help Trump pressure Russia to negotiate on Ukraine, as it would further squeeze Moscow’s income.

It isn’t just business

The focus of Trump’s visit to the Middle East may be on strengthening economic ties, but it is tough to ignore the backdrop of rising geopolitical tensions, particularly regarding Israel, Iran, and the Houthis. Business, trade, and energy markets are important to both the president and the leaders of the Gulf countries he will be meeting, but so are security and diplomacy. In Trump’s mind, business and geopolitics operate in tandem and everything is up for negotiation.  It should not come as a surprise to see energy deals, trade negotiations, sanctions enforcement and even weapons sales materialize in concert.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource Mar 7, 2025

The US can reduce Russia’s nuclear energy—and geopolitical—influence

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EnergySource Feb 24, 2025

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Central Europe Eastern Europe

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The post Four energy deals Trump will look to make on his Middle East trip  appeared first on Atlantic Council.

However, an analysis of the applicable international and US environmental requirements for DSM reveals that, in practice, the risks to deep sea ecosystems would prohibit DSM from proceeding under current laws.  

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Why pursue deep sea mining? 

DSM is focused on collecting polymetallic nodules (PMNs) that look like potatoes and contain critical minerals that currently are sourced from mining on land. A patch of the Pacific Ocean called the Clarion-Clipperton (CC) Zone, which covers more than 4 million square kilometers, may hold more cobalt, nickel, and manganese reserves¹ than are available on land. 

What rules govern DSM? 

DSM in the CC Zone and elsewhere beyond national jurisdiction is regulated by the International Seabed Authority (ISA) under the United Nations Convention on the Law of the Sea (UNCLOS), to which most United Nations members are parties. The ISA has entered into 15-year exclusive rights contracts for DSM exploration with 17 contractors looking at PMNs in the CC Zone.  

The United States is not a party to UNCLOS and cannot sponsor DSM exploration contracts beyond its national jurisdiction, but it and other nations can pursue DSM on their continental shelves, as countries like the Cook Islands are doing. No country is currently mining in the CC Zone, but Nauru is trying. 

But the United States has its own applicable laws on DSM: the US Deep Seabed Hard Mineral Resources Act and the US Outer Continental Shelf Lands Act.  

So, what do international and US laws say about whether DSM is permissible? 

United Nations Convention on Law of the Sea 

UNCLOS addresses environmental protection for seabed activities. It directs the ISA to adopt rules for “the prevention of damage to the flora and fauna,”² to disapprove exploitation where “substantial evidence indicates the risk of serious harm to the marine environment,”³ and to include measures “necessary to protect and preserve rare or fragile ecosystems as well as the habitat of depleted, threatened, or endangered species and other forms of marine life.” ⁴ 

International Seabed Authority 

The ISA has issued final rules for exploration⁵ and draft rules for exploiting⁶ deep sea resources. Both regulations require a “precautionary approach” (Principal 15 of the Rio Declaration on Environment and Development) and prohibit activities in international waters that would cause “serious harm,” which both rules define to be any effect which represents a “significant adverse change in the marine environment.” 

US Deep Seabed Hard Mineral Resources Act 

The United States has its own DSM policy in the Deep Seabed Hard Mineral Resources Act (DSHMRA). This awkward and long-dormant statute prohibits any person under US jurisdiction from exploration or commercial recovery in international waters unless the activity “cannot reasonably be expected to result in a significant adverse effect on the quality of the environment.” That standard is incorporated in regulations. Despite the obvious schism with UNCLOS and objections from the ISA and UNCLOS parties including China and Russia, Canada’s The Metals Company, encouraged by the White House, announced in March that it will apply for a DSHMRA permit to mine in the CC Zone. 

US Outer Continental Shelf Lands Act  

The Outer Continental Shelf Lands Act (OCSLA) applies to any DSM activities on the 13 million square kilometer US “outer continental shelf”—including Pacific territories where PMNs are found. OCSLA and its regulations have several environmental standards addressing exploration and also requiring mining operations to be “designed to prevent serious harm or damage to … any life (including fish and other aquatic life), property, or the marine, coastal, or human environment.” The potential for DSM in US territory is not an idle consideration. A company named Impossible Metals made an unsolicited request for a lease in 2024 to mine PMNs offshore American Samoa, and has reportedly resubmitted the proposal to the Trump administration, which is likely to be more receptive to the idea. 

In sum, the environmental takeaways under these laws are similar:  

• Don’t mine if there will be “serious harm” to the environment (UNCLOS). 

• Don’t mine if there could be a reasonable expectation the activity will “result in significant adverse effect on the quality of the environment” (DSHMRA). 
• Don’t mine if there is “a threat of serious, irreparable, or immediate harm or damage to life (including fish and other aquatic life) … or to the marine, coastal, or human environment” (OCSLA).  

Would DSM meet these standards?  

Out of concern for environmental impacts of DSM, the International Union for Conservation of Nature (IUCN)—a leading global conservation organization with governmental members, including the United States—approved a resolution in 2020 calling for a moratorium on DSM in international waters. To date, 32 nations have called for a ban or moratorium on the practice. 

Studies have shown that the habitats of PMNs teem with exotic and little-understood life. One seminal article estimates that over 6,000 multicellular species occur in the CC Zone, living on and among the PMNs. About 90 percent are probably still undiscovered to science. Each mining operation is likely to remove⁷ PMNs from hundreds of square kilometers each year of operation. If the PMNs disappear, so will these animals, potentially including pink “Barbie” sea pigs and other species that the Natural History Museum of London’s scientists have discovered. 

Things go slowly in the deep sea. The PMNs form over millions of years. This is the oldest of old growth—if it is stripped away, the nodules would probably take the same millions of years to come back, if ever. 

DSM impacts besides habitat removal include dispersion of animals, noise, and possible oxygen depletion. During DSM testing, contractors primarily use self-propelled collectors that leave tracks and produce sediment plumes with potentially far-reaching consequences⁸ for the marine environment. One recent study found some small and mobile animals commonly found in sediment everywhere in the CC Zone had re-colonized testing track areas after 44 years, however, large-sized animals that are fixed to the sea floor were still very rare in the tracks, showing little signs of recovery. Impossible Metals proposes to hover and pluck the nodules, but its technology is untested at scale. 

The CC Zone is huge—4.2 million kilometers have commercial potential and 3.4 million⁹ are considered particularly attractive for mining. This is an area larger than Alaska, Texas, California, and Montana combined, and the abundance and diversity of life forms vary substantially across it.  

What’s the takeaway?  

No experienced and objective environmental regulator could reasonably conclude that DSM, as now proposed, would meet the environmental standards of UNCLOS, DSHMRA, or OCSLA.  

With new technology, greater understanding of the deep sea environment, and advancements in artificial intelligence, future DSM efforts may be able to selectively harvest PMNs with less impact. But for now, deep sea mining does not pass the environmental tests of the laws that apply. 

William Yancey Brown is a nonresident senior fellow at the Atlantic Council Global Energy Center. From 2013–2024, Brown was the chief environmental officer of the Bureau of Ocean Energy Management in the US Department of the Interior, where he oversaw the implementation of NEPA.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource May 5, 2025

Make critical mineral spending matter this time  

By Ashley Zumwalt-Forbes

The United States has a crucial opportunity to translate large-scale funding into critical mineral stockpiling and resilient supply chains—but only if Congress structures spending to create durable markets. Without clear demand signals, real commercial offtakes, and price stability, proposed funding risks falling short of delivering on its potential.

Energy & Environment Energy Markets & Governance

EnergySource Apr 15, 2025

Central Asia’s geography inhibits a US critical minerals partnership

By Haley Nelson and Natalia Storz

Central Asia holds vast critical mineral resources, but limited export capacity and complex environmental, geopolitical, and legal risks make large-scale US investment unfeasible. The US should instead focus its efforts on allied nations with established mineral export industries.

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EnergySource Jan 27, 2025

DOGE should use AI to fix environmental review

By William Yancey Brown

The National Environmental Policy Act’s (NEPA) often lengthy process can delay crucial development projects and job creation. To address this, Trump’s newly established Department of Government Efficiency should leverage AI technologies to accelerate environmental reviews, modernizing the administration of NEPA.

Artificial Intelligence Energy & Environment

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Environmental risk weighs heavily on the possible rewards of deep sea mining  appeared first on Atlantic Council.

The welcome in Riyadh will be more than ceremonial: Saudi Arabia is the linchpin of Trump’s Gulf tour. On May 14, Trump will join heads of all six GCC states at a summit in the Saudi capital. From Riyadh, Trump will head to Doha for talks with Qatari Emir Tamim bin Hamad Al Thani, then to Abu Dhabi to meet UAE President​ Mohammed bin Zayed Al Nahyan.

But Trump’s Gulf visit is more than a diplomatic tour; it is a pivotal opportunity to reimagine US–Gulf relations for a new era. The region is no longer content to be seen as the world’s energy hub alone; its ambitions now span digital innovation, green growth, and global influence. To remain a trusted and valuable partner, the United States must evolve its engagement strategy—offering not only promises but a visionary blueprint for shared prosperity and long-term stability.

Energy diplomacy: Oil on the table

Oil production will feature prominently in Trump’s talks, as energy prices tie directly into both global economics and domestic politics. Trump has drawn a link between high inflation in the United States and expensive oil, vowing to ask Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC) to “bring down the cost of oil.”​ Oil producers seemed to be trying to pre-empt such a request with this week’s announcement of another production increase, which caused oil prices to drop. Will this be enough for Trump? He will need to balance the US desire for affordable fuel with respect for Saudi economic goals, including ambitious domestic projects funded by higher oil prices. Any public statements on oil will be closely watched for signs of compromise. Energy talks may even address renewables and climate adaptation, a newly important topic for Gulf states.

