Material efficiency in clean energy transitions Implications of deploying further material efficiency strategies

* Clinker substitution and recycling of steel and aluminium are considered in the modelling as material efficiency strategies. However, while clinker substitution reduces the emissions intensity of cement production and recycling affects availability of scrap for lower-emission secondary production, neither changes demand for final materials and thus are not discussed in this analysis as strategies affecting material demand.

The effect of individual material efficiency strategies for all materials is not additive in all cases – there can be synergies and trade-offs among strategies. For example, extending lifetimes or reducing use of a particular material would make less of that material available for reuse and recycling. By taking an integrated approach that looks at material efficiency across all stages of the life cycle, the analysis can account for the effects of those trade-offs.

It should be noted that the analysis is not a full life-cycle assessment of the examined value chains, nor is it a full assessment of embodied carbon. The focus is on demand and emissions related to steel, cement and aluminium production (as well as plastics in the case of vehicles, along with a brief discussion of battery-electric vehicle battery materials) and changes in usephase emissions attributable to changes in the use of these materials. Production here includes the stages of converting raw materials into finished materials (for metals, the stages from ore agglomeration to finishing for steel and aluminium; and for cement, the stages from raw material grinding to cement grinding). Other materials are not considered, nor are emissions assessed that arise from extracting raw materials, transporting materials and end-use products, and converting materials into buildings or vehicles during construction and product manufacturing. While a comprehensive portfolio of material efficiency strategies is explored, some strategies have not been examined, such as switching buildings frames from concrete and steel to timber and other bio-based materials.

Material demand outlook by scenario

In the RTS, demand by 2060 grows by approximately 30% for steel, 10% for cement and 75% for aluminium relative to 2017 levels (Figure 19). The CTS and MEF see considerable divergence from RTS material demand trends: steel and cement decline by 2060 in both scenarios, while aluminium increases at a slower rate in the CTS, but increases and then begins to decline by 2060 in the MEF. In the CTS, demand for materials is already reduced compared to in the RTS, by 24% for steel (equivalent to about six times the production in the United States in 2017), 15% for cement (two and a half times the production in India in 2017) and 17% for aluminium (1.2 times the primary production in the People’s Republic of China [“China”] in 2017) in 2060. The MEF leads to further demand reductions in 2060 compared to in the CTS, for steel (by 16%) and cement (by 9%), and an increase in aluminium (by 5%).

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Figure 19. Demand for steel, cement and aluminium by scenario

Note: Mt = million tonnes.

While material demand grows over time in the RTS, it is considerably reduced in the CTS and MEF relative to the RTS.

All three scenarios see a substantial divergence from historical trends of global steel and cement demand per capita compared to gross domestic product (GDP) per capita (Figure 20). This suggests a decoupling of demand for these materials from economic growth because of expected future trends and patterns of development. Technological shifts to facilitate clean energy transitions and material efficiency strategies will push the decoupling further than in the RTS.

Figure 20. Global demand for steel and cement per capita by scenario

Sources: Projections are based on International Energy Agency analysis. Historical data are from the following: worldsteel (2018), Steel Statistical Yearbook 2018, www.worldsteel.org/en/dam/jcr:3e275c73-6f11-4e7f-a5d8-23d9bc5c508f/Steel+Statistical+Yearbook+2017.pdf; IMF (2018), World Economic Outlook Database, www.imf.org/external/pubs/ft/weo/2018/01/weodata/index.aspx; USGS (2018b), 2015 Minerals Yearbook: Cement, https://minerals.usgs.gov/minerals/pubs/commodity/cement/myb1-2015-cemen.pdf 2017 values are an extrapolation of 2015 and 2016 data.

Expected future trends in the RTS result in a considerable decoupling of material demand from economic growth. Material efficiency and CTS technological shifts push that decoupling further.

China remains the largest contributor to global production of steel, cement and aluminium across scenarios. It is also the country that sees the largest change in production levels in

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absolute terms in the CTS and MEF (Figure 21). Asia retains around two-thirds of the global production of steel and cement and nearly 60% of aluminium in 2060 in all scenarios. Developing economies generally see lower levels of material demand reduction, as the underlying increasing material demand to sustain infrastructure developments is less affected by substantial efforts on material efficiency; this is particularly true for cement.

Figure 21. Regional production of steel, cement and aluminium by scenario

Asia retains the largest share of global materials production in the long term across the scenarios.

Note: Material and product manufacturing yields are related to metals and thus not applicable for cement.

