How To Mitigate The Metal Intensive Energy Transition.

January 2026: The need, for low-carbon technologies in augmenting the transition to a climate neutral economy, is apprehended to increase further, which will also increase demand for the metals that are essential for manufacturing these technologies.

As evitable the energy transition is putting increasing pressure on many metal markets – copper, nickel, cobalt, and lithium is envisaged to attract a catapulting demand in the forthcoming periods. In some cases, this will lead to shortages further fuelling black marketing; but in most cases, supply will be more than sufficient to meet demand. It is noteworthy that there are innumerable dominant critical or strategic metals that are necessary and, above all, indispensable in the energy transition.

While distinguishing between ‘required’ transition metals (the truly indispensable metals) and the ‘relevant’ transition metals (slightly less indispensable), it was unveiled – which metals are particularly important for the production of four main clean technologies. That yielded the matrix of the impact of the trend in metal prices on the material costs for producing these clean technologies. These have further helped in envisaging how demand for these metals is expected to develop in the coming years in various IEA scenarios and what influence could the supply-demand balance of these metals have on the price trend for energy transition metals.

The energy transition is metal-intensive. Base metals namely aluminum, copper, nickel, and zinc, and steel, are widely used and processed in low-carbon technologies. Examples include solar panels, wind turbines, geothermal systems, and energy storage techniques. However, so-called ‘minor metals’ like rare earth metals, lithium, cobalt, vanadium, molybdenum, and manganese have demonstrated essential role playing traits in the production process of low-carbon technologies.

Geopolitical uncertainty is often a driver of price volatility in many commodities, as observed in the preceding year (2025). As opined, it will also be a driving force in 2026. Examples include shocks in global trade (with the US as the initiator with its adjustments to trade tariffs), China’s unique monopolistic position in many commodity markets, and rising global conflicts and tensions (Venezuela, Greenland, China-Taiwan, Ukraine, and the Middle East, such as Iran and Israel). This exposes the vulnerability of global supply chains to a large extent, while commodity prices reacting strongly to these trends.

United Nations Conference on Trade and Development (UNCTAD) has defined three categories of metals based on their relevance to the energy transition.

The first category consists of 27 metals. These are the ‘required’ ones for the transition. They include cobalt, copper, lithium, and four rare earth metals (out of a total of 17 rare earth metals).

The second category consists of ten metals that are ‘relevant’ to the transition, such as iron ore and steel, palladium, platinum and zirconium.

The third category consists of 23 other critical metals, such as gold, silver, lead and tungsten. These metals are much less relevant to the energy transition, but remain of strategic importance.

The first two categories are shown in the figure above on the right. For the third category, the data was too limited to show a representative price trend. According to UNCTAD, this distinction helps to indicate which metals are increasingly attracting geopolitical and economic attention due to their strategic importance for clean energy technologies.

In 2025, the index of required transition metals increased by 24%, while the index of relevant transition metals increased by 15%. The Rare Earth Element (REE) index comprising of 21 metals in total surged by 16%. In 2026, the momentum is expected to remain unchanged and the index of required transition metals has already risen further by approximately 09% in January. The other two indices increased by approximately 04% during January 2026.

The stronger increase in the index of required transition metals is mainly due to very strong price increases in 2025 for cobalt (+116%), lithium (+66%), chromium (+38%), and copper (+38%). The price of cobalt rose sharply due to export restrictions imposed in the Democratic Republic of Congo (DRC), which led to shortages in the market.

The lithium market also faced supply constraints during 2025. This was partly due to a sharp reduction in stocks and the closure of a large lithium mine in China.

Meanwhile, the chromium and copper markets both experienced continued strong demand, combined with some supply disruptions. The copper market was also strongly influenced by the trend in the dollar, more positive sentiment and economic data on the Chinese economy, and geopolitical tensions that further encouraged stockpiling.

Decarbonising the global economy is omnipotent for the massive deployment of clean technologies in the future. Wind turbines and solar panels provide renewable energy. Geothermal energy provides a constant, low-carbon source of energy for heating buildings and greenhouses, as well as for generating electricity. Batteries will also be needed to replace the use of fossil fuels in vehicles and to support the electricity grid when using intermittent renewable energy sources. These clean technologies require all kinds of metals, with some technologies requiring a greater mix of metals than others.

