Looming copper supply shortfalls present a challenge to achieving net-zero 2050 goals

La inminente escasez de suministro de cobre presenta un desafío para lograr los objetivos cero neto para 2050

The challenge of meeting net-zero emissions by 2050 “will be short-circuited and remain out of reach” unless significant new copper supply comes online in a timely way, according to a new study by S&P Global that examines the growing mismatch between available copper supply and future demand resulting from the energy transition.

The study, entitled The Future of Copper: Will the Looming Supply Gap Short-circuit the Energy Transition? projects global copper demand to nearly double over the next decade, from 25 million metric tons today to about 50 million metric tons by 2035 in order to deploy the technologies critical to achieving net-zero by 2050 goals. The record-high level of demand would be sustained and continue to grow to 53 million metric tons in 2050 more than all the copper consumed in the world between 1900 and 2021..

The new study is in response to concerns raised by a number of authorities -including the U.S. government, the European Union, the International Monetary Fund, the World Bank and the International Energy Agency- about the availability and reliability of supply of minerals that will be needed to meet climate goals.

The study projections are based on a detailed bottom-up, technology by technology approach that leverages the S&P Global Multitech Mitigation scenario, which achieves net-zero goals by 2050 and is comparable to the International Energy Agency’s new Net Zero by 2050 scenario.

The demand surge would be driven, in large part, by the rapid, large-scale deployment of technologies such as electric vehicles, charging infrastructure, solar PV, wind and batteries. More copper intensive than their conventional counterparts, demand from these areas would nearly triple by 2035. At the same time, copper demand from traditional sources not directly related to the energy transition would continue to grow.

The demand surge would be driven, in large part, by the rapid, large-scale deployment of technologies such as electric vehicles, charging infrastructure, solar PV, wind and batteries. More copper intensive than their conventional counterparts, demand from these areas would nearly triple by 2035. At the same time, copper demand from traditional sources not directly related to the energy transition would continue to grow.

That leaves increases in capacity utilization (output as a percentage of an existing mine’s total capacity) and recycling as the main sources of additional supply, according to the study.

Under current trends—whereby both capacity utilization and recycling rates remain at their current 10-year global average—the study’s Rocky Road Scenario projects annual supply shortfalls that reach nearly 10 million metric tons in 2035. That is equivalent to 20% of the demand projected to be required for a 2050 net-zero world.

Even under the study’s optimistic High Ambition Scenario—which assumes aggressive growth in capacity utilization rates and all-time high recycling levels—the copper market will endure persistent supply deficits through most of the 2030s, including a deficit of nearly 1.6 million metric tons in 2035—much higher than any previous shortfall.

Under either scenario, there would not be enough supply to meet the demand of Net-Zero Emissions by 2050. The study also identifies eight key operational challenges that can constrain supply, ranging from infrastructure limitations, to changing tax regimes and permitting.

Such a supply gap would have broader consequences across the global economy, disrupting supply chains for both energy transition and non-energy transition industries, the study says. Given copper’s use in a wide range of end markets, it would also exert tremendous upward pressure on the cost of goods for global manufacturers as well as energy costs for consumers.

The study also finds that the burgeoning supply gap would exacerbate the growing reliance on copper imports in the United States, in particular. Imports made up nearly 44% of U.S. copper usage in 2021—up from just 10% in 1995. Under the study’s scenarios, that share would swell to between 57 and 67% by 2035. An intensifying competition for critical metals is very likely to have geopolitical implications, the study says.