Lithium demand has tripled since 2017, and could grow tenfold by 2050 under the International Energy Agency’s (IEA) Net Zero Emissions by 2050 Scenario. Demand in the lithium market is growing by 250,000–300,000 tons of lithium carbonate equivalent (tLCE) per year, or about half of the total lithium supply in 2021.
Policymakers are compelled to create an enabling environment that encourages the scaling up of lithium production to keep pace with escalating demand, particularly driven by the global push towards electrification and renewable energy storage.
Lithium The lithium supply under the BAU scenario demonstrates steady yet conservative growth, which does not meet the projected IEA demand under any of the three outlined demand scenarios: stated policies, uncunced ledges, and net zero emissions by 2050 (Fig. 7).
Currently, lithium is primarily used in lithium-ion batteries (LIBs), an energy storage technology used in electrified transportation systems and utility-scale energy storage systems for renewable electricity.
Major battery manufacturers are committed to invest over 50 bUSD over the next 5 years to increase LIB production capacity, which is expected to exceed 1.2 TWh capacity by 2030 7. Two key factors drive the increase in demand: first, the cost decline.
According to a literature review by the International Energy Agency , the recycling rates of critical metals used in lithium-ion batteries, such as nickel, copper, cobalt, and lithium, are expected to increase significantly by 2040.