Will the world run out of essential resources by 2050?

Total global demand for materials is expected to increase by about 30% from just over 9 billion tonnes (Gt) in 2022 to over 12 Gt in 2050. Continued economic expansion and population growth are expected to be the main drivers of the growing demand for more materials. The largest consuming sectors are mature industries such as construction, consumer goods, packaging and transportation, which accounted for about 90% of material demand by weight in 2022. The construction sector was by far the largest of the four, accounting for almost three-quarters of all materials used in 2022.

(Figure 1) While construction will continue to dominate, materials needed for the energy transition will experience the largest relative increase in demand towards 2050.

The materials in greatest demand during this period are traditional materials such as cement, timber, iron and steel, which are the building blocks of the world economy, with the vast majority going to construction. Cement is used in almost all construction and infrastructure activities and is often reinforced with steel beams or rods.

Although they only represent a small fraction of the total materials by mass, renewable energy and batteries are expected to grow the most in relative demand through 2050, driven by the energy transition. The battery sector is set for a compound annual growth rate (CAGR) of 13%, while the renewable energy sector is expected to grow 5% per year through 2050 (Figure 1).

While much of the material demand from the energy transition is for materials with mature supply chains, such as iron and steel, glass, and cement (Figure 2), the energy transition requires significant expansion of certain energy materials value chains to be successful. Battery materials, such as lithium, and metals commonly used as electrical conductors, such as copper and aluminum, are expected to require the highest supply growth compared to 2022 levels to enable the energy transition (Figure 3).

The increased demand for battery materials is driven by the rapid electrification of road transport and battery storage systems. All commercial battery technologies are dependent on lithium-ion technologies, with lithium expected to see the highest growth of all materials. Nickel-manganese-cobalt (NMC) battery cathodes are expected to continue to hold high market shares over the next decade, leading to strong growth for nickel and cobalt as the battery sector will require a significant share of global production. Graphite has almost 100% market share in battery anodes, in addition to its use in industrial equipment, castings, and similar applications.

The demand for copper and aluminum is growing due to their popular applications as electrical conductors. Copper is most commonly used in wiring, electrical equipment, and electric motors, which are needed in energy transformation segments such as electric vehicles, energy storage, solar and wind power. Aluminum is expected to replace copper as an electrical conductor in some applications due to its lighter weight and lower cost.

The demands of the energy transition are expected to trigger a huge increase in demand for certain critical materials that do not necessarily have a mature value chain, resulting in an explosion in expansion from current levels. Furthermore, the rapid expansion in energy transition sectors is expected to change trade flows of mature materials that will need to be redirected to new energy transition value chains. These developments will create both challenges and opportunities for governments, regulators and companies, where proper positioning is key to succeeding in the energy transition.

By Rystad Energy

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