A chronic supply gap in copper, a metal essential to electrification and energy transition globally, could emerge in a few years and threaten efforts to fight climate change through decarbonisation, S&P Global said. The shortfall could rise from 1 million tonnes in 2025 to as high as 9.9 million tonnes in 2035, if the operating rates of mines and refineries remain at last year’s 81 per cent, the US-based financial and commodities information provider said in a report published on Thursday. The gap in 2035 could amount to a fifth of the demand needed for the world to achieve net zero emissions by 2050. This, scientists say, is required for reaching the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius by 2100 to avert disastrous climate change effects. “Substitution and recycling will not be enough to meet the demands of electric vehicles [EVs], power [distribution] infrastructure and renewable [power] generation,” S&P said. “Unless massive new supply comes online in a timely way, the goal of net zero emissions by 2050 will be short-circuited and remain out of reach.” China’s state-owned firms urged to act, not just talk, on carbon neutrality These findings are significant because about 83 kilograms of copper are used in an average pure electric car, nearly four times that in a conventional one and double that of a hybrid model, according to International Copper Study Group, an inter-governmental organisation. Moreover, EV and low carbon power generation-related copper demand could jump nearly five times to 6.5 million tonnes by 2035 from 2020, and make up 15.3 per cent of total copper consumption, according to Wood Mackenzie, the London-based energy and commodities consultancy. Even in a “high ambition scenario”, where high prices induce a record high production capacity utilisation of 96 per cent, a shortfall of 1.6 million tonnes is expected for 2035, the study said. Global refined copper demand is forecast to nearly double to 49 million tonnes in 2035 from last year. This best-case scenario will also see global refined copper output grow at an average annual rate of 4.7 per cent to 47.3 million tonnes in 2035, from 25 million tonnes last year. By contrast, output of just 33 million tonnes is expected if plant utilisation is not lifted. Greater Bay Area is key to Hong Kong’s climate goals: SCMP Summit “We have a theoretical supply gap opening up after 2025,” said Jonathan Barnes, copper markets principal analyst at Wood Mackenzie. “This is caused by declining ore grades at existing operations, a lack of visibility on the future pool of [potential] greenfield mine projects, brownfield expansions and mine life extensions.” Global annual capital expenditure on new mining capacity is projected to stay at a low range of US$50 billion to US$70 billion range through to 2024, well below a peak of around US$125 billion in 2013, according to a China Merchants Securities report published in March. This would limit the amount of new capacity addition. China, the top carbon dioxide emitter accounting for 31 per cent of global emissions, makes up 54 per cent of the world’s copper consumption as it ramps up world-leading volumes of EVs, wind turbines and solar panels. Its share is projected to fall to 43 per cent by 2050, as other nations – most notably India, the United States, Vietnam and Mexico – take up bigger shares of demand. China’s firms trail the world in setting net-zero goals, study finds China imports the bulk of copper ore it needs to feed its refineries. While contributing only 8.9 per cent of global raw copper ore output, it is home to 47 per cent of the world’s copper smelting capacity and 42 per cent of its refining capacity, according to S&P. The US, which considers China a strategic rival, will need to import between 57 and 67 per cent of its copper needs by 2035, up from half currently, it projected. “In the 21st century, copper scarcity may emerge as a key destabilising threat to international security,” S&P said. “The challenges this poses are reminiscent of the 20th century scramble for oil, but may be accentuated by an even higher geographic concentration [of supply].” China’s tree planters are devising ways to make money by doing good Chile, the top raw copper ore producer, accounted for 26.7 per cent of global output, followed by Peru’s 10.5 per cent, according to the US Geological Survey.