Copper Shortage Threatens Net-Zero Goals

Published On
Jul 27, 2022

The shift from fossil fuels to electric in the quest to reach net-zero emissions by 2050 just hit a snag with the copper shortage. A July 2022 S&P Global study, “The Future of Cooper: Will the Looming Supply Gap Short-circuit the Energy Transition?” reports that without a new copper supply, the climate goal will remain out of reach.

The study foresees copper demand practically doubling in the next 10 years, up to 50 million metric tons by 2035. This level of demand could continue and even increase to 53 million metric tons in 2050, driven largely by the very technology needed to achieve net-zero emissions.

Electric vehicles and their charging infrastructure, batteries and wind and solar power all depend on copper—more than traditional energy sources require. For example, an EV needs 2.5 times as much copper as traditional gasoline-powered internal combustion engine vehicles. It’s critical for renewable energy infrastructure—including cables, transistors and inverters—because of its electrical conductivity and low reactivity.

Even solar and offshore wind need two and five times more copper, respectively, per megawatt of installed capacity than gas- or coal-generated power. This increased demand needed for renewable energy deployment is expected to triple by 2035.

As Daniel Yergin, vice chairman for S&P Global, said in regard to the study, “Copper is the metal of electrification and absolutely essential to the energy transition.”

Meanwhile, demand for copper for more traditional uses is also expected to rise.

However, it’s not easy to ramp up production. According to the International Energy Agency, new copper mines take an average of 16 years to start producing. Ironically, as recently as October 2021, Reuters predicted a copper surplus at the same time the World Bank’s Commodities Market Outlook report witnessed falling prices. Even the S&P reported a 30% increase in copper reserves over the past 10 years, although it also notes a decrease in the quality.

However, with the impending energy transition, demand is increasing. Additionally, supply chain disruptions and labor shortages have resulted in rising costs of copper and other materials, such as aluminum and steel.

To offset the shortage, existing mines are increasing production and recycling efforts have amplified. The fact remains, however, that production and processing are concentrated in even fewer countries than oil production. Some of those regions, such as Chile, are experiencing water shortages, while others, including Australia, China and Africa, are enduring flooding and severe heat. All these issues hamper copper processing.

Another concern is that the current political volatility could lead to a geopolitical imbalance, with ensuing export restrictions and price hikes. The United States imported 44% of the copper used in 2021. That amount is expected to climb to 57% or more by 2035, making the country’s supply more precarious as reliance on outside sources escalates.

Another recession could curtail demand and drop copper prices, but the ultimate path to net-zero emissions through renewable energy will continue to strain the copper market it relies on.

About the Author

Lori Lovely

Lori Lovely is an award-winning writer and editor in central Indiana. She writes on technical topics, heavy equipment, automotive, motorsports, energy, water and wastewater, animals, real estate, home improvement, gardening and more. Reach her at: Lo...

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