Crisis in Copper Supply

author: FutureCar Staff    

Moshiel Biton explores the implications of the "severe" shortage of copper and its impact on the electrification revolution. Copper is a crucial mineral for powering the transition to a more sustainable, electrified society. It is used in various applications, from home electronics to electric vehicle (EV) batteries, earning it the nickname "the metal of electrification."

However, the world is not sourcing enough copper to meet the increasing demand and reach net-zero carbon targets. According to a Bloomberg report, copper demand is projected to increase by 53% by 2040, while supply is only expected to grow by 16%.

EVs, which play a significant role in the electrification revolution, account for 55% of copper demand and require 2.5 times more copper than traditional internal combustion engine cars. The push for EVs is particularly important in the US, where there are plans to reduce emissions through increased EV production. Copper is also essential for storing energy from renewable sources like wind and solar.

The shortage of copper, along with other limitations in battery production, poses challenges for EV manufacturers. Without a sufficient supply of batteries, automakers cannot meet consumer demand for EVs. Additionally, the rising cost of raw materials, especially copper, may force manufacturers to either increase prices or reduce profit margins.

The severe shortage of copper is expected to persist for decades. As EVs and renewable energy become more prevalent, other industries reliant on copper will also face difficulties in sourcing the metal. To effectively take advantage of the electric revolution and mitigate climate change, new mining initiatives need to be implemented at an unprecedented pace. However, these solutions can take years to make an impact and may have adverse environmental effects, emphasizing the need for more innovation.

To achieve net-zero targets, novel technologies and innovative solutions are required to address the copper shortage. This includes exploring alternatives to copper, reducing consumption while improving efficiency, and adopting a sustainable circular economy approach to copper usage.

Investing in reliable sources and stable supply chains can help stabilize copper production and mitigate disruptions in global markets. However, the severe shortage of copper is expected to persist for decades, highlighting the need for better mining methods that maximize extraction while minimizing cost and environmental impact.

Efficient use of copper is crucial for EV manufacturers at every stage of the metal's life-cycle, from extraction to recycling. Sustainable recycling and reuse of copper are vital, but consumer scrap collection rates are low. The recycling rate for copper in electronic goods is only 53%, and the global end-of-life recycling rate for copper is 40%. More efforts are needed to scale up recycling methods and return copper into circulation.

Recent breakthroughs in battery technology are helping improve copper efficiency and advance alternative battery production methods. Batteries that maximize the use of copper can provide more energy at a lower cost and with lower overall copper usage. However, further research and development are necessary.

The Biden administration has announced initiatives to support technological breakthroughs in EV battery technologies and strengthen recycling capacities. By maximizing copper use, EVs can significantly reduce greenhouse gas emissions and lower costs for producers and consumers. However, as copper becomes scarcer and more expensive, automakers and environmental agencies are facing challenges.

Addressing the copper shortage requires a joint effort between innovative companies, government subsidies, private investment, and international cooperation. Concrete steps need to be taken to support these initiatives and maximize the usage of copper.

The challenge of the copper shortage can only be overcome through human ingenuity and continued innovation. It is crucial to act now to drive towards a sustainable, electrified economy before it is too late.

About the author: Moshiel Biton is the CEO and Co-Founder of Addionics.

FutureCar Staff