The U.S. Department of Energy’s (DOE) new designation of copper as a critical material follows the lead of the EU, China, Japan, and others in labeling the metal as critical – and shows copper is on the cusp of a generational shift from an everyday material to a geopolitically significant commodity.
This new strategic importance stems from copper’s criticality to a wide range of clean and renewable energy technologies, such as waste heat recovery and electric vehicles, which can reduce global GHG emissions by two-thirds. As a result, experts estimate copper demand is set to double between 2035 and 2050 as industries work to meet their climate goals.
It is no wonder, then, that some are referring to copper as “the new oil.” To reflect this new reality, policymakers in Washington must treat copper as a critically important commodity.
This need has become even more urgent due to the government’s own sustainability ambitions, which will drive copper demand for years to come. The Bipartisan Infrastructure Plan and the Inflation Reduction Act both contain billions of dollars in funding for technologies to power the U.S. economy, from the increased copper needs of electric vehicles to renewable energy generation from solar and wind sources.
Adding copper to the U.S. Geological Survey’s (USGS) list of critical minerals is, therefore, an incredibly important step in the process of treating the material with the strategic importance it deserves. Although the 2022 list did not include copper—despite its meeting every component of the USGS’s definition of a critical material—a bipartisan group of senators, congressmen and governors are calling on the USGS to add copper to the list as soon as possible.
The critical materials designation from DOE is a strong step in the right direction, but joining the USGS list – and the authority and benefits it provides – is crucial.
To advance the energy transition in the U.S. and beyond, a series of continued investments and lasting regulatory changes must be made.
Crucially, regulatory certainty and labelling copper as a critical mineral will help secure the copper supply needed to meet the U.S.’s clean energy goals. However, more can be done – not only within the U.S. but also globally – to drive the transition to a green future.
The copper industry is committed to meeting demand sustainably. Continued investment by members of the of the International Copper Association (ICA), which represents some of the world’s largest copper producers, showcases a determination to go beyond expectations to take a leadership role in the energy transition.
To achieve this, ICA and its members launched Copper—The Pathway to Net Zero earlier this year, a roadmap outlining a collective ambition among ICA’s members to reach net zero in Scope 1 and Scope 2 emissions by 2050, with Scope 3 reductions as close as possible to net zero over the same timeframe.
As directed by the ICA roadmap, companies will rely on a variety of abatement levers to make this happen – from equipment electrification and energy efficiency to alternative fuels and the decarbonization of local grids. ICA members have already started on these initiatives: Freeport-McMoRan has cut carbon emissions by 21% with innovative grinding rolls, and Rio Tinto has shut down the last coal power plant at its Kennecott mine and is purchasing renewable energy certificates totalling 1.5 million Megawatt hours.
Copper is an important industry in the U.S. with global influence. Not only is it the world’s fifth-largest copper producer, but the U.S. also holds the world’s sixth-largest copper reserves. Copper’s importance will continue to increase, and industry is playing a strategic role in this process.
The shift from a global economy built entirely on oil to a digitized and electrified future, with copper at its foundation, has already begun. If Washington wants the U.S. to lead this global shift, it must recognize copper as a critical material for the nation’s future economic and national security.
Source: Real Clear Energy