(Finance) – Without an adequate supply of copper the transition ecological and the reduction of emissions global of CO2 cannot happen. The copper, the “metal of electrification”, is in fact essential for all energy transition plans. But the potential gap between supply and demand is expected to be very large as the transition progresses. Replacement and recycling will not be enough to meet the demand for electric vehicles (EVs), electric infrastructure and renewable generation. Unless a massive new supply is readily available, the net zero emissions target by 2050 will short out and remain out of reach.
They are some of the conclusions contained within a S&P Global report on the precious metal. The forecast is that copper demand will increase from the current 25 million tons (MMt) to around 50 million tons by 2035, a record level that will be maintained and will continue to grow to 53 million tons by 2050.
The gap chronic between the world supply and demand for copper which is expected to start in the middle of this decade will have serious consequences on the global economy and will affect the timing of reaching the net zero emissions target set for 2050. In particular, the deficit will reach 9.9 million tons in 2035 in the Rocky Road scenario, which is based on the continuation of current trends in mine capacity utilization and recycling of the recovered copper. This would mean a 20% drop from the level of supply required for the net zero emissions target by 2050.
The gap also emerges in the hypothesis of aggressive usage rates of capacity and recycling rates never achieved in the High Ambition scenario. Even under these aggressive assumptions, demand for refined copper will exceed supply in the forecast period up to 2035. Several authorities have already expressed alarm about the presence of sufficient minerals to meet the requirements for the net zero emissions target. by 2050. These include, among others, the US government, the European Union, the International Monetary Fund (IMF), the World Bank and the International Energy Agency (IEA).
The latter summed up the challenge as a shift from “an energy-intensive system of fuel to a high intensity one of minerals“.” Even though people write a lot about lithium, a lot about cobalt, copper is really essential because it is the metal of electrification and essential for the energy transition. And I think people underestimated it, “said the S&P vice president Dan Yergin to Axios. “This study is a wake-up call,” added Yergin. “It is one thing to express alarm and one more thing to say, well, how much do you have to do? And so we are not saying that the 2050 goals will not be achieved, but that it is more challenging than people think and we need to focus on it now, “Yergin stressed.