Photo: Alex Banner

In the 2023 Critical Minerals Market Review, released in July 2023, the IEA examines supply and demand factors for the critical minerals required by the Energy Transition. The report assesses demand in three scenarios: Announced Pledges (APS), Net Zero Emissions by 2050 (NZE), and the Stated Policy (STEPS) scenario.

In the Net Zero Emissions by 2050 (NZE) scenario, the IEA projects that demand for critical minerals will increase by 3.5 times by 2030. A significant portion of this demand will come from clean technology applications. Green Demand refers to demand from clean technologies such as EVs, Wind, Solar, Hydrogen and Grid Battery Storage.

In this article, we take a closer look at the drivers of 'Green Demand' in the NZE scenario and how this will impact the overall demand for lithium, nickel, cobalt, and copper.

Currently, green demand accounts for only 22% of copper demand. However, in the NZE scenario, this is projected to rise as high as 51%. The total demand for copper is projected to increase from 25.5 million tonnes in 2022 to 39.7 million tonnes in 2050.

Green demand is expected to drive 82% of that growth. Specifically, demand from electricity networks alone is projected to add 5.6 million tonnes of demand, in addition to another 6 million tonnes from EVs, wind, solar, and grid battery storage.

The 78% of 2022 demand not classified as green comes primarily from copper's usage in building and construction, telecommunications, electronics, transportation, and electrical wiring.

The green demand for nickel is anticipated to increase from 16% of total demand in 2022 to as high as 65% by 2035, primarily driven by EVs. The annual nickel demand from batteries is projected to surge by 3 million tonnes by 2035, which is roughly equivalent to the entire nickel market in 2022.

These projections rely on the assumption that lithium-ion batteries with nickel-based cathodes will remain a competitive battery technology.

Other sources of clean tech demand for nickel include:

• • Nickel is used in the production of steel components such as gearboxes, ladders, fasteners, and control panels for wind turbines.
  • Geothermal infrastructure is steel intensive.
  • Nickel is commonly used as a cathode material in alkaline electrolysis for hydrogen production.

In 2022, 56% of Lithium demand came from lithium-ion batteries used in EVs and grid battery storage. The remaining 44%, unrelated to clean technology, is derived from:

• • • • Glass and ceramics - Lithium is used in the production of high-strength, lightweight glass and ceramics. It is also used in the production of lenses for cameras and telescopes.
      • Lubricants - Lithium grease is a common type of grease that is used in a variety of applications, including automotive, aerospace, and industrial.
      • Metallurgical industry - Lithium is used in the production of aluminum and other metals, and in some types of steel.
      • Medicine - Lithium is used as a medication to treat bipolar disorder. It is also used to treat other conditions, such as schizophrenia and depression.

Demand for lithium is projected to grow significantly in the coming years due to the increasing deployment of electric vehicles. In the NZE scenario, the IEA projects the fleet of EVs to grow at an average annual rate of around 40%. This would bring the total stock of EVs on the road globally to 380 million in 2030. 

Electric vehicle sales reach over 30 million in 2025 and over 70 million in 2030, a total of approximately 30% and 60% of all vehicle sales, respectively. 

Beyond EV batteries, the increasing adoption of grid battery storage systems adds further demand for lithium. Energy storage systems are used to store energy from renewable sources such as solar and wind power. They are expected to become increasingly important as renewables constitute an increasing share of power generation.

The only clean technology uses of cobalt tracked by the IEA involve batteries - for EVs and for grid storage. As with nickel, this assumes cobalt retains its position as a cathode material in a leading battery technology.

Currently batteries account for 40% of global cobalt demand. The IEA sees this rising to 58% by 2035 in the NZE scenario.

Besides batteries, cobalt is used in the production of superalloys, stainless steel, magnets, electronics, medical devices and in the production of cemented carbides.

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