Material and Resource Requirements for the Energy Transition

• Large investments and strong policy support are needed to ensure that the supply of some key minerals grows quickly and sustainably over the next decade to meet rapidly growing demand.
• There is no fundamental shortage of any of the raw materials to support a global transition to a net zero economy: geological resources exceed the total projected cumulative demand from 2022-50 for all key materials, whether arising from the energy transition or other sectors.
• Without strong action to improve materials efficiency, increase recycling or increase mined supply, there could be significant supply gaps for six key energy transition materials: lithium, nickel, graphite, cobalt, neodymium and copper.
• The analysis identifies four key actions policymakers, miners and manufacturers must take to reduce that risk and expand supply quickly and sustainably:
  1. Building new mines and expanding existing supply of materials quickly
  2. Building more diverse and secure supply
  3. Driving sustainable and responsible material production
  4. Boosting innovation and recycling to reduce pressure on primary supply

The Paris Climate Accord committed the world to keeping global warming to well below 2°C from pre-industrial levels, aiming ideally for a 1.5°C limit. To have a 90% chance of staying below 2°C and a 50% chance of limiting warming to 1.5°C, the world must reduce CO₂ and other greenhouse gases to around zero by mid-century, with a reduction of around 40% achieved by 2030.

Achieving this will require the rapid and large-scale rollout of multiple clean energy technologies, of which the most important support the massive expansion and complete decarbonisation of electricity supply, a deep electrification of most energy final uses, and a hugely expanded role for low-carbon hydrogen, primarily produced via electrolysis.

Building this new clean energy system will require a wide range of critical raw materials, from copper for wiring, steel for wind turbine towers, rare earth elements for electric motors, lithium, nickel and graphite for batteries, and silicon for solar photovoltaic (PV) panels. Supplying these materials will require large scale investments and rapid expansion of mining and refining capacity.

The key conclusions are that:

• The new clean energy system has manageable requirements for land, water and materials – and will lead to drastically lower emissions, helping to reach net-zero emissions and avoid future climate change and its impacts.
• Over the long term, there are sufficient resources of all the raw materials (and of land area and water) to support the energy transition, and in those cases where currently assessed “reserves” fall short of potential cumulative demand – in particular copper and nickel – reserve expansion can and will be achieved.
• There is major potential to reduce future cumulative demand for energy transition materials via technical innovation and recycling, which should be strongly supported and required by public policy.
• Mining will need to expand. Scaling supply rapidly enough to meet demand growth between now and 2030 will be challenging for some metals, in particular lithium, copper, nickel, cobalt, graphite and neodymium; but actions can be taken by governments and companies which would prevent any serious constraint on the pace of the energy transition.

• Given the risks related to the fast implementation of clean energy technologies, the supply of key materials for batteries and electric vehicles presents the greatest challenge to the electric vehicle industry growth.
• Batteries and EVs are the technology most at risk due to the potential for supply bottlenecks and gaps in 2030 for lithium, nickel, graphite, cobalt, neodymium and copper.
• Solar PV does not face any major material constraints; however, the production of polysilicon for solar panels faces challenges due to the high concentration in China and associated social and environmental risks. More significant challenges to solar deployment are more likely to appear around planning and permitting requirements and grid connection queues.
• The build-out of transmission and distribution grids could face challenges from high copper prices – although there is some potential for recycling and substitution of materials.
• The key issues are not the long-term feasibility or desirability of a clean energy system, but for corporates operating in this space to ensure they are managing the challenge of ramping up materials supply at the pace required. and ensuring mining for key materials occurs in a sustainable and responsible way, which manages and minimises local environment impacts.

For more information on this report please visit: https://www.energy-transitions.org/publications/material-and-resource-energy-transition/

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