Projection of global copper demand in the context of energy transition

Abstract

The energy transition, driven by the widespread adoption of renewable energy technologies and electric vehicles, is significantly influencing global copper demand due to copper's critical role in energy-efficient applications. This study employs an autoregressive distributed lag (ARDL) model to project global copper demand through 2030, incorporating key variables such as gross domestic product (GDP) per capita, copper prices, and aluminum prices as a substitute. The analysis adjusts copper consumption data to account for the contributions of wind and solar energy systems and electric vehicles, highlighting their growing influence on demand. Results show that GDP growth remains the primary driver of copper demand, with a strong correlation between annual changes in GDP and demand fluctuations. Copper demand demonstrates a slow response to price variations, with significant lagged effects. While aluminum serves as the primary substitute for copper, its limited performance in critical applications underscores copper's continued dominance in energy-related technologies. The adjusted model reveals that traditional econometric approaches may underestimate the impact of clean energy technologies, projecting substantial increases in copper demand by 2030 under different energy transition scenarios. These findings highlight the importance of integrating emerging trends into projection models to guide policymakers and industry stakeholders in addressing supply constraints, market volatility, and sustainability challenges.