If you’ve been tracking the flow of capital into the resources sector, you know the narrative has been dominated by decarbonisation for the better part of a decade, and the term ‘critical minerals’ has been at the top of the geopolitical agenda of late.
As a new report from the Organisation for Economic Co-operation and Development (OECD) suggests the goalposts are about to move significantly for global markets, Azzet checks out a handful of ASX-listed juniors at the forefront of sustainable green tech.
Azzet’s Mission Critical is a weekly column that lays out the ebbs and flows around the critical minerals supply chains - from pricing, production, refinement and mergers & acquisitions, to manufacturing and consumer products.
Triple threat
The OECD's Environmental Outlook on the Triple Planetary Crisis was released in Paris this week, framing the global challenge not just as a climate issue, but as three interconnected crises: climate change, biodiversity loss, and pollution.
400-odd pages of policy modelling might seem dry to the average investor, so here's the gist:
The OECD outlines our global environmental trajectory to 2060, providing a glimpse into the probable regulatory framework for the next 30 years.
The core message is that solving for carbon alone is no longer sufficient and, in some cases, actually creates new risks for investment portfolios.
OECD stresses the report is actually a policy blueprint rather than a prediction, signalling that while the market has rewarded "Green", the next decade will likely reward "Clean and Efficient".
It states our clean transition is evolving from a carbon tunnel vision to a holistic view of planetary health, meaning the edge will come from identifying companies solving for all three crises.
Climate change
- Projection: The report projects that under current policy settings, global ambition is insufficient, leading to a projected 2.1°C warming by 2050 relative to pre-industrial levels, with temperatures continuing to rise by over 0.25°C per decade thereafter.
- "Carbon tunnel" risk: The report warns against “Carbon Tunnel Vision” - focusing solely on net-zero emissions while ignoring the broader ecological impact.
- Transition link: It highlights that the solution to climate change (e.g., massive deployment of renewable energy infrastructure) requires significant land and resource use, which can inadvertently worsen the other two crises if not managed via “integrated policies”.
Biodiversity loss
- Projection: The Mean Species Abundance (MSA) index - a key metric for biodiversity integrity - is projected to decline further from 59.7% to 56.5% by 2050.
- Drivers: While land-use change (agriculture and urbanisation) has historically been the biggest driver, the report identifies that climate change is rapidly becoming the dominant driver of biodiversity loss.
- Economic risk: This loss is not just environmental; it is framed as a "nature risk" to the global economy, as industries dependent on ecosystem services (like pollination and water filtration) face declining productivity.
Pollution
- Mixed outlook: Unlike the other two, the outlook here is split. While traditional air pollutants may decline due to cleaner energy, other forms of pollution are set to explode.
- Plastic and nitrogen: The report projects that plastic leakage into the environment will grow by almost two-thirds, and the global nitrogen surplus (largely from agricultural fertilizer runoff) is projected to increase by one-third.
- A "silent" crisis: Pollution is identified as the crisis often treated with the least policy integration, frequently leading to "problem shifting" where waste is moved rather than reduced.
Financial institutions are beginning to model the economic drag of inaction and the OECD projects that without significant policy changes, the economic costs of environmental damage will significantly dampen global GDP growth by mid-century.
And while the big end of town hires consultants to write sustainability reports, a handful of ASX juniors are actually building the tech to fix the mess.
Early movers
Here are a few ASX-listed juniors that fit the OECD’s "triple crisis" thematic:
Neometals (ASX: NMT)
Neometals is pivoting hard into sustainable battery recycling and recovery of critical materials to address the growing need for circular economy solutions in the sector.
Their "Primobius" JV is already shredding batteries in Germany to recover valuable metals, which aligns directly with the OECD's focus on resource efficiency and minimising mining waste.
Delorean Corporation (ASX: DEL)
Delorean Corporation is tackling physical waste by building infrastructure that turns organic waste into bioenergy and renewable gas rather than letting it rot in landfills.
Instead of landfilling food scraps, which creates methane, they cook it in anaerobic digesters to power the grid, playing on both the pollution and climate pillars simultaneously.
RLF AgTech (ASX: RLF)
Biodiversity loss is largely driven by broadacre farming runoff, so RLF has developed technology that increases crop yields and soil carbon without dumping massive amounts of traditional granular fertiliser.
Their "Integrated Crop Nutrition" aims to make plants more efficient, reducing the chemical load on the soil and water table, which aligns with the "Nature Positive" thematic.
Environmental Clean Technologies (ASX: ECT)
Environmental Clean Technologies recently acquired rights to a flash joule heating process designed to destroy PFAS, effectively targeting the "pollution" aspect of the triple crisis.
With governments globally waking up to the PFAS nightmare, technology capable of removing these chemicals from the soil is seeing increased attention from speculative investors.
