Kirsten Hund, Daniele La Porta, Thao P. Fabregas, Tim Laing, John Drexhage
11 May 2020
Limiting global warming to 1.5°C–2°C as outlined by the Paris Agreement, and achieving Sustainable Development Goals 7 and 13, will require a large-scale shift to clean energy, provided by solar panels, wind turbines and batteries.
In a report released on 11 May 2020, the World Bank forecast that this will shape the supply and demand of critical minerals for the foreseeable future, with low-carbon energy sources significantly more mineral-intensive than their fossil-fuel-based counterpart technologies. The report provides an analysis of how the shift to a cleaner energy system could impact mineral demand, and considers the actions that each stakeholder can take to minimize the negatives repercussions of this process.
The key findings and recommendations are summarised below.
Under a 2-degree scenario (2DS) as discussed above, production of graphite, lithium, and cobalt will need to be increased by more than 450 per cent by 2050 – from 2018 levels – to meet demand. These projections are a conservative estimate, not taking account of the associated infrastructure needed to support the deployment of these technologies or the physical parts.
Demand varies significantly from one technology to another. Under a 2DS, solar PV will account for 87 per cent of aluminium demand from energy technologies, while wind and geothermal will account for 98 per cent and 64 per cent of zinc and titanium demand respectively. Solar PV and wind, combined, account for 74.2 per cent of all copper demand, while battery storage accounts for all graphite and lithium demand, in this analysis.
Each mineral carries a different demand risk depending on whether it is cross-cutting or concentrated. Cross-cutting minerals, such as copper, are used across a wide variety of clean energy technologies, and therefore have stable demand as they do not depend on the use of any one specific technology. Concentrated minerals on the other hand, such as lithium, graphite, and cobalt, are needed only for one or two technologies, and therefore have a greater degree of uncertainty attached to demand for them going forward.
Another key factor to take into account when considering the impact of future demand is current production. For example, production of graphite and lithium would need to increase by nearly 500 percent by 2050 to meet the demand forecast under a 2 degrees scenario, while demand for aluminium under the same scenario would be only 9 percent of current production levels.
In discussion of demand for critical minerals, recycling is often presented as a potential solution. While this is a vital practice, and can play an important role, at present there is a lack of existing material to recycle and reuse, and a number of technological barriers. Mining remains essential to supply for the time being.
The increase in demand presents a number of challenges.
To date, the mining industry accounts for up to 11 percent of global energy use, and increased demand for minerals and metals would only push this figures higher. World Bank research shows that, despite this, low-carbon technologies account for only 6 per cent of the emissions generated by fossil fuel technologies, but still the environmental footprint cannot be overlooked. For example, the production and operation of renewable energy and storage technologies will account for around 16 gigatons of carbon dioxide equivalent emissions up to 2050 — which is similar to the 2018 emissions of the United States and China. This does not even factor in the emissions from transportation.
Increased demand for minerals will also impact heavily upon a number of mineral-rich developing countries. While they stand to benefit from the rise in demand, it is also important to manage the material and climate footprints associated with increased mining activities. A failure to mitigate emissions and other potentially harmful environmental and social effects of increased mineral production, could see clean energy technologies loose much of the support they have today.
ADDRESSING THE CHALLENGES
To address these challenges, the World Bank has launched the Climate-Smart Mining Initiative to ensure that minerals for the clean energy transition are produced and supplied sustainably and responsibly, while enabling developing countries to benefit from this seismic shift. The initiative works with governments, development partners, industries, and civil society.
It stresses that stakeholders throughout the mineral and renewable energy supply chains, from climate stakeholders, to clean-energy stakeholders, to the mining community all have a role to play in ensuring that the transition to cleaner energy systems does not come at an unsustainable cost to the climate, the environment, or the communities directly affected by mining activities.