Will the world run out of essential resources by 2050?

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

(Figure 1). While construction will continue to dominate, materials needed for the energy transition will see the biggest relative jump in demand towards 2050.

The materials most in demand throughout the period are traditional materials such as cement, wood and iron and steel, which are the core elements of the global economy, the vast majority of which are used for construction. Cement is used in almost all construction and infrastructure activities and is often reinforced with steel beams or bars.

Although only a small fraction of total materials by weight, renewable energy and batteries will grow the most in relative demand towards 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 by 5% annually until 2050 (Figure 1).

Although much of the demand for materials in the energy transition is for materials with mature supply chains, such as iron and steel, glass and cement (Figure 2), the energy transition requires a significant expansion of certain value chains related to energy materials to succeed. Battery materials such as lithium and metals commonly used as electrical conductors such as copper and aluminum will require the largest increase in supply compared to 2022 levels to enable the energy transition (Figure 3).

The increased need for battery materials is driven by the high pace of electrification of road transport and battery energy storage systems. All commercial battery technologies depend on lithium-ion technologies, and lithium is expected to see the greatest growth of any material. Nickel-manganese-cobalt (NMC) battery cathodes are expected to continue to command high market shares over the next decade, resulting in strong growth for nickel and cobalt as the battery sector will need significant shares of global production. Graphite has an almost 100% market share in battery anodes, in addition to being used in industrial equipment, castings and the like.

Demand for copper and aluminum is increasing due to their popular applications as electrical conductors. Copper is mostly used in wiring, electrical equipment and electric motors, which are needed in energy transition segments such as electric vehicles, energy storage, solar and wind. Aluminum is expected to replace copper as an electrical conductor in some applications due to its lighter weight and lower cost.

The requirements of the energy transition are expected to trigger a massive increase in demand for some critical materials that do not necessarily have a mature value chain, which will therefore see explosive expansion from current levels. In addition, rapid expansion in energy transition sectors is expected to alter trade flows of mature materials, which will need to be redirected to new energy transition value chains. This development will create both challenges and opportunities for governments, regulators and companies, where the right positioning is crucial to succeed in the energy transition.

Of Rystad Energy

More top reads from Oilprice.com