Confronting regional conflicts

The Middle East’s simmering conflicts form a tense backdrop to the visit. Containing Iran’s nuclear ambitions will be a top priority. Trump’s visit comes as Washington tries to develop a new nuclear deal with Tehran, a move quietly backed by Saudi Arabia and the UAE​. Gulf leaders will seek reassurance that this outreach won’t compromise their security. Another pressing issue is Gaza. Trump pointedly is not visiting Israel—a sign that without progress toward a Gaza cease-fire or hostage deal, such a stop would yield little. Instead, Qatar and Egypt continue to work on brokering a cease-fire and easing the humanitarian crisis.

Yemen’s war, where a fragile cease-fire now offers hope, will also come up—Trump can reinforce Gulf-led peace efforts by lending US support​. From Yemen’s tentative peace to Syria’s uncertain future, Gulf partners are bearing more responsibility for regional crises, and US backing can help them succeed​. Each of these challenges underscores the importance of US-Gulf cooperation in resolving conflicts, as Washington and its Gulf allies strive to coordinate strategies and realign on the responsibilities of peace-making.

Investment and economic opportunities

Economic statecraft is at the heart of Trump’s Gulf agenda. The region’s deep pockets and sovereign wealth are a magnet for a US president eager to spur investment and job growth back home​. Trump will seek major new investments from Saudi Arabia, Qatar, and the UAE into US infrastructure, energy, and technology ventures​. In this transactional diplomacy, big numbers matter—and reports suggest that Trump is hoping to secure additional investment deals. Visible Gulf capital flows would allow Trump to claim wins for the US economy.

Beyond oil and real estate, today’s focus includes emerging industries. Cooperation in artificial intelligence and advanced technology is on the agenda​, aligning with Gulf states’ ambitions to become tech hubs. Expect announcements of joint tech funds or research centers. Defense deals are another pillar of the economic relationship. On the eve of the trip, the United States approved a $3.5 billion sale of advanced air-to-air missiles to Saudi Arabia, a signal that security cooperation (and the hefty contracts that come with it) will feature alongside business deals. By the end of the tour, Trump will aim to unveil a slate of agreements projecting a narrative that US-Gulf ties are translating into tangible economic benefits.

Despite headline-grabbing Gulf pledges, the numbers tell a cautionary tale. The UAE’s vaunted ten-year, $1.4 trillion investment commitment is enormous. However, this commitment lacks any clear roadmap, and such long-term promises face serious headwinds amid global economic volatility. Similarly, Saudi Arabia’s promised $600 billion (over four years) investment push represents an implausibly high share of the country’s economy. Riyadh’s finances are already stretched by Vision 2030 mega-projects like the city of NEOM, forcing the government to recalibrate and prioritize domestic spending. With the kingdom contending with turbulent growth forecasts and persistent political strains (not least the fallout from the war in Gaza), a sustained influx of Saudi capital into the United States is increasingly in doubt.

Recalibrating bilateral relationships

Each stop on the trip reflects a recalibration of US ties with a pivotal Gulf partner. In Saudi Arabia, Trump will renew official ties with Crown Prince Mohammed bin Salman after having kept his relationship with Riyadh strong during his time out of office. A similarly reassuring tone is expected in Abu Dhabi, where the UAE’s leaders seek confirmation of enduring US support even as they hedge with other partners. The stop in Doha highlights Qatar’s importance as a US ally, host to a major airbase and a mediator in regional crises. Broader strategic issues will weave through these bilateral talks. With China and Russia also courting the region, Trump’s visit is a chance to reassert US influence amid shifting alliances​.

As Trump prepares for his high-stakes visit to the Gulf, it is essential that his administration makes the most of this opportunity. Beyond familiar conversations about oil and security, this visit can—and should—mark the beginning of a broader, smarter partnership. Here are four ways Trump and his team can seize the moment.

1. Stabilize energy markets, embrace climate adaptation: Trump will ask Gulf producers to help moderate oil output to keep global prices in check. Yet to make this more than a one-note exchange, Trump should propose joint US–Gulf initiatives focused on clean energy transitions and climate resilience. By supporting Gulf investments in hydrogen, carbon capture, and renewable energy, the United States can demonstrate that its energy ties are evolving with the times—making both economies more resilient and forward-looking.
2. Prioritize conflict mediation: Washington’s long-standing alliances in the Gulf are grounded in shared security interests. Trump should leverage the considerable trust he enjoys with Gulf leaders to press for meaningful progress in Yemen’s fragile peace process and the war in Gaza. A joint US–Gulf conflict resolution framework could institutionalize cooperation, ensuring both swift responses to flare-ups and sustained support for reconstruction and peacebuilding, helping to stabilize a region too often trapped in cycles of crisis.
3. Bolster economic ties through innovation: Trump’s transactional approach to diplomacy is well known, but this trip offers a chance to push economic ties into new, forward-looking areas. Encouraging Gulf sovereign wealth funds to channel investments into US infrastructure and tech startups would deliver immediate economic benefits. Yet deeper gains lie in establishing joint research ventures in artificial intelligence, cybersecurity, and next-generation industries. This form of digital diplomacy could position both sides as global innovation leaders, fostering a tech-driven alliance for the twenty-first century.
4. Strengthen cultural bridges: To humanize what is often seen as a transactional relationship, the United States should double down on cultural diplomacy. Arts collaborations, sports exchanges, and interfaith dialogues can soften perceptions and deepen trust between societies. By championing such initiatives, Trump can underscore that US–Gulf ties are not confined to boardrooms and defense pacts but extend into the everyday fabric of life. Nurturing people-to-people connections is as strategic as any formal agreement.

If Trump can look beyond the predictable and embrace a more diversified, future-oriented approach—one that ties oil and security to innovation, youth, and culture—he can transform this trip from a standard diplomatic handshake into a legacy-defining pivot. The sands of the Gulf are shifting fast. To stay grounded, the United States must not just renew its ties—but reinvent them for the decades ahead.

Racha Helwa is the director of the empowerME Initiative at the Atlantic Council’s Rafik Hariri Center for the Middle East.

The post Trump’s Gulf gamble: Oil, conflicts, and opportunities in a high-stakes visit appeared first on Atlantic Council.

As part of the $150 billion defense funding boost that the House Armed Services Committee is including in the budget reconciliation bill, approximately $2.5 billion is specifically earmarked for the domestic production and stockpiling of critical minerals. An additional $20 billion is allocated to strengthening munitions manufacturing and the broader defense industrial base, which will also indirectly benefit critical minerals supply chains. 

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While this is a welcome and overdue move, the real test isn’t whether Congress can authorize new spending—it’s whether that spending can be structured in ways that create durable, investable markets. 

This wouldn’t be the first time that funds are announced with great fanfare, but lacking clear commercial pathways, private sector follow-on investments never materialize. Projects stall, supply chains remain fragile, and strategic vulnerabilities persist.  

To truly improve critical minerals security, Congress must structure these funds to create durable markets with sustainable demand signals, real commercial offtakes, and price stability. Merely handing out subsidies and building stockpiles that gather dust is not enough. 

Here’s how Congress can get it right: 

1. Use stockpiling wisely: Build “bid windows,” not just warehouses 

Stockpiling critical minerals is essential for national defense, but traditional government stockpiles have often operated outside normal market dynamics. Congress must avoid designing a system where the US government simply buys and stores metals at opaque and inflexible prices, inadvertently distorting already underdeveloped markets. 

Instead, a “bid window” structure—similar to how the Japan Organization for Metals and Energy Security (JOGMEC) operates—could ensure the stockpile acts as a price floor, rather than a ceiling, for market development. The United States could commit to buying minerals at a transparent, indexed floor price for a set volume each quarter, giving miners and refiners the demand certainty they need to invest while still letting private markets function freely above that level. 

This approach would reduce the risk for business and investors of a price collapse, thereby attracting private investment and stretching taxpayer dollars further by stabilizing—rather than dominating—the market. 

2. Focus on processing first: Without midstream, nothing works 

Many policymakers are tempted to fund new mines, but without midstream processing capacity, mines are destined to become stranded assets. 

Instead, Congress must prioritize refining, separation, and chemical conversion capacity inside US borders. It’s not glamorous work—but it’s the missing middle where China dominates and the West remains frighteningly dependent. 

The reconciliation bill’s funds should catalyze small-to-midscale batch processing plants for metals like cobalt, rare earths, gallium, and tungsten that are faster and cheaper to deploy than megaprojects. The midstream is where the supply chain bottlenecks—and geopolitical leverage—truly lie. 

A mine without processing isn’t a supply chain—it’s an orphan. The middle of the supply chain needs to be fixed first. 

3. Use the right tool for the right stage: Grants where needed, blended finance where possible 

Grants have been—and will continue to be—essential for building the critical mineral supply chain. Early-stage projects, new technologies, and first-of-a-kind facilities often cannot attract private financing without meaningful public support. Programs like the Department of Energy’s battery material processing and manufacturing grants have catalyzed activity where private capital alone would not step in. 

But as projects mature, this funding model should evolve. Wherever possible, blended finance tools—such as partial guarantees, credit enhancements, or first-loss capital—can stretch public dollars further and bring private investors alongside. 

Right now, there is not yet enough private capital chasing critical minerals to worry about crowding out investments with public spending. The bigger risk is failing to attract it at all. Structuring public funding in a way that can de-risk projects enough to make them bankable can crowd in private investment without making government funding the only path forward. 

Otherwise, critical mineral projects will survive only as long as government grants flow, instead of becoming durable parts of national security supply chains. 

