Natural resources: Between growing demand, decarbonisation and dwindling supply

Natural resources - be it energy, mining, agriculture or forestry - are the backbone of our modern economies. From the metals essential to electrification, such as copper, nickel and lithium, to hydrocarbons, which still account for more than 80% of the world's energy generation¹, these raw materials are at the heart of the dynamics of growth and food security.
Yet this dependence raises major questions at a time when humanity is facing a triple challenge:

• meeting the needs of a rapidly expanding world population ;
• making a success of the energy transition, which is vital if we are to combat climate change ;
• and managing the gradual depletion of reserves that are by definition non-renewable.

Faced with two major drivers of demand (demographics and the energy transition) and an increasingly constrained supply of natural resources, commodities markets are set to play a strategic role in the coming decades.

Traditional demand fueled by population growth, urbanization and economic development

The pressure on natural resources is the result of a combination of factors: global population growth, urbanization and rising living standards. With an estimated population of 9.7 billion by 2050² and a peak of 10.3 billion expected in the mid-2080s, according to United Nations projections, the need for energy, agricultural and mining resources will intensify considerably.

Figures illustrate this trend: between 1970 and 2019, demand for metals quadrupled, while demand for energy and agricultural raw materials tripled, according to the World Bank³. On the food front, agriculture will have to produce almost 50% more food than in 2012 to feed a population approaching 10 billion, according to the FAO⁴. This increase will require the optimization of farming techniques, greater use of fertilizers such as phosphate and potash, and inevitable pressure on ecosystems and arable land.

Urbanization and industrialization are a second driver of this growing demand. Global electricity consumption is set to grow by 2.8% per year, according to the Energy Information Administration (EIA)⁵, while the development of urban infrastructures, particularly in regions such as India, Africa and South-East Asia, will require massive quantities of materials: steel, cement, copper.

Rising living standards, particularly in emerging economies, are amplifying this trend. In China and India, rapid urbanization has led to a surge in the consumption of concrete, a material responsible for around 7% of global CO2 emissions linked to industrial production⁶. Global demand for steel is set to grow by 30%⁷ and for aluminum by 50% by 2050⁸.

Decarbonization: an energy and material paradox

Vicious circle or unstoppable necessity, the energy transition reveals a fundamental paradox: to decarbonize our economies, we need to mobilize mineral resources on an unprecedented scale. Far from being immaterial, “green” technologies rely on major extraction of raw materials, raising geopolitical, environmental and ethical challenges.

Mineral requirements for low-carbon technologies are set to explode. The manufacture of electric vehicles requires six times as many minerals as a conventional combustion-powered car, with particular pressure on four strategic metals:

• lithium: worldwide demand for the automotive sector to increase 42-fold by 2040⁹ ;
• nickel : x19 ;
• cobalt : x21 ;
• graphite : between x8 and x25 depending on the scenario¹⁰.

Renewable energy infrastructures amplify this mineral pressure. An onshore wind turbine - which has a lifespan of between 20 and 25 years - requires a host of resources, such as steel for the mast, fiberglass, carbon, or composite materials for the blades, as well as an imposing concrete slab poured into the ground to ensure its stability. Solar panels depend on silicon, copper and rare lands.

The decarbonization of developed economies masks a geographical transfer of environmental impacts. And, while Western countries are enacting ever stricter ESG (Environmental, Social and Governance) regulations, emerging countries are becoming the new preferred extraction sites, de facto increasing the ecological impact. Intensive resource extraction is now concentrated in less regulated regions of Africa and South America. The “Lithium Triangle” shared by Argentina, Chile and Bolivia illustrates these tensions. Lithium mining in the Salar of Atacama region has led to a drop in the water table and disruption of local ecosystems and biodiversity.

The 2022 IPCC report highlights the need to rethink our approach¹¹. Technological substitution alone will not suffice. We need to develop a circular economy, invest massively in metal recycling and design less resource- intensive technologies.

Supply under pressure: scarcity and geopolitical issues

The world's reserves of natural resources are far from infinite. They come up against physical and geological realities, as well as political, economic and environmental ones. Stocks of fossil fuels such as coal - found mainly in the USA, but also in Russia, Australia, China and Indiae¹² – are estimated to last 133 years at current consumption rates. For oil and natural gas, the outlook is tighter, with reserves estimated at 47 and 52 years respectively¹³. However, according to the EIA, by 2050, fossil fuels could still account for 69% of the world's primary energy consumption, maintaining their central role in the energy mix.

