On 11 May, the World Bank Group published a new report announcing that the production of minerals is expected to increase substantially by 2050 to meet the growing demand for clean energy technologies. For minerals used in energy storage technologies, such as lithium, graphite and cobalt, the demand is estimated to rise by almost 500%.
The increase in the demand of minerals will depend on the development of different energy technologies. Some minerals like copper or molybdenum are used in a wide range of technologies, while others, such as graphite and lithium, are mainly used for battery storage. Changes in these clean energy technologies might have significant consequences on the demand of certain minerals. The technology pathway that emerges from the green transition will shape the types of minerals that will experience the largest rises in demands. However, since these different energy technologies are changing fast, it’s difficult to predict the way in which the carbon transition will emerge.
The “Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition” report estimates that the carbon footprint of the production of minerals will only account for 6% of the greenhouse gas emissions generated by fossil fuel technologies. However, the report also recognizes that these emissions are not insignificant and that more innovation is needed to make the electricity sector greener.
The World Bank Group emphasizes that developing and committing to climate-smart mining principles is key in the clean energy transition process and could provide for essential fiscal revenues in developing countries that heavily rely on mineral production.
They identified providing a steady supply and stable prices for key minerals with minimal market disruptions as one of the main challenges related to the clean energy transition. Therefore, understanding the different demand risks related to different minerals is indispensable for deploying this transition.
Understanding the minerals market also allows to gain insights on potential recycling opportunities and needs. The report underlines the importance of recycling and reuse of minerals to meet the rising demand. However, upscaling recycling rates for minerals like copper or aluminum by 100% would still not be sufficient to meet the demand for renewable energy and energy storage.
The full report is available here.