4. Target strategic chokepoints: Not everything is “critical” 

Finally, not every mineral deserves public backing. Defense dollars must focus on true chokepoints: materials heavily controlled by adversaries where supply disruptions would cripple US capabilities. 

Tungsten, antimony, heavy rare earths, cobalt, and graphite fit this billing, but not commodities like aluminum or gold where deep, liquid global markets exist. 

By staying disciplined about which materials—and which segments of the value chain—the US government funds, it can maximize strategic leverage without diluting impact. 

A historic opportunity 

The United States has a rare window to reset its critical minerals strategy. The $150 billion reconciliation bill could be the start of something transformative—but only if it is structured to create a real market pull, not just government push.  

If prices can be stabilized without destroying private incentives, if the middle of the supply chain can be bolstered, and if private investment can be attracted in a durable way, the reconciliation bill may prove a real turning point. 

Done right, this bill could lay the foundation for resilient, investable critical mineral supply chains that support national security long after the headlines fade. 

Ashley Zumwalt-Forbes is a former US Department of Energy deputy director for batteries and critical minerals, co-founder and former president of Black Mountain Metals and Black Mountain Exploration, and co-founder and former senior advisor of Metals Acquisition Corp.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource Apr 3, 2025

Profitability and power: Fixing US critical minerals supply chains

By Ashley Zumwalt-Forbes

The global critical minerals race is well underway, and the American supply chain is behind. To regain momentum, the US must make this industry viable by creating a financial framework that attracts and retains capital.

Energy & Environment Energy Markets & Governance

EnergySource Apr 23, 2025

Illicit mineral supply chains fuel the DRC’s M23 insurgency 

By Clarkson Kamurai, Brad Handler, and Morgan Bazilian

The illicit trade of mined materials is fueling the M23 insurgency in the eastern Democratic Republic of the Congo (DRC), threatening regional stability and hindering development. As the United States considers a minerals-for-security agreement with the DRC, international engagement, ethical sourcing practices, and strengthened oversight are critical to fostering long-term peace in this resource-rich region.

Africa Democratic Republic of the Congo

EnergySource Apr 15, 2025

Central Asia’s geography inhibits a US critical minerals partnership

By Haley Nelson and Natalia Storz

Central Asia holds vast critical mineral resources, but limited export capacity and complex environmental, geopolitical, and legal risks make large-scale US investment unfeasible. The US should instead focus its efforts on allied nations with established mineral export industries.

Central Asia Energy & Environment

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Make critical mineral spending matter this time   appeared first on Atlantic Council.

Click to jump to an expert analysis:

John E. Herbst: This deal gives Trump a concrete interest in Ukraine’s survival

Shelby Magid: Ukraine is now in its strongest position since Trump took office

Matthew Kroenig: The United States now has a stronger stake in the future of Ukraine

Reed Blakemore: Ukraine’s critical minerals deposits will take years to bring to market

Ed Verona: With its unequal and exploitative terms, the deal’s future is uncertain

Doug Klain: The hard-won deal could reopen the door to more US military aid to Ukraine

Suriya Jayanti: Zelenskyy walked a very difficult line but the deal is a success

Andrew D’Anieri: There will be political drama, but expect Ukraine to ratify the deal

Oleh Shamshur: For Ukraine, the signed minerals deal is a major improvement over its earlier drafts

This deal gives Trump a concrete interest in Ukraine’s survival

This is a bad day for Russian President Vladimir Putin. The deal is a plus for US economic and national security policy. One, it is essential for the United States to have friends providing critical minerals. It cannot be dependent on adversaries such as China or Russia for that. So that is a plus. It is also positive for Ukraine, and not just because it now has an investor clearly committed to working on this subject of Ukrainian economic development. More importantly, this deal gives Trump—in terms he understands—concrete interest in Ukraine’s long-term survival as a secure, economically viable state.

The Kremlin will note with unhappiness that this agreement is the first occasion on which the new administration is talking about the provision of additional arms to Ukraine. It is unclear what the economic meaning of this is for the development of Ukrainian rare earths. What is absolutely clear is that, in Article VI of the deal laying out “Contributions to the Partnership,” the Trump administration is broaching for the first time sending arms to Ukraine. Making sure that does not happen has been one of Putin’s principal goals since the new administration took office.

—John E. Herbst is the senior director of the Atlantic Council’s Eurasia Center and a former US ambassador to Ukraine.

Ukraine is now in its strongest position since Trump took office

With the deal finally signed, Ukrainian officials can breathe an all too rare sigh of relief. Between fighting off a full-scale invasion and navigating a rocky road with Washington through cease-fire proposals, summits, contentious meetings, and a now iconic pull-aside meeting at the funeral of Pope Francis, Ukrainians have put in tremendous effort to close a deal that puts them in their strongest position yet with Washington since Trump took office.

Through intense negotiations, Ukrainian officials showed they could maneuver and persevere to ultimately get a fair deal. While the Trump administration put tremendous pressure on Ukraine to accept earlier deals, Ukraine managed to show that it is not just a junior partner that has to roll over and accept a bad deal. Ukrainian officials put their nation’s future first and managed the serious work to get to a final agreement that can be called a win on both sides.

This success and improvement in the US-Ukraine relationship comes as the Trump administration expresses increasing frustrations with Russia, questioning Putin’s willingness to end the war. Ukraine found itself under major attack shortly after the deal was signed, evidence of Putin’s pique at the agreement. While peace talks slow, the United States partially lifted its pause on military aid for Ukraine, approving the Trump administration’s first fifty million dollars’ worth of arms exports to the country through direct commercial sales.

As US Treasury Secretary Scott Bessent put it: “This agreement signals clearly to Russia that the Trump Administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term.” Such a statement and commitment from Washington now undercuts all of the Kremlin’s aims. With this deal and the administration’s other recent statements, perhaps Putin might realize he once again underestimated Ukraine. 

—Shelby Magid is deputy director of the Atlantic Council’s Eurasia Center.

The United States now has a stronger stake in the future of Ukraine

Trump has said that the critical minerals deal provides a security guarantee for Ukraine. Traditional security experts have doubted whether such an arrangement can replace boots on the ground as an adequate assurance, but it will facilitate increased American investments and presence of US personnel in Ukraine. This will give the United States a strong stake in the future security and stability of the country. Indeed, for a businessman like Trump, this may even be a stronger statement of commitment than troop deployments.

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies. 

Ukraine’s critical minerals deposits will take years to bring to market

The fact this deal got over the finish line after weeks of ups and downs speaks to the strategic value of the United States putting a marker down on Ukraine’s future—especially as the Trump administration accelerates efforts to negotiate an end to the war in Ukraine. 

Whether or not that strategic marker manifests in natural resources is still very unclear, if not unlikely. Though the US-Ukraine deal treats natural resources in a broad sense—including oil and natural gas in addition to critical minerals—access to Ukraine’s mineral resources has remained a consistently animating feature of negotiations. To that end, little of Ukraine’s mineral future has changed since this deal was first put on the table. Many of its critical minerals deposits remain in contested environments that will take years to bring to market, assuming that a negotiated peace keeps those minerals in Ukraine. Post-conflict stability, energy and logistical inputs to make project development successful, as well as the quality and quantity of those mineral resources will all bear strongly on investor appetite to pursue the licenses that are the backbone of this new reconstruction investment fund. If those upstream resources are successfully developed, then a separate but necessary question is how much of the raw material then passes through value chains that bottleneck in China as it becomes finished precursors and components. The answer to that question will determine if this deal supports the de-risking strategy that the Trump administration is deploying on a number of fronts. 

To be clear, the United States needs all the below-ground opportunities it can secure given the increasingly stark vulnerabilities it faces regarding China’s control of mineral supply chains. That makes this deal, in broad terms, a positive story. Yet it’s much too soon to characterize this deal as a “win” for supply chain de-risking rather than a useful card in Trump’s negotiations with Putin. 

—Reed Blakemore is the director of research and programs at the Atlantic Council Global Energy Center.

With its unequal and exploitative terms, the deal’s future is uncertain

It must come as a relief to the Ukrainians that the United States dropped its insistence on including the cost of all previous financial and military aid on the balance sheet of this deal. Nevertheless, the so-called partnership agreement is so onerous that it is tantamount to picking the pockets of an assault victim. Faced with an invasion by an enemy three times its size, Ukraine had little choice but to acquiesce to terms that reduce it to the status of a virtual colony or risk incurring the enmity of what has been until recently one of its staunchest allies. Under such extenuating circumstances, Zelenskyy bit the bullet and signed off on the deal. However, some nettlesome questions remain.

Will this deal have to be ratified by the Rada, Ukraine’s legislature? The unequal and exploitative terms are not likely to be accepted without opposition from across the Ukrainian political spectrum. Is the deal subject to a “yes or no” vote, or will amendments be considered?  If it is ratified by a slim majority, then would potential investors be willing to commit to projects if a future government might abrogate a deal that was arguably imposed under duress?

The history of mineral resources deals offers ample reason to doubt that this one would stand up well over the period typically required to develop large and capital-intensive projects with lead times of up to a decade. Russia, ironically, provides an example of how resource-related deals can come unraveled. Production sharing agreements signed during the difficult transitional period of the 1990s were subsequently repudiated by Putin’s regime, with Western partners forced to surrender control and majority ownership in major projects. There are many more such examples in the developing world. I suspect that few serious US investors will put their shareholders’ money at risk based on such a clearly unbalanced “deal.”

—Ed Verona is a nonresident senior fellow at the Atlantic Council’s Eurasia Center covering Russia, Ukraine, and Eastern Europe, with a particular focus on Ukrainian reconstruction aid.

