The world is facing an unprecedented and accelerating demand for minerals. Competing demand leads to pressure on prices
In 2021, Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA), warned of “a looming mismatch between the world’s strengthened climate ambitions and the availability of critical minerals that are essential to realizing those ambitions.”(3)
According to the IEA’s “Sustainable Development Scenario” (SDS), which charts a pathway to fully address the goals set out in the Paris Agreement, the total demand for minerals to support use of decarbonized energy is set to quadruple between 2020 and 2040.(4)
The IEA’s forecasts based on the SDS climate scenario show that mineral demand is expected to:
- nearly triple for low-carbon energy production (notably due to material intensive offshore wind energy generation) by 2040
- increase by at least 30 times for electric vehicles (EVs) and battery storage (from 0.4 million metric tons in 2020 to 12.7 million metric tons in 2040)
In a more demanding scenario (Net Zero 2050), demand would be even higher (21.5 million metric tons in 2040) for EVs and battery storage, which clearly challenges the earth’s ability to support such demand.
EVs and battery storage, in particular, are expected to account for about half of the mineral demand growth from clean energy technologies over the next two decades, according to the IEA.
EVs require six times more minerals than internal combustion powered vehicles.