The table below depicts this mix. Energy storage requires a much larger mix of metals than other clean technologies. The table also shows that copper is one of the most important metals in the clean tech sector. Nickel and aluminum also remain important metals, but the proportions are slightly different here. Moreover, aluminum, like steel, is mainly used on a large scale for the exterior of many clean energy technologies, rather than for the technology itself.

When the metals required for each low-carbon technology is combined in a separate raw material cost index per technology, a striking data emerged that the material costs of all clean technologies in this discussions have increased since the beginning of 2025. These material costs rose sharply, especially at the end of 2025, mainly due to the very sharp price increases of some metals in 2025.

On balance, the price trends depicted below mean that material costs for energy storage rose the most, by 42% in 2025. Material costs for solar panels, wind turbines, and geothermal energy have increased to a lesser extent, by 25%, 21%, and 12% respectively in 2025. Although the total material costs for manufacturing low-carbon technologies fell sharply since their respective peaks in 2022, recent sharp price increases have now pushed them to above pre-coronavirus levels. In addition, material costs for solar panels have reached the peak level seen in 2022.

The International Energy Agency (IEA) has compiled three forward-looking scenarios that reflect the growth in demand for metals and minerals up to 2050. These scenarios are:

• the Net Zero Scenario, outlines a path to achieving net zero CO2 emissions by 2050;

• the Announced Pledges Scenario (APS), assumes that governments will fully and timely deliver on all climate-related pledges they have announced;

• the Stated Policies Scenario (STEPS), is the more conservative scenario and indicates the direction of emission reductions, based on current policy proposals.

The figure on the left below shows that whichever path or scenario is ultimately taken, demand for metals and minerals will increase. Growth in demand for metals and minerals will be strongest up to 2030. Growth in the Net Zero scenario will be by far the strongest until 2030, because this scenario will focus strongly on the use of clean technologies. This is much more the case than in the other scenarios. As a result, demand for transition metals increases more rapidly in the Net Zero Scenario. In the medium to long term, the growth in demand then slows down. In the other scenarios, the path is more gradual.

Continuous production of clean technologies and a reliable supply of critical metals and minerals are prerequisites for a smooth energy transition. If the supply of these metals and minerals cannot keep pace with the growth in demand, this will create bottlenecks in the supply chain. This imbalance will ultimately drive up the price of many metals and minerals, increasing concerns about the affordability of the energy transition. But there could also arise a more positive flip side. If the price of primary transition raw materials rises more sharply, this will encourage further upscaling of recycling capacity and material efficiency.

The figure on the right below shows that the copper shortage will continue to increase in the coming years. Shortages are also expected in graphite from 2033 onwards. Graphite is particularly important for the battery sector. In the copper market, if no new mines and recycling facilities are developed, mining capacity will be ultimately not sufficient to service total consumption. This will then lead to market disruptions and an imbalance in supply and demand. The shortages of refined copper are expected to increase more rapidly in the coming years, increasing the likelihood that the price of copper will remain relatively high. This will ensure that the input costs for producing low-carbon technologies will also remain high and may even increase further. In this scenario, there will be a greater chance that it will ultimately slow down the production of clean technologies, which could lead to delays in the transition.

While the material costs of low-carbon technologies have temporarily plummeted after surging in 2022, recent price increases for many transition metals and expected shortages of crucial metals such as copper and graphite underscore how vulnerable the transition is to disruptions in this global supply chain due to increasing geopolitical risks.

Regardless of the IEA scenario chosen, demand for metals and minerals will continue to grow strongly, creating the risk that scarcity and high prices could potentially slow down the rollout of clean technologies.

At the same time, this presents a paradoxical opportunity: sustained pressure on primary raw materials could accelerate innovation in recycling, material savings, and alternative technologies. The central question is therefore not whether the energy transition will continue, but whether it can be supported in a timely manner by a robust, resilient, and sustainable raw materials system that fulfills its ambitions rather than limiting them.

Team Maverick.