Energy Transition Metals: Bottleneck for Net-Zero Emissions?

This article analyzes the potential bottleneck posed by four key metals—copper, nickel, cobalt, and lithium—critical for the global energy transition toward net-zero emissions (NZE) by 2050. Using structural vector autoregression (VAR) models with metal-specific demand (MD) shocks informed by historical data and International Energy Agency (IEA) consumption scenarios, the study finds that prices for these metals could reach historical peaks and remain elevated for over a decade under the NZE scenario, driven by inelastic short-term supply and rising demand for clean energy technologies. The production value of these metals is projected to nearly quadruple to approximately USD 11 trillion between 2021 and 2040, making their markets potentially as macroeconomically significant as crude oil. The findings highlight important implications for policymakers and integrated assessment models, suggesting that unaddressed metal supply constraints could increase the cost and delay the energy transition.