Total global materialem dand is expected to rise by about 30% from more than 9 billion tonnes in 2022 to more than 12 billion tonnes in 2050. Continued economic expansion and population growth are expected to be the main drivers of the growing need for more materials. The most consuming sectors are mature industries such as construction, consumer products, packaging and transportation, which accounted for about 90% of the demand for materials by weight in 2022. The construction sector was the largest of the four sectors, accounting for nearly three-quarters of all materials consumed in 2022.
The most demanded materials throughout the period are traditional materials such as cement, wood, iron and steel, which are essential building blocks for the global economy, with the vast majority flowing into construction. Cement is used in almost all construction and infrastructure activities and is often reinforced with steel beams or bars.
Although renewable energy and batteries account for only a small share of total materials by weight, they will increase relative demand significantly by 2050, driven by the energy transition. The battery sector is expected to register a compound annual growth rate of 13%, while the renewable energy sector is expected to rise by 5% annually by 2050.
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Also, although a large share of material demand from the energy transition relates to materials with mature supply chains, such as iron and steel, glass and cement, the energy transition requires a significant expansion of some energy value chains to succeed. Battery materials such as lithium and metals commonly used as electrical conductors, such as copper and aluminum, are expected to require the highest supply growth compared to 2022 levels to enable the energy transition.
The growing need for battery materials is driven by the high pace in electrification of road transport and battery energy storage systems. All commercial battery technologies are based on lithium-ion technologies, and lithium is expected to see the highest growth of any material. Nickel-manganese-cobalt (NMC) battery cathodes are expected to continue to rise market shares over the next decade, leading to a strong nickel-cobalt boost as the battery industry will need significant shares of global production. The market share of graphite is almost 100% in battery anodes, in addition to its use in industrial equipment, casting and the like.
Copper and aluminum are in high demand due to their common applications as electrical conductors. Copper is mostly used in cables (TADAWUL:2370), electrical equipment and electric motors, which are in demand in energy transition sectors such as electric vehicles, energy storage, solar and wind energy. Aluminum is expected to replace copper as an electrical conductor in some applications due to its lighter weight and low cost.
The demands of the energy transition are expected to spur exponential growth in demand for some critical materials that do not necessarily have a mature value chain, and will therefore see a dramatic expansion from current levels. Moreover, rapid expansion within the energy transition sectors is expected to change trade flows for mature materials, which will need to be redirected to new value chains for the energy transition. This development will create challenges and opportunities.
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