While the potential of certain material efficiency strategies was analysed for all demand segments, in some cases, the scope of the analysis was limited due to data availability.

The changes in material demand in the CTS and MEF compared to in the RTS should be considered in light of the fact that the full suite of material efficiency strategies and bottom-up demand considerations were not applied to all sources of demand for each material (limited by data availability). For steel, improved manufacturing yields, reuse and recycling were considered for all end uses, while other strategies in the design, fabrication and use stages covered approximately one-half of the end-use demand (from buildings, cars and trucks) (Figure 22). For aluminium, all end uses were also covered for improved manufacturing yields, reuse and recycling, while other strategies covered approximately one-quarter of the end-use

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demand (from cars and trucks). For cement, bottom-up analysis considered only the buildings sector, which accounts for approximately one-half of the end-use demand.

Applying material efficiency strategies to a larger proportion of end-use demand could realise additional material demand savings. This potential may differ considerably across end uses. Thus, savings in one end use should not be extrapolated to other end uses. Furthermore, bottom-up activity level consideration of non-covered end uses in this analysis could also put upward pressure on demand (e.g. Box 3). In summary, while this analysis provides an initial assessment of material demand change potential from material efficiency, additional research is needed to provide a more comprehensive evaluation.

Box 3. Material demand for power generation

Power capacity additions currently account for an estimated 3% of global demand for steel, 0.5% for cement and 5.5% for aluminium. Material demand from the power sector is likely to increase in the future, due to growing electricity demand. For steel and cement, the power sector will account for a growing share of total demand. This is particularly the case in the CTS, in which the power sector grows to 7% of total steel demand and 1% of total cement demand in 2060. The reverse is true for aluminium, given the high expected growth in aluminium for other end uses, including lightweight vehicles. In the CTS, aluminium demand falls to 4.5% of the total demand in 2060.

Demand for steel, cement and aluminium from the power sector by scenario

Notes: % of total material demand considers material inputs to end uses as total demand; it does not include material lost in the semi-manufacturing and product manufacturing stages. Other includes geothermal, tidal, wave and energy storage. Material demand includes material used for manufacturing of power plants and associated infrastructure, the production of fuels and the operation and dismantling of power plants. CCS = carbon capture and storage.

More materials will be required for building electricity generation infrastructure to facilitate clean energy transitions in the CTS than in the RTS.

While total global electricity demand grows at approximately the same rate in the RTS and CTS (a doubling from present to 2060), electricity generated from renewable sources of energy grows by

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40% more in the CTS than in the RTS. The differences in the type of capacity additions result in greater demand for materials in the CTS than in the RTS, by approximately one-third in 2060 for each of steel, cement and aluminium. For steel and cement, wind and solar account for the largest proportion of material demand, given that they account for a large proportion of capacity additions (approximately 20% for wind and 50% for solar of capacity additions in 2060 in the CTS). Biopower also accounts for considerable demand, despite contributing a smaller proportion of capacity addition (6% in 2060 in the CTS). Solar is the largest contributor to aluminium demand, accounting for nearly 75% of power sector demand in 2060 in the CTS.

Power sector CO2 emissions from materials production and power generation

Reduced power generation emissions far outweigh increased material production emissions in the CTS.

Notes: Material intensity estimates were based on the work of Gibon et al. (2017), which was a comprehensive life-cycle assessment of a global low-carbon electricity scenario that included estimates of regionalised material demand per capacity addition of different supply technologies. Estimates were obtained from the authors and are not directly available in the article itself. The RTS uses the baseline scenario material intensities of Gibon et al., while the CTS uses their Blue Map scenario material intensities, which incorporate material efficiency improvement considerations. GtCO2 = gigatonnes of carbon dioxide.

The combined emissions from steel, cement and aluminium in the CTS are one-third lower than in the RTS in 2060, despite increased material demand. This is due to aggressive efforts to reduce the emissions intensity of material production in the CTS. Material production emissions account for a larger proportion of total power sector emissions: in the CTS in 2060, steel, cement and aluminium production account for approximately one-quarter of combined emissions from these materials and power generation emissions (compared to less than 1% in the RTS). Yet, combined emissions in the CTS from power generation and from steel, cement and aluminium production for power capacity additions are less than 2% of those in the RTS in 2060. Thus, the additional inputs of these materials to the power sector are a worthwhile investment to facilitate the lowcarbon transition. While not analysed here, consideration should also be given to demand, material efficiency and emissions for other materials that will play a key role in decarbonising the power sector (e.g. silicon use for solar photovoltaics and lithium and cobalt use for battery

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