The hard-won deal could reopen the door to more US military aid to Ukraine

After months of tough negotiations and cease-fires agreed to, Ukraine has given Trump another win. The announcement of an economic partnership between the United States and Ukraine—which started as a deal on access to Ukraine’s minerals but has since morphed into a broader investment fund for Ukraine’s reconstruction—is welcome news for anyone who wants to see Washington step back from the last few months of hostility toward Kyiv.

More than any specifics in this deal, the top takeaway is that while Putin continues to say “no” to Trump’s push for peace, Ukraine has yet again said “yes.” 

But the specifics do matter, and Ukraine seems to have pulled off some seriously tough negotiating with the Trump administration. Past proposals from Washington reportedly saw the United States taking partial or total ownership of broad swaths of Ukraine’s natural resources and infrastructure, something that prompted Zelenskyy in February to say, “I’m not going to sign something that ten generations of Ukrainians will be paying for.” Now, Ukraine retains full ownership of its assets and has turned the deal into a joint investment fund toward the country’s future reconstruction, with only future—not past—US assistance to Ukraine counting as a contribution to the fund. It’s a big win indeed after Trump has repeatedly mentioned inflated figures of what Washington has sent to aid Ukraine.

More than anything though, agreeing on a deal may reopen the door to military assistance from the United States to Ukraine. While weapons obligated by the Biden administration continue to flow, Trump has yet to make any new commitments to aid Ukraine’s defense since taking office. Ukrainian Deputy Prime Minister Yulia Svyrydenko, who signed the agreement on Wednesday in Washington, said that in addition to direct financial contributions to the investment fund, new assistance such as air defense systems would be considered an investment in the fund. No country but the United States can provide long-range air defenses against Russia’s ballistic missile strikes on Ukrainian cities.

Trump has spent months searching for a win in Ukraine, and now he’s got one. But Russia’s invasion will not be solved by an economic partnership. Putin has repeatedly rejected cease-fires because he does not want peace—he wants Ukraine. If the White House really hopes to secure a peace deal with Russia, that will require putting meaningful pressure on the Kremlin through the type of new sanctions Congress has prepared and by following through with new military support for Ukraine.

—Doug Klain is a nonresident fellow at the Atlantic Council’s Eurasia Center.

Zelenskyy walked a very difficult line but the deal is a success

Ukraine seems to have managed to negotiate itself out from under a proposed colonial-style resource concession, signing what has evolved into the framework for a deal with the United States that is actually mutually beneficial.  Earlier White House drafts of the deal sought de facto US ownership of all Ukraine’s extractive commodities and their supporting infrastructure in perpetuity, with some profit possible for Ukraine after $500 billion in “repayment” to the United States. But the final deal leaves ownership and control with Ukraine, has no such repayment threshold, requires the United States to contribute to the Reconstruction Investment Fund, and other much more balanced terms. 

Although Zelenskyy didn’t clinch security guarantees or NATO membership in exchange, the result is a commercial advantage for the United States. It is also a chance at huge foreign investment for Ukraine with the profits kept safe(r) from corruption and thus more likely to actually fund the country’s reconstruction. Ukraine still has work to do to make itself a more attractive country for foreign investment, such as stronger anti-corruption and rule-of-law adherence. But as written, this deal is a big win. Zelenskyy can rightly take credit for walking a very difficult line and coming out successful. It may well buoy him politically and buttress his chances of staying in office, which had been in decline, not least due to the White House’s hostility, which may also have been tempered with this deal. At least as of now, this is a win-win for all involved.

—Suriya Jayanti is a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

There will be political drama, but expect Ukraine to ratify the deal

There’s no doubt that the US-Ukraine natural resources deal is a significant step forward in relations between the Trump and Zelenskyy administrations. After months of will-they or won’t-they speculation that centered on the Trump-Zelenskyy relationship, two of the most competent officials on each side—Bessent and Svyrydenko—got the deal done. Washington gets priority access for US companies to develop new natural resource projects in Ukraine and some solid investment protections to mitigate regulatory and corruption risks. Kyiv did not get security guarantees per se, and the donation of further military aid by the United States would count toward the US contribution to the Investment Fund. But it did secure a 50-50 management partnership over the fund, concessions on only future projects (rather than reach-back clauses that would have included proceeds from existing natural resource operations, previously put forward by the Trump team), and a long-term commitment by the United States to invest in a major piece of Ukraine’s renewal.

On the technical side, expect some opposition lawmakers in the Ukrainian parliament to try to hold up the ratification process. The technocrats and European-minded parties will likely focus on oversight over the deal, while populist parties and Russian influence operations will attempt to paint the deal as Zelenskyy selling Ukraine’s sacred lands to the decadent West. Neither element is likely to matter given that Zelenskyy’s Servant of the People party retains a legislative supermajority and can count on support from a range of independent MPs; the agreement will be ratified sooner rather than later.

For the United States, the agreement provides a new, more high-profile mandate for the Development Finance Corporation (DFC). Indeed, DFC, rather than Bessent’s Treasury Department, will oversee the fund from the US side. DFC, which had focused on providing hundreds of millions in risk insurance and small-scale loan guarantees in Ukraine under the Biden administration, will now be tasked with managing billions of dollars in strategic assets in Ukraine alone. The focus on natural resource development is a welcome broadening of DFC’s mandate and one that could extend to other areas across Eurasia.

—Andrew D’Anieri is a resident fellow at the Atlantic Council’s Eurasia Center.

For Ukraine, the deal is a major improvement over its earlier drafts

Judging from the published text of the minerals deal, it seems that the Ukrainian side managed to ensure that the most notorious elements of the last US draft were not included in the agreement’s final version. Most importantly, Ukraine retained control over its mineral wealth and will exercise full influence over the functioning of the reconstruction investment fund. The deal also recognizes Ukraine’s obligations as part of the process of the country’s accession to the European Union (EU). However, this recognition cannot be considered ironclad, as any conflicts that arise between complying with this agreement and Kyiv’s EU accession obligations are subject to consultation and negotiation. 

In a notable reversal of some of the Trump team’s previous positions, the deal’s text refers to “Russia’s full-scale invasion,” indicates the possibility of continued US military assistance to Ukraine, and does not consider future revenue from Ukrainian critical minerals projects as repayment for assistance provided to Ukraine by the Biden administration. However, it remains to be seen whether signing this deal will prompt the Trump administration to modify its peace proposal by making it more acceptable for Ukraine. I still have my reservations about that.

—Oleh Shamshur is a nonresident senior fellow at the Atlantic Council’s Eurasia Center and a former Ukrainian ambassador to the United States.

The post Experts react: At last, the US and Ukraine signed a minerals deal. Here’s what to expect next. appeared first on Atlantic Council.

It was a state-ment. Canadian voters returned the Liberal Party to power on Monday after a stunning political comeback fueled by tensions with the United States—including an election-day message from US President Donald Trump calling for Canada to become the “fifty-first state.” Prime Minister Mark Carney declared in his victory speech that the United States will never “own” Canada. “But we also must recognize the reality that our world has fundamentally changed.” Our Canada-watchers are here to diagram what this new world looks like as Carney prepares to form a government.

• Christopher Sands (@USCanada_Sands): Adjunct lecturer and the director of the Hopkins Center for Canadian Studies at the Johns Hopkins School of Advanced International Studies
• Imran Bayoumi (@BayoumiImran): Associate director at the Atlantic Council’s Scowcroft Center for Strategy and Security
• Maite Gonzalez Latorre: Program assistant at the Atlantic Council’s Adrienne Arsht Latin America Center

Flag waving

• The election was essentially a referendum on the Canada-US relationship, Chris tells us, as “a surge of nationalist sentiment swept the country, including in Quebec,” which historically has maintained its own identity.
• Carney, who took over from Justin Trudeau in March, and the Liberal Party appear to have fallen short of a hoped-for majority of 172 seats. Meanwhile, the Conservative Party stumbled—with its leader Pierre Poilievre losing his own seat. “Carney outperformed expectations, but the appetite for change remains strong. Canadians are still divided on who should lead,” Chris says.
• The Trump administration, Chris says, could view a minority government as “weak.” Therefore it could ratchet up “pressure on Canada to meet NATO’s 2 percent of gross domestic product defense spending target, strengthen border security, and unlock its critical minerals—goals first promised by Trudeau in 2019 with little progress.”

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Let’s make a deal

• Given Ottawa’s ongoing tensions with Washington, Imran says we should expect Carney “to look beyond the traditional defense partnership with the United States and to forge new, smaller defense deals with a variety of nations.”
• We got a few hints during Carney’s first overseas trip, when he went to Paris and London rather than Washington and said Canada was reconsidering its decision to purchase F-35 fighter jets from the United States. Imran also points to a radar deal with Australia, a potential submarine deal with South Korea, and a proposed closer partnership with Nordic countries. 
• Carney’s Ottawa will distance itself from Washington on defense, “except where needed,” Imran predicts, “such as on North American Aerospace Defense Command (NORAD) modernization.”

Rocky Mountain low

• Though Carney called for unity in his victory speech, that will be put to the test in the Conservative stronghold of Alberta, Maite notes, where the Liberals won just two ridings. “With blue-collar Albertans significantly impacted by US tariffs, Carney now faces a critical opportunity to demonstrate his commitment to all Canadians, not just Liberal supporters or Ontario residents.”
• Carney and Trump-aligned Alberta Premier Danielle Smith, Maite points out, “have not started their relationship on solid footing.” But the Edmonton native Carney “may leverage his Alberta connections to build bridges with Smith and provincial voters.” 
• Alberta will also be the site of global intrigue in June, when Canada hosts Trump and other world leaders for the Group of Seven (G7) Summit in Kananaskis. That trip to the Canadian Rockies, followed by a flight to the Netherlands for the NATO Summit, represent “two defining tests” for Carney, Chris says: “How he performs will shape Canada’s standing abroad—and at home.”

