Copper Shortage Could Stymie Net-Zero Energy Goals

WASHINGTON — A shortage of one essential material could curtail America’s transition to new sources of clean energy according to a new report from S&P Global. The world’s copper supply is unlikely to be able to meet demand for all of the new technologies critical to achieving goals for net-zero by 2050.

“Copper is the metal of electrification and absolutely essential to the energy transition,” Daniel Yergin, vice chairman, S&P Global, said in a release of the report. “Given the global consensus for net-zero emissions by 2050, it is critical to understand the physical materials required for achieving that ambition.” 

S&P Global’s study, entitled The Future of Copper: Will the Looming Supply Gap Short-circuit the Energy Transition? suggests that in order to establish and deploy the technologies essential to achieving net-zero by 2050 goals, global copper demand would nearly double over the next decade, and then exceed 53 million metric tons by 2050 — more than all the copper consumed in the world between 1900 and 2021. 

There is little to no chance that supply could meet this record-high level of demand.

“The world has never produced so much copper in such a short timeframe as would be required. On current trends, the doubling of global copper demand by 2035 would result in significant shortfalls,” Yergin said.

S&P’s study was done in response to concerns about the availability and reliability of minerals needed to meet climate goals by entities in the U.S. as well as the European Union, International Monetary Fund, World Bank, and International Energy Agency. And while it makes no policy recommendations, it does assess some of the possibilities to bring significant new copper supplies online in the fastest way.

“This study is a wake-up call,” Yergin said during a presentation of the study, because even were there to be record levels of mining and recycling, there may not be enough copper to meet demand. 

While copper is used in many consumer items, including tools, jewelry, musical instruments and kitchenware, its primary uses have traditionally been in electrical wiring, roofing, plumbing and industrial machinery. The push to net-zero technologies is surging copper demand for all of those, plus technologies for electric vehicles, charging infrastructure, solar PV, wind and batteries.

Some additional supply could come from recycling, but even an aggressive recycling program wouldn’t be nearly enough, and developing new mines — which the International Energy Agency estimates would take about 16 years — likely couldn’t extract enough supply to meet the demand of net-zero emissions by 2050.

And all of this doesn’t just affect the energy transition, but all of the markets that use copper and the global economy writ large. 

“The challenge for all active participants in the energy transition will be to manage often competing and seemingly contradictory priorities in this new era of copper demand,” said John Mothersole, director of non-ferrous metals at S&P Global Market Intelligence. 

“Technology and innovation will both be critical in meeting this challenge, as will partnership between governments, producers and end-users. ‘Dr. Copper’, as the metal is called, may well currently be, as it has been in the past, a leading indicator of a slowdown in economic growth or recession, but the overall supply outlook for the years ahead is extremely tight,” he concluded.

Kate can be reached at [email protected]