Sustaining green energy shift: is the world's metal supply sufficient?
The energy sector is undergoing a significant transformation, moving away from a centuries-old thermal/combustion model towards electrification via low carbon sources such as mechanical energy, photovoltaic, or nuclear. This transition requires various types of metals at an unprecedented scale.
One of the key players in this transition is metal, particularly those that are future-mined. These metals will demand higher prices to be economically viable, given the abundance of metal ore in the earth's crust. However, the question of whether we have the mining capacity to meet future demand has emerged. Projections suggest that the current supply trajectory and investment pipeline will not be sufficient to meet future demand for these metals.
Scrap will play an increasingly important role in the energy transition due to its carbon advantage. For instance, aluminum from scrap has a 95% lower carbon footprint compared to primary aluminum.
Between now and 2040, known copper resources in the earth's crust alone are enough to cover twice the demand under a 2-degree scenario. This indicates that with proper planning and investment, we may be able to meet the demand for these metals.
The race to secure resources for the energy transition seems to be dominated by China, which appears to be far ahead in this race. However, many governments are ramping up efforts to secure resources for the energy transition, playing catch-up with China. Countries like Germany and other NATO members are significantly increasing their armament efforts to secure critical resources for both defense and the energy transition, aiming to reduce dependence on China, which dominates processing of strategic minerals like tungsten with about 90% control.
In the green energy transition, metals play a central role in the production, transport, and storage of energy. As we move towards a more sustainable future, it is crucial that we address the challenges posed by the demand for these metals and ensure that we have the capacity to meet this demand in a sustainable and responsible manner.