The post Canada’s voters send a message to Washington—and the world appeared first on Atlantic Council.

There are first the legal barriers, particularly with respect to the Nord Stream 2 pipelines. The European Union (EU) Gas Directive of 2024 imposes a supply security test on non-EU asset owners—clearly a problem for Gazprom. However, US investors may be able to take advantage of EU rules to push forward their proposal for the acquisition of Nord Stream pipelines (possibly one, two or all the pipelines) arguing they are more likely to pass such a test than any Russian entity.  

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However, there is potentially a major second barrier: civil damages. A range of multibillion dollar claims against Gazprom are now underway because of its refusal to supply gas to its long-term customers during the energy crisis of 2021–22. There is not much point in investing in a pipeline if the gas or the revenues will then be seized by Gazprom’s former customers.

Furthermore, if Chinese tariffs on US liquefied natural gas (LNG) remain, US producers will likely want to keep Russian gas out of the EU market. This factor may weigh decisively on the Trump administration.  

The Nord Stream Pipelines

The Nord Stream pipelines consist of two sets of pipelines, Nord Stream 1 and 2, which run along the seabed of the Baltic Sea. Prior to the full-scale invasion of Ukraine in February 2022, Nord Stream 1 was fully operational, while Nord Stream 2 was awaiting German and EU authorization.  Each set in turn consist of two pipelines: Nord Stream 1A and B, and Nord Stream 2A and B. Each has a total annual capacity of approximately 27.5 billion cubic meters (bcm), amounting to 110 bcm in all—equal to two thirds of pre-2022 Russian gas exports to the EU.  

Leading up to the full-scale invasion of Ukraine, Gazprom progressively cut the flow of gas to the EU via all pipeline routes—not just Nord Stream 1, but also the Yamal pipeline and Ukrainian transit routes. These supply cuts sent EU gas prices spiraling to over €340 per megawatt hour by August 2022, well over the 2009–19 range of €9–29. By early September 2022, no gas flowed through Nord Stream 1, and Nord Stream 2 remained unauthorized. Later that month, explosions ruptured three of the pipelines leaving only Nord Stream 2A intact. 

The EU responded first by providing social protection for its consumers and businesses and funding gas purchases, principally from LNG providers. This cost the EU and member states approximately €500 billion. Subsequently, the EU significantly diversified its gas market, increasing pipeline supplies from Norway and LNG from the United States, Qatar, and even Russia. The EU plans to prohibit all Russian pipeline gas by April 2027. With the end of Russia’s Ukrainian transit contract in December 2024, the only Russian pipeline gas arriving in the EU is the 15 bcm which flows via the Turk Stream 2 pipeline principally to Hungary and non-EU Serbia. 

Can Nord Stream restart?

The major US figure pushing for a restart is investment banker Stephen Lynch, who has focused particularly on the still-intact Nord Stream 2B pipeline. Lynch has also suggested that repairing the other NS2 pipeline would cost less than $700 million.  

It is natural that one would start with the intact pipeline. However, the fundamental regulatory problem is that neither Nord Stream 2 pipeline has been authorized under German or EU law. The 2024 Gas Directive imposes two key requirements on pipeline owners. First, the owner must demonstrate that it is not also the supplier of the gas. Second, a non-EU owner person must show that certification will not risk the energy or overall security of any member state or the EU itself. 

One can see how the Lynch proposal could work with the EU law provisions. A US-owned pipeline would be far more likely than Gazprom to obtain certification under the supply security test, given Gazprom’s behavior during the energy crisis. Furthermore, as the US investors would own the pipeline but not provide the gas, they would be able to pass the separation of ownership and supply test. 

However, for such a proposal to work, the sale would need to be at full arm’s length—at market prices and with no Russian money or Russian state connections on the US side. The 2024 Gas Directive imports a very broad definition of control from the EU Merger Regulation. Any below-market-price transaction or Russian participation could raise the prospect of a legal challenge against the certification of the new non-EU owner—some EU member states would certainly launch a challenge if there were any suspicion of Russian involvement on the US side. 

One also must ask whether Gazprom—which has never willingly sold one of its long-distance pipeline systems—would be prepared to do so now. Gazprom ran a half-decade campaign to get Nord Stream 2 authorized so it could run the pipeline, and it would be unprecedented for Gazprom to surrender it. 

A further problem is that in response to the prospect of Nord Stream 2 restarting, the EU could seek to deauthorize Nord Stream 1, which was authorized under an older assessment regime which did not include the supply security test. As both Nord Stream 1 pipelines are ruptured and have not been repaired in over two years, the European Commission could propose amending legislation to the 2024 Gas Directive which could provide that any significant and lengthy rupture to a major piece of gas infrastructure would require the application of the supply security test.  

Adopting such legislation would potentially strengthen US investors’ hands with Gazprom. It would mean the only way that Russian gas could flow through the pipelines would be if they were sold. However, Gazprom would probably be even more reluctant to surrender all of its pipelines to outside hands. Taking that position, however, would mean that Nord Stream 1 could never be revived. 

The damages barrier

Perhaps the most formidable barrier to US investment in the Nord Stream pipelines is the fact that Gazprom would have difficulty selling its gas in the European Union, stemming from its behavior during the 2021–2022 energy crisis.  

From spring 2021—presumably as a means to weaken Europeans’ resolve to assist Ukraine once the full-scale invasion got underway—Gazprom progressively cut gas flows to the EU. This started with a failure to respond to demand for more gas on the European spot market as COVID restrictions lifted. Then, Gazprom did not fill its own European-based gas storages and indeed drew from them as the winter heating season began. By early winter 2021–22, some of Gazprom’s EU storages were as little as 5 percent full.  

Following the invasion in February 2022, Moscow went much further. In March, the Kremlin issued a presidential decree requiring all of Gazprom’s long-term customers to pay in rubles rather than in euros or dollars as per their contracts. Because it was difficult to be sure that payments would be cleared, many customers refused to pay in rubles. By May, Gazprom began systematically cutting off its long-term customers, starting with Poland in May and finishing with Italy in October. Over the summer, Gazprom progressively cut gas flows via Nord Stream 1, reducing supplies even for those continuing customers it was nominally still supplying.  

This led to at least twenty long-term customers suing Gazprom. As these arbitration proceedings are private, it is not possible to know how many cases there are or the scale of their claims. However, it is known that Germany’s Uniper has been awarded €13 billion by the Stockholm Court of Arbitration, and that Austria’s OMV is pursuing several claims and has so far received awards amounting to €330 million. In addition, Poland’s Orlen has said publicly it has a claim outstanding for €1.45 billion.  

The problem for Gazprom is that such awards create a major barrier to returning to the EU market. Gazprom will face seizures of its gas as it enters the EU market or more likely its customers payments will be seized to satisfy outstanding arbitration awards such as that handed down to Uniper. 

However, it is not only the long-term customers of Gazprom who have claims. Gazprom was the dominant gas supplier in most of Central and Eastern Europe and parts of Western Europe. Given that refusal to supply is an antitrust abuse of dominance under EU law, and indirect purchasers (including energy-intensive industrial users) as well as consumers are able to bring claims, the potential scale of damages against Gazprom may be enormous. 

With its long-term customers, Gazprom could potentially offer very cheap gas as a means of compensation. It could adopt a divide-and-conquer strategy by doing similar low-price compensation deals with high-volume users while seeking to contest consumer cases. The question remains however, as to whether the scale of compensation that Gazprom may have to pay undermines the economic case for entry to the EU market—and thereby the economic case for US investors to acquire one, two or all of the Nord Stream pipelines. 

Chinese tariffs and US LNG interests

With the imposition of Chinese tariffs on US LNG, US gas shipments are already being redirected toward the European market. If the current tariff regime is sustained, then US producers will want to maximize access to alternative markets. This then raises the question as to whether the US government would be willing to support any Russian gas flows returning to the EU.   

Potentially, Chinese tariffs may give Beijing greater incentive to finally consent to a version of the Power of Siberia 2 pipeline, which would, for the first time, bring natural gas from the Western Siberian gas fields—the main supply fields for the EU—to China.  

If this ends up being the case, one can see the potential reshaping of global gas markets. Russia would increase its gas flows to China, while the United States—via long-term LNG contracts—would supply the EU market. In such a world there would only be a limited role—if any—for the Nord Stream pipelines. Given the formidable obstacles, restarting Nord Stream may simply be one pipe dream too far.  

Alan Riley is a non-resident senior fellow at the Atlantic Council Global Energy Center and a Professor at the College of Europe, Natolin.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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Alan Riley

Nonresident Senior Fellow

Global Energy Center

Energy & Environment Europe & Eurasia

EnergySource Apr 28, 2025

If Russian gas returns to Europe, it must go through Ukraine

By Sergiy Makogon

The resumption of Russian gas supplies to Europe as part of a potential cease-fire agreement in Ukraine is under discussion, but any such flows would need to transit through Ukraine rather than Nord Stream or other routes. To safeguard regional stability, the EU, Ukraine, and the US must enforce strict safeguards to avoid renewed dependency and prevent Russia from once again weaponizing its energy exports.

Energy & Environment Energy Markets & Governance

EnergySource Mar 28, 2025

Nord Stream could divide Europe yet again 

By Michał Kurtyka

Washington’s potential reset with Moscow, amid Ukraine peace negotiations, has revived discussions on the future of Nord Stream 2. Whether the Trump administration would cede its LNG market in Europe to Russian pipeline exports remains to be seen. For Europe, however, reopening the pipeline would be a costly mistake.

