Electrification is arguably the most important revolution of this age and the world is at a tipping point to transition to a more sustainable, electrified society. Among the minerals needed to power this electrification pivot is copper. It is used in everything from home electronics to electric vehicle (EV) batteries, earning it the nickname “the metal of electrification.”
The world, however, is not sourcing enough copper to meet skyrocketing demand and reach net-zero carbon targets. A Bloomberg report anticipates that by 2040, copper demand will increase by 53%, but supply by only 16%.
EVs, which are at the forefront of the electrification revolution, account for 55% of copper demand and require 2.5 times more copper than an average internal combustion engine car. Indeed, the push for EVs has taken on unique importance, particularly in the US, which plans to reduce emissions by increasing EV production. Copper is also critical for storing energy from renewable energy sources like wind and solar.
The severe shortage of copper and its rising cost, alongside other limitations to the production of batteries, keep EV manufacturers awake at night. Without batteries in sufficient numbers, automakers can’t build and sell EVs at the pace consumers want. Furthermore, as the cost of raw materials, especially copper, increases, they will be forced to either raise prices and risk pricing out some consumers or reduce their profit margins.
The severe copper shortage may very well last decades
As EVs and renewable energy become more pervasive, other copper-reliant industries will also find the metal harder to source. New mining initiatives will need to unfold at unprecedented speeds for the world to effectively take full advantage of this electric revolution, reduce emissions, and ultimately mitigate climate change. But these solutions can take years to make an impact, and can be harmful to the environment, intensifying the need for more innovation.
To meet net-zero targets, the world needs novel technologies and other innovative solutions that could mitigate the shortage of copper by maximising existing resources. This includes using alternatives to copper, reducing copper consumption while improving efficiency, and adopting a sustainable circular economy approach to copper usage.
Investing in reliable sources and stable supply chains
Boosting copper production can help stabilise supply chains and guard against the disruptions plaguing global markets. Yet the severe copper shortage may very well last decades. This has created a dire need for better mining methods and processes that maximise extraction while minimising cost and environmental impact.
The issue is not one of capacity—the world is not in danger of running out of copper. Indeed, much of the world’s estimated copper stores have not yet been tapped, but accessing the rest of those copper stores is far too long an endeavour. Mining deals to power EV production are indeed occurring at a record pace but still not quickly enough.
It is also important to recognise that boosting copper production also has detrimental environmental effects like land degradation, polluting the surrounding air and water, and more. Improving copper usage efficiency is one of the best solutions to not only get the materials needed but be smarter with the materials at hand and reduce ecological harm.
EV manufacturers must be efficient with every ounce of copper, at every point of the metal’s life-cycle from extraction and production to the end-user journey and recycling. A critical aspect of economical copper use is the ability to sustainably recycle and reuse it. Consumer scrap, however, is difficult to manage. The copper collection rate for consumer and electronic goods is only 53% and the global end-of-life recycling rate for copper is 40%.
Estimates for battery recycling vary across regions and battery types; the recycle rate for lithium-ion batteries is a dismal 5%. But more can be done across the board. To mitigate the waste of copper in batteries and electronics, current methods for recycling electronics must be scaled up or replaced by new methods for returning copper into circulation. Governments are already recognising the urgency. In June, the US Department of Energy announced a US$192m investment to fund new projects and research for the recycling of batteries and consumer products.
Recent breakthroughs in battery technology are helping improve copper efficiency and advance alternative battery production methods. Batteries that can maximise the use of copper will be more energy-dense, thus providing more “power” at a lower cost and with lower overall copper usage. But more R&D is needed.
Improving copper usage efficiency is one of the best solutions to not only get the materials needed but be smarter with the materials at hand and reduce ecological harm
Accordingly, the Biden administration recently announced an advanced battery research consortium to support technological breakthroughs in EV battery technologies and bolster recycling capacities. President Biden even took the dramatic step of invoking the Defense Production Act, usually reserved for crises like war, to shore up the production of critical minerals.
In the US alone, transitioning to EVs could reduce greenhouse gas emissions by 30%-45%, and since batteries account for 30-40% of EV costs, maximising copper use means lower prices for producers and consumers alike. Furthermore, by reducing the amount of copper that is pulled from the earth, sustainability goals become more achievable. But as copper becomes increasingly scarce and, in turn, expensive, automakers and environmental agencies are feeling the copper crunch.
The effort to combat this scarcity must be a joint effort—one that combines the innovation of cutting-edge companies with economic and regulatory support from government subsidies and private investment. The U.S. Inflation Reduction Act (IRA) is a good first step, but without concrete steps to bolster these initiatives, the copper crisis will no doubt persist. Considering only some nations have copper reserves, while others hold the capacity to extract and refine it, international cooperation is also critical. Only a multifaceted, multinational effort will effectively maximize the usage of copper, now and in the future.
As with any world-changing innovation, the weight of the challenge is only matched by the human capacity for ingenuity. We must continue to innovate if we are to drive towards an age of sustainability with an electrified, decarbonized economy. And we must act before it is too late.
About the author: Moshiel Biton is Chief Executive Officer and Co-Founder of Addionics