This scarcity is accompanied by a major geopolitical reshuffle. Resource mapping has become as strategic a power issue as oil control was in the 20th century. China is the most striking example, now controlling between 80 and 95% of rare-earth refining¹⁴, compared with less than 10% two decades ago. This monopoly gives Beijing considerable geo-economic leverage, particularly in the so-called renewable energies, electronics and new technologies sectors, where recent developments in artificial intelligence have accentuated needs.

Western countries find themselves in a situation of critical dependence. The United States and Europe import most of their strategic metals. This vulnerability exposes their economies to high geopolitical risks. Recent tensions around global supply chains, exacerbated by the pandemic and geopolitical conflicts, have brutally revealed this fragility. The member states of the European Union, and Germany in particular, have learned the hard way about the risk of heavy energy dependence on Russia. Before the war in Ukraine, more than half of Germany's natural gas and coal supplies came from its now belligerent Russian partner.

Some countries with significant resources have finally decided not to exploit them for ecological reasons. France, with its potential shale gas deposits, particularly in the Paris basin, is a case in point. However, these regulatory and environmental barriers could give way under the pressure of growing economic needs and political reconfigurations.

Recycling: a strategic lever at the crossroads of economic and technological challenges

Recycling is often presented as an unavoidable solution to the scarcity of natural resources, but it remains largely conditioned by economic and technological imperatives. Gold is a prime example of the potential of recycling. Since ancient times, almost 95% of mined gold has continued to circulate, demonstrating its almost infinite reusability.
The high value of this precious metal makes it profitable to recover even the smallest quantities found in electronic components or jewelry.

For many other metals, the equation is more complex. Recycling only becomes economically viable when the cost of recovery is lower than the material's market value. Copper, for example, sees its recycling fluctuate with world prices, creating a dynamic of opportunity rather than a systemic strategy. Some resources, such as natural gas and oil, remain irretrievably non-recyclable once burnt. However, innovation is opening up new prospects, notably in the field of plastics, where emerging processes are making it possible to transform waste into fuel¹⁵.

The gradual scarcity of natural resources acts as a powerful economic accelerator. As prices rise, investment in recovery technologies mechanically becomes more attractive. This mechanism creates a virtuous circle in which scarcity stimulates innovation, helping to regulate raw materials markets. The most advanced countries and companies now understand recycling not as an environmental constraint, but as a strategic lever for economic and technological sovereignty. The stakes go beyond simple waste management: we need to completely rethink our production and consumption models. Although promising, these solutions are still insufficient to meet the scale of the challenge.

The management of natural resources is now at a historic turning point, and our economic model is being called upon to reinvent itself. The coming transition will be neither linear nor straightforward. It will require an unprecedented combination of technological innovation, massive investment, sobriety strategies and international cooperation.

1 - https://www.statista.com/statistics/1302762/fossil-fuel-share-in-energy-consumption-worldwide/ 
2 - https://www.ined.fr/en/everything_about_population/demographic-facts-sheets/focus-on/2024-les-nations-unies-publient-de-nouvelles-projections-de-population-mondiale/ 
3 - https://thedocs.worldbank.org/en/doc/b4ff84b2d5dc4d0963
​​​​​​​a5074102460cc1-0350012022/related/Commodity-Markets-Chapter-2.pdf 
4 - https://theothereconomy.com/fr/fiches/comment-nourrir-10-milliards-de-personnes-en-2050/ 
5 - https://www.connaissancedesenergies.org/les-previsions-de-leia-americaine-dici-2050-en-infographies-241104 
6 - https://gccassociation.org/news/global-cement-and-concrete-industry-announces-roadmap-to-achieve-groundbreaking-net-zero-co2-emissions-by-2050/ 
7 - https://www.iea.org/reports/iron-and-steel-technology-roadmap 
8 - https://european-aluminium.eu/blog/vision2050/ 
9 - https://www.lesechos.fr/industrie-services/industrie-lourde/lithium-nickel-cobalt-la-grande-peur-dune-penurie-de-metaux-1851474 
10 - https://www.ifri.org/sites/default/files/migrated_files/documents/
atoms/files/ifri_danino_perraud_graphite_juin_2024.pdf 
11 - https://www.ipcc.ch/report/ar6/wg2/ 
12 - https://fr.statista.com/statistiques/559807/charbon-reserves-averees-des-10-principaux-pays-dans-le-monde/#:~:text=En%202020%2C%20les%20r%C3%A9serves%20de,%2D
bitumineux%2C%20et%20le%20lignite. 
13 - https://www.worldometers.info/energy/ 
14 - https://www.ifri.org/fr/notes/la-chine-et-les-terres-rares-son-role-critique-dans-la-nouvelle-economie 
15 - https://www.techniques-ingenieur.fr/actualite/articles/un-nouveau-procede-de-production-de-carburants-a-partir-de-dechets-plastiques-92522/