Eastern Europe Economy & Business

EnergySource Mar 7, 2025

The US can reduce Russia’s nuclear energy—and geopolitical—influence

By Marina Lorenzini

As the Trump administration outlines its energy priorities, strengthening the US nuclear industry remains a point of bipartisan agreement. Revitalizing this sector will lead not only to domestic economic growth, but also a reduction in Russia’s dominance in global nuclear markets and its geopolitical leverage.

Energy & Environment Energy Markets & Governance

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Can Nord Stream really rise from the dead?  appeared first on Atlantic Council.

The answer, according to Kazakh officials, is a cautious yes. In September 2024, Gumar Sergazin, the then head of the Department of Nuclear Energy and Industry, said that SMRs could be built in the cities of Aktau and Kurchatov after 2030. In December, Almasadam Sätqaliev, the then minister of energy who has since been appointed to lead the new atomic energy agency, announced that the government was in discussions with two US companies—NuScale and GE-Hitachi—about the potential construction of SMRs, albeit in the distant future.

Both companies have been on Kazakhstan’s radar for several years. In 2021, NuScale signed a memorandum of understanding with Kazakhstan Nuclear Power Plants, the designated owner and operator of future nuclear power facilities in the country and a subsidiary of the government’s Samruk-Kazyna National Welfare Fund. The agreement aimed to explore the deployment of NuScale’s SMR VOYGR technology in Kazakhstan. The next year, Bela Ferenczi, General Electric’s president for Russia and the Commonwealth of Independent States, signaled the company’s readiness to offer SMR technology, including the GE Hitachi BWRX-300, for Kazakhstan’s nuclear development. However, in late June 2022, the Kazakh Ministry of Energy removed both vendors from the shortlist for its first nuclear power plant project, citing the lack of a proven track record in constructing and operating these technologies worldwide.

While Kazakhstan’s immediate nuclear focus remains on a large-scale power plant, SMRs could offer several advantages. According to the International Atomic Energy Agency (IAEA), SMRs—typically with a maximum power capacity of about one-third that of traditional reactors—could provide cost savings in capital investment and shorter construction times. They could also be deployed off-grid and scaled incrementally to match growing demand. Additionally, SMRs are expected to require less frequent refueling and are considered by many nuclear experts to be safer, as they can be built underground, making them less vulnerable to earthquakes and extreme weather events.

SMRs can also be placed on or near the sites of retired coal-fired plants. This could potentially reduce costs by avoiding the need for acquiring new land and by utilizing existing infrastructure, such as grid connections, water access, and transportation networks. The cost savings of replacing coal plants with SMRs depend in part on the characteristics of the coal plant. However, recent studies of plants in Poland and China estimated upfront savings in the range of 15 percent to 35 percent. In addition, nuclear energy is well positioned to repurpose the skills of legacy fossil-based energy sector workers. In Kazakhstan, where 66 percent of electricity is generated by coal-fired power plants and the coal industry employs approximately 32,000 people, a coal-to-nuclear transition could significantly support decarbonization and just transition efforts.

Yet, for all their appeal, SMRs are not without drawbacks. Research shows that some advanced SMRs may generate more voluminous and chemically and physically reactive waste than traditional light-water reactors. Moreover, their per-kilowatt costs may prove higher due to the loss of economies of scale, and they could suffer cost overruns during construction. 

Overcoming these challenges would require government support, innovation, and new business models, the International Energy Agency (IEA) reports. Should that happen quickly enough, the IEA estimates that SMRs could account for 10 percent of all nuclear capacity globally by 2040. The United States, a leading SMR innovator but overall laggard on new nuclear plant construction, is projected to contribute 20 percent of this growth. Some investors have expressed optimism about a nuclear energy “renaissance” under the Trump administration, as US Energy Secretary Chris Wright has said that nuclear energy is a priority. However, in advanced economies such as the United States, the regulatory approval process is often slow, and the first SMRs are unlikely to be deployed there until the 2030s at the earliest. Currently, only China and Russia have operational SMRs.

Kazakhstan’s cautious approach to SMRs, therefore, reflects a broader reality: SMR technology remains in the early stages of commercial licensing and deployment. Nuclear and political experts I have spoken with generally agree that Astana is unlikely to invest in SMRs without first seeing successful reference cases elsewhere.

Across the border, Uzbekistan has taken a different approach. In 2024, Russian state corporation Rosatom signed its first-ever export contract for a six-unit SMR plant in Uzbekistan’s Jizzakh region. Each reactor will have a capacity of 55 megawatts, bringing the total to 330 megawatts once completed. The project will use the RITM-200N water-cooled reactor, an evolution of the model deployed in Russia’s floating Akademik Lomonosov power station. Notably, no land-based nuclear plants currently use this reactor, although a two-unit project is planned in Yakutia, Russia. Uzbekistan’s nuclear initiative will involve international subcontractors from China and Europe for non-nuclear components. If all goes as planned, the first unit will be operational by 2029, with the entire plant coming online by 2033.

Kyrgyzstan is considering using the same technology to address its need for more energy. In 2023, Rosatom and the Kyrgyz Ministry of Energy agreed on a roadmap for a two-unit power plant. Given the country’s mountainous terrain and small grid, SMRs present an attractive alternative to large-scale nuclear power.

As both neighbors develop their SMR potential, Kazakhstan might have more reference cases to draw from. By the time Astana completes its first nuclear power plant, advancements in research and development, an increasing number of reference projects, and reduced costs might indeed make SMRs a more viable option. 

Aruzhan Meirkhanova is a policy analyst and senior researcher at the National Analytical Center, a think tank based at Nazarbayev University in Kazakhstan.

The post Are small modular reactors in Kazakhstan’s nuclear energy future? appeared first on Atlantic Council.

Nearly three months of zero gas flows have shown that Europe can manage without the volumes of Russian gas that previously transited Ukraine—only 15 bcm in 2024, compared to 84 bcm in 2019. Nevertheless, rumors of possible restoration of Russian gas deliveries to the European Union (EU)—either via Nord Stream or through Ukraine—continue to circulate in the press. Resuming this trade could be a potential Russian condition for halting hostilities as Russia desperately needs gas export revenues. If that is the case, resumed flows might be a necessary step to create peace. But they must be routed through Ukraine and under conditions that will ensure energy security and full transparency. 

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Russia is extremely interested in resuming supplies to the premium European gas market. Since 2021, Russia has lost more than 100 bcm per year of gas exports to Europe, undermining Gazprom’s financial stability. Desperate attempts by Gazprom to redirect exports to Central Asia and China have not brought significant financial returns, as prices there are two-and-a-half times lower than European prices. Moreover, pipeline export capacity to those markets is very limited. Russia’s direct pipeline export capacity to China currently stands at 38 bcm per year via Power of Siberia. This infrastructure is not connected to the large gas fields historically used to supply European markets. Additionally, Russia’s ability to export liquefied natural gas (LNG) faces significant constraints due to US sanctions. To cushion the loss of the European market, the Russian government has been forced to raise domestic prices, an unusual and very unpopular move in the country.  

Additionally, the Kremlin is eager to maintain its political influence over Europe, including through export revenues. Hungary and Slovakia are clear examples of how this influence manifests—both nations have repeatedly opposed or diluted EU sanctions against Russia and blocked critical financial and military support for Ukraine. 

The Russian government and several members of the German far right regularly raise the issue of resuming Russian gas supplies to Germany via the surviving branch of the Nord Stream 2 pipeline, which has a capacity of 27.5 bcm per year. However, German authorities categorically rule out the possibility of such a resumption. Other Northern European countries, as well as Poland and the Baltic states, also strongly oppose restoring transit through Nord Stream, fearing increased militarization of the Baltic Sea and the potential reversion to EU dependence on Russian gas. Resuming transit through Poland is also unlikely, for both political and technical reasons, as the Yamal–Europe pipeline has now been almost fully integrated into Poland’s domestic gas system and can no longer handle flows from Russia. 

This leaves Ukraine as the most feasible route for resuming Russian gas deliveries to Europe.  

EU officials and most member states officially do not support the idea of resuming gas transit through Ukraine. However, the EU has not imposed sanctions on Russian pipeline gas or LNG, allowing Russia to retain a significant market share in Europe. The European Commission continues to reaffirm its commitment to phasing out Russian gas completely by 2027, and this month plans to present a detailed roadmap for this process. 

Unfortunately, the European Commission has been unable to fully ban Russian gas imports. Combined pipeline and LNG imports from Russia accounted for less than 19 percent of total EU gas inflows in 2024. However, there may be concern that a complete ban could significantly impact gas prices in Europe. Given that the Commission has outlined a plan—not a binding commitment—to fully phase out Russian gas by 2027, it might opt to delay sanctions on Russian gas until then in exchange for peace. The anticipated influx of new LNG volumes from the United States, Canada, and Qatar between 2026–28 could mitigate EU concerns about price volatility during this transitional period. 

The position of the United States will be determinative. On one hand, the Trump administration consistently demands that EU countries increase purchases of US LNG and may not welcome significant increases in Russian gas imports to Europe. However, for the sake of a peace deal, Trump may agree to limited imports of up to 15 bcm annually—a volume that flowed via Ukraine in 2024 and would have only a minor impact on US exports to Europe. 

As for Ukraine, estimated annual revenues of $400–600 million from Russian gas transit are a miniscule contribution to the economy. Therefore, the question of resuming transit should be considered in a broader context of cease-fire agreements and establishing long-term peace. Continued transit of Russian oil and renewed gas transit through Ukraine could allow Russia to earn up to $12 billion annually. Accordingly, Ukraine is entitled to expect not only transit fees of around $200 million for oil and an estimated $400–600 million for gas, but also significant additional concessions from Russia. 

These concessions should include Ukrainian control over the Zaporizhzhia nuclear power plant, which can produce 6 gigawatts of electricity annually, but was occupied by Russia in 2022. This would help balance Ukraine’s power system, large parts of which have been destroyed by Russian missile and drone attacks, and eliminate the need to import electricity from the EU. It is worth noting that Russian control over the plant has little economic sense, as Russia cannot restart the plant without restoring the Kakhovka Reservoir, which is unlikely without Ukrainian cooperation. 

Additionally, Ukraine has the right to demand 15–20 percent of Russian oil and gas exports—either in monetary terms or in kind—as a transit tax. These funds should go into a special fund for the restoration of Ukraine’s energy production, which has been destroyed by Russian attacks. The proposed percentage is reasonable, given the existing discounts on Russian oil and gas which, as sanctions are lifted, should disappear.   

In order to limit Kremlin’s influence on the European gas market and on political processes within Europe, the EU should place red lines on its reengagement with Russian energy. 

First, import volumes of Russian gas should be capped, both for the entire EU and for individual member states, to prevent any renewed dependency on Russian energy supplies. 

Second, gas purchases should be carried out collectively through the AggregateEU initiative, with the delivery point for European buyers located at the Russia–Ukraine border. This would eliminate Gazprom’s ability to offer politically motivated pricing to more loyal countries and energy companies. 

Finally, the EU and Ukraine should create an international consortium to manage Ukraine’s gas transmission system. This idea was explored in 2018, and its revival could increase European traders’ confidence in transit reliability through Ukraine.  

Conclusion

If a cease-fire necessitates resuming Russian gas flows to Europe, it must flow via Ukraine and be conditional on key concessions from Russia. These must include safeguards to ensure that the EU does not become dependent on Russian gas again and that Moscow can no longer use gas as political leverage. Ukraine should also regain control over vital energy assets like the Zaporizhzhia nuclear plant and secure a substantial transit tax for reconstruction of its energy infrastructure. Policymakers in Kyiv, Brussels, and Washington must remain resolute in demanding these terms to ensure any peace agreement reinforces, rather than undermines, regional stability and energy security. 

Sergiy Makogon is a non-resident senior fellow at the Center for European Policy Analysis and the former CEO of GasTSO of Ukraine (2019-2022).

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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EnergySource Mar 28, 2025

Nord Stream could divide Europe yet again 

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Eastern Europe Economy & Business

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As the Trump administration outlines its energy priorities, strengthening the US nuclear industry remains a point of bipartisan agreement. Revitalizing this sector will lead not only to domestic economic growth, but also a reduction in Russia’s dominance in global nuclear markets and its geopolitical leverage.

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EnergySource Feb 24, 2025

US energy dominance is Putin’s worst nightmare as Russia enters its fourth year of war crimes

By Olga Khakova, Haley Nelson

Three years of Russia’s senseless aggression in Ukraine have caused monumental, unnecessary human suffering but also an irreversible impact on Russia’s energy sector. Sanctioning Russian LNG at the source is the most effective way to prevent future supply blackmail from Moscow.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post If Russian gas returns to Europe, it must go through Ukraine appeared first on Atlantic Council.

On April 27, 2025, Africa Center nonresident senior fellow Oluwayemisi Ajumobi published an article in Globalization and Health, “Safeguarding global health security amidst a scramble for Africa’s minerals for the clean energy transition.”

“The global transition to renewable energy is increasing the demand for critical minerals mining in Africa. Without appropriate safeguards, expansion of mining operations on the continent increases the risk of mining-associated infectious disease outbreaks with epidemic and pandemic potential,” Ajumobi writes.

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The post Ajumobi in Globalization and Health: “Safeguarding global health security amidst a scramble for Africa’s minerals for the clean energy transition” appeared first on Atlantic Council.

One of the most immediate opportunities for the Trump administration lies in deploying MCC resources to execute and accelerate a US-Democratic Republic of the Congo (DRC) critical minerals partnership currently under discussion. As the global race for cobalt, copper, and other energy transition minerals intensifies, China continues to dominate global upstream and midstream processing. The MCC’s country compact model and its authority to engage in regional deals can be reimagined to secure US access to mining opportunities, support US companies in their investment plans, develop necessary energy and transport infrastructure, and advance the regulatory reforms needed to give US companies greater confidence in investing in the Central African region. This can all be done without new legislation. Now is the time to redesign MCC’s operations so it can become a core pillar of a strategic, security-aligned America First foreign policy; failing to leverage this tool would be a strategic oversight.

The MCC: A “big push” development effort

The MCC was established in 2004 through the MCA 2003. Inspired by the Marshall Plan, it was created with a bold vision: to deliver transformative, large-scale development aid to countries that demonstrate a commitment to democratic governance, sound economic policies, and investment in their people. Distinct from traditional United States Agency for International Development (USAID) programming, the MCC’s model to date has focused on large five-year grants negotiated on a bilateral basis between the United States and recipient countries. These five-year agreements, known as “compacts,” can range from $100 million to $700 million, with the average being $350 million. These compacts fund large-scale infrastructure, education, and policy reform projects in select low- and lower-middle-income countries, and can take years to negotiate given the many steps involved (Figure 1). Figure 2 shows how MCC compacts are structured.

Figure 1. From selection to signing: The MCC’s multi-year compact development at a glance

Figure 2. The MCC compact structure

At its core, the MCC has operated as a development assistance program based on an aid-based philosophy, seeking to advance poverty reduction, access to services, and governance improvements in foreign countries. As of January 2025, the MCC had signed forty-five compacts with twenty-nine countries, with many nations signing more than one compact after the completion of the first five-year period. More than 80 percent of the countries supported by the MCC are located in Africa. Historically, countries became eligible for MCC compacts by scoring high on a complex set of twenty indicators (measured by third parties), covering areas such as political rights to immunization rates to land rights to fiscal policy and conservation. In 2018, the MCC received the right to enter into regional compacts to advance cross-border infrastructure and economic development projects that support trade corridors, regional power pools, and customs harmonization. However, only one regional compact has been signed to date.

As the number of eligible countries based on the MCC scorecard has decreased over time, the MCC was able to award threshold programs, which were smaller grants (of one to three years, averaging $20 million to $40 million) focused on helping countries address lagging scores on some of the eligibility indicators. Additionally, the MCC Candidate Country Reform Act, passed as part of the fiscal year 2025 National Defense Authorization Act, expanded the pool of eligible countries to include upper-middle-income countries. 

What sets the MCC apart from the DFC and the Eximbank?

While the DFC and Eximbank play important roles in US foreign economic engagement, their tools and mandates differ fundamentally from those of the MCC. The DFC provides loans, equity, and political risk insurance. And while it has mobilized billions in private capital, it is limited by its requirement to generate a return on investment. Similarly, the Eximbank supports US exports through loan guarantees and insurance products but cannot invest in upstream development or non-commercial infrastructure. In contrast, the MCC provides flexible grant capital—an asset class that offers strategic advantages for the United States when competing with China’s state-backed investments and concessional financing.

In the case of critical minerals, this access to untied, large-scale grant capital means the MCC can support essential early-stage project development, including feasibility studies for mining projects, and can enable infrastructure and policy reforms in ways that commercial or quasi-commercial institutions cannot. For example, in the mining sector, MCC funds can help finance roads, rail, and power infrastructure essential to project bankability—thus paving the way for US private investors and DFC-backed investments to follow. Furthermore, the MCC, which has deep experience working with governments, can directly fund regulatory improvements and workforce development—areas that would be off-limits for the DFC or Eximbank. In the context of critical minerals that are needed for long-term US national and economic security, the MCC’s tools are indispensable.

The Trump administration is considering folding the MCC into the DFC—or even shutting down the agency entirely—in an effort to streamline and simplify the tools of US economic statecraft. While this might work in the long run, it would be a mistake in the short term. Due to significant differences in operational frameworks between the MCC and DFC, maintaining the MCC as an independent entity is critical to deploying the powers discussed above. Specifically, under current Office of Management and Budget (OMB) scoring rules, DFC equity investments are treated similarly to grants—scored on a one-to-one basis, which limits the DFC’s ability to expand equity initiatives without substantial new congressional appropriations. Integrating MCC grant resources into the DFC before DFC reauthorization legislation is passed, which may resolve the equity scoring issue, could lead to the DFC prioritizing the use of such funds for equity rather than grants. While equity is important and the DFC’s equity capacity should be expanded, the MCC’s flexible grant-making capacity should be preserved and leveraged to significantly de-risk projects that are of strategic importance to the United States.    

MCC 1.0 vs. MCC 2.0

In the Trump administration’s ongoing transformation of US foreign assistance and commercial diplomacy architecture, rather than closing the agency altogether, there is an opportunity to use the MCC differently—to create an MCC 2.0 that will allow for the strategic deployment of US economic statecraft.

A reformed MCC—one that loosens eligibility requirements and speeds up compact development while still focusing on critical infrastructure development—would greatly benefit partner countries, particularly in Africa. With annual infrastructure needs exceeding $130 billion, African countries are actively seeking partners capable of mobilizing large-scale private investment responding quickly to the demands of their young and growing populations. The MCC can be redesigned to operate at the nexus of both African and US national interests. 

Using the MCC to counter Chinese dominance in critical mineral supply chains

By simply changing how the MCC operates within its legislative mandate, as defined by the MCA 2003, the Trump administration can access a pool of flexible capital that can be redirected to shape critical mineral supply chains in ways that enhance US national security. The following points illustrate key areas of flexibility:

• Country eligibility does not need to be defined through complex scorecards. Countries can be determined as eligible by the MCC board if they show adequate commitment to democratic governance, economic freedom, and investing in women and children (Section 607 MCA 2003). A board decision approach will dramatically reduce the time needed to negotiate compacts. The methodology can be changed each fiscal year with notice to Congress (Section 608.b.2.).
• Compact countries are asked to make contributions relevant to meeting the objectives of the compact (Section 609.b.2). These contributions could take the form of mineral resources or rights, as is being discussed between the Trump administration and the government of Ukraine. 
• The MCC can pay for expert consultants or legal counsel on behalf of eligible countries to fast-track compact negotiations with the MCC (Section 609.g). 
• The MCC can award subsequent and concurrent compacts (for example, regional compacts) to countries so that long-term planning is possible beyond the initial five-year compact (Sections 609.j, 609.k, and 609.l).
• MCC grants can be awarded (within the framework of a compact) to national governments, subnational governments, nongovernmental organizations, or private companies (Section 605.c).
• The MCC can make other grants to individuals, firms, or governments deemed necessary for the functioning of the corporation (Section 614.a.3).
• The MCC can make grants of up to five million dollars to universities (both foreign and US universities) for relevant data (Section 614.g). China has long supported the geology departments of African universities in its effort to access relevant data on mining opportunities and build a network of local experts. Under this provision of the MCA 2003, the MCC would be able to counter that influence and help build the skilled workforce needed for resilient mining industries.

In rethinking the MCC’s operations, large pools of grant resources could be strategically directed toward building US partnerships in the mining, processing, and manufacturing of critical minerals. A generic compact could be signed with a country such as the DRC within three months of determining eligibility (in accordance with the 2023 MCA’s congressional notification requirements). Subsequently, projects could be developed and funded on a rolling basis. Figure 3 shows a potential structure for a compact focused on critical minerals.

Figure 3. The MCC 2.0: An investment partnership model

Under this new MCC 2.0 compact structure, the United States and another country could form a joint venture (JV) focused on early-stage exploration. The JV would acquire exploration licenses from the country at no charge but would be required to advance licenses from exploration to the pre-feasibility stage within four years. This alignment of interests would help fast-track the permitting and government engagement around the deals. Once assets have been de-risked enough to generate interest from private investors, the JV company would sell down its interest. The JV would operate with the highest levels of transparency, good corporate governance, and data sharing, employing the latest technologies to more accurately assess mining opportunities.

Equity ownership of the JV could be assigned by the MCC to the DFC (which can legally have equity) or a US trust account and could also include subnational government or community ownership. The MCC would seed the JV with initial equity—perhaps $50 million of a $400-million compact—but subsequent rounds could be raised through capital market strategies. 

The remaining compact funds would be reserved for the infrastructure necessary for resilient and cost-competitive supply chains—including transport and energy projects. In Zambia and the DRC, the biggest constraint to expanding copper production is the lack of energy resources. The Congolese mining sector faces an energy deficit of between 500 megawatts (MW) and 1,000 MW. All procurements related to energy and mining-sector investments will incorporate a preference for US companies (an automatic 20-percent bonus point allocation by the Technical Evaluation Panel). The MCC will actively market projects to US companies through public relations, marketing efforts, and regular roadshows, and will provide support US companies in due diligence and vetting potential local partners. 

Launch MCC 2.0 as part of Trump’s first one hundred days

As Trump’s first one hundred days draw to a close, there is still time for action in regard to the MCC. Instead of shutting down the agency, the Trump administration should nominate a chief executive officer for the MCC without delay and, while confirmation is pending in the Senate, the administration should run the MCC through a beachhead team, as was done at the Eximbank since January. The MCC 2.0 model can be applied immediately to the DRC deal under consideration or to mining resource-rich countries familiar with the MCC, such as Zambia and Tanzania. The United States is working to turn around decades of policies that ceded strategic advantage in critical value chains to China. The MCC should be seen as a vital part of that effort.

Aubrey Hruby is a senior adviser and senior fellow at the Africa Center at the Atlantic Council and leads the center’s Critical Minerals Task Force.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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AfricaSource Mar 27, 2025

Prioritizing access to critical minerals will require prioritizing Africa

By Benjamin Mossberg

Access to critical minerals is an urgent national security issue. The United States must view investments in African energy, mineral, and mining—key to securing this access—with similar importance.

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How Trump could upend global finance—and how the world might respond

By Ferid Belhaj

Concerns are growing—particularly among policymakers and experts in “New South” countries—about the direction in which the international financial system is heading.

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The post The Millennium Challenge Corporation could prove essential in the race for critical minerals. Reform it, don’t shut it down. appeared first on Atlantic Council.

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Conflict minerals and the M23 insurgency 

The Great Lakes region of Africa, which straddles the DRC, Rwanda, Burundi, and Uganda, supplies 30 percent of the world’s coltan, a crucial mineral for high-end electronics. Other valuable minerals, such tin, tungsten, tantalite, and gold, are often mined alongside coltan in the region. Artisanal mining is common—while this provides livelihoods for many, it also gives rise to dangerous working conditions, child labor, and political conflict and instability.  

Much of the region’s coltan is deemed a conflict mineral as mining areas are controlled by armed groups and organized crime. The DRC government lacks firm control of its territories, especially in the eastern provinces, and transportation infrastructure is underdeveloped. Because of these challenges, foreign companies often avoid direct mining in the DRC, instead purchasing minerals through middlemen. 

The M23 rebel group, an ethnic Tutsi-led militia in the eastern DRC, is fighting the DRC national army and claims to protect Tutsi populations from Hutu militias. Its resurgence in 2022 is linked to frustrations over the government’s slow implementation of peace agreements and worsening security, although it is argued that M23 acts in service of Rwanda’s interests in the region’s minerals. The M23 insurgency is allegedly financed through the exploitation of coltan and other minerals, including reports that M23 fraudulently exported at least 150 metric tons of coltan (7-10 percent of DRC’s annual global supply) to Rwanda in 2024. Current estimates put this as high as 120 metric tons per month. The current involvement and role of Rwanda is evidenced by the presence of 4,000 Rwandan army personnel and heavy weaponry.  

The ongoing insurgency has halted regular mining activities, leading to “command” mining in which rebels control operations. This is affecting production levels, worker safety, and regional investment. Conflict has placed all transport routes under rebel control, increasing costs and delays due to road closures and violence.  

An important dynamic for global supply chains is that rebel groups like M23, along with other middlemen, foster the mixing of legal and illegal minerals. This effectively launders the illegally mined material, allowing its sale to parties that are mandated to buy ethically sourced product, such as US-based customers who must comply with the Dodd-Frank Act. These sales channel profits to armed groups while depriving the DRC of its rightful revenue. Rwanda is effectively complicit, as it does not charge taxes on mineral exports and allows imported goods to be reassigned as “Made in Rwanda” if they are transformed or processed within the country with a minimum 30 percent value addition. 

DRC efforts to regain control 

Amid the ongoing conflict in the eastern DRC, there is an intensified call for international accountability and economic reforms to address resource-driven violence. At the February 2025 United Nations (UN) Human Rights Council session, the International Chamber of Commerce and Development urged the UN to enhance transparency in raw material transfers from Rwanda to combat mineral exploitation crimes. Enhanced oversight, it argued, would hold resource looters accountable. 

Additionally, at the Munich Security Conference, the DRC accused Rwanda of destabilizing the region to exploit its minerals and proposed measures to encourage legitimate investments and transparent contracts while urging the international community to facilitate peace.  

The DRC, meanwhile, has classified certain mining sites in North and South Kivu provinces as “red” zones, halting mineral trading in these areas. The country is orchestrating legal and regulatory efforts, including installing ore tracking mechanisms to combat the illegal mineral trade, disrupt conflict financing, and align mining practices with international standards. The red zone classification is intended to last six months and includes independent audits to ensure responsible sourcing.  

On the diplomatic and military front, a quid pro quo of mineral rights for security cooperation seems to be developing whereby the DRC is courting Western governments’ security assistance to thwart the Rwanda-backed incursion. Much of the international community is also demanding stricter standards for purchasing minerals ostensibly mined and processed in Rwanda. The DRC will need international support to implement measures for strict oversight of the region and, more fundamentally, addressing the sources of instability that fuel the conflict. On a positive note, in late March, a Qatar-brokered peace summit resulted in commitments by the leaders of the DRC and Rwanda to cease hostilities. 

Next steps

Achieving lasting peace in the eastern DRC requires addressing the root causes of conflict, including ethnic tensions, political instability, and competition for mineral resources. It will not come quickly.  

The DRC needs sustained dialogue with rebel groups and neighboring countries to reach a peace agreement and foster reconciliation among ethnic groups. It also needs to improve the capacity and legitimacy of institutions to manage resources, provide security, combat corruption, and enhance transparency. 

Meanwhile, mineral buyers and the international community can help the DRC by enforcing ethical sourcing that follows regulations like the Dodd-Frank Act and OECD guidelines, supporting peace initiatives with diplomatic and financial aid, and providing humanitarian assistance to support displaced populations, rebuild communities, and enforce human rights laws. 

The M23 insurgency is yet another reminder that the international community must support resource-rich countries in building the capacity to formalize mining and adhere to recognized principles for working and living conditions. The United States’ and others’ overtures to help provide security may be a good first step, but it only sets a foundation for much more work to be done. 

Clarkson Kamurai is the critical minerals program manager at the Payne Institute and a PhD researcher in the minerals and energy economics program at the Colorado School of Mines. Kamurai has engineering experience in base and precious metal mining in sub-Saharan Africa and South America. 

Brad Handler is the program director for the Payne Institute for Public Policy’s Energy Finance Lab. Previously, he was an equity research analyst in the oil and gas sector at investment banks including Credit Suisse and Jefferies.  

Morgan Bazilian is the director of the Payne Institute for Public Policy at the Colorado School of Mines and a former lead energy specialist at the World Bank. 

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

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