02
Critical resources

02 Critical resources

Introduction

How does the criticality of resources put low-carbon technologies at risk?

All resources used in the energy sector are critical - including the most commonly used ones. While rare materials often dominate the conversation, they can overshadow more abundant yet equally essential resources that underpin every energy technology, regardless of the chosen pathway.

Key questions to explore in this article:

What defines a resource's criticality, and what risks does it entail?
How do resource constraints impact low-carbon and carbon-intensive technologies?
Why are some critical resources still overlooked, and what are the consequences?
What levers can mitigate resource scarcity risks - and under what conditions?
How can countries or companies leverage supply chain advantages for critical resources?

Alexandra Bonanni-Gould

Head of Energy Strategy Lab
Capgemini Invent

With over 20 years of experience in the energy sector , Alexandra advises national and international energy and utilities companies on strategic foresight, technology choices, investment policies, innovation scaling, emerging value models and digital transformation.

02 Critical resources

What is criticality of resources?

Some resources, such as lithium and rare earth elements, are essential for critical components like permanent magnets. Although typically required in relatively small volumes, they are non-substitutable. Conversely, materials like sand and aggregates are abundant but demanded in very large quantities, presenting different types of sustainability challenges.
Energy-intensive mining and processing activities lead to environmental damage, including CO₂ emissions (e.g., from steel and copper), impacts on biodiversity, high water consumption, depletion and pollution, land use change, and water and waste-related contamination (e.g., lithium, cobalt, rare earths, and silicon).

Criticality must be assessed across five interconnected dimensions:

Dimensions	Key factors	Implications
Resource Availability	Global geological reserves Geopolitical concentration of supply Dependency & disruption risks	Dependency Adequacy of supply Strategic sourcing Risk mitigation
Economics	Short-term price volatility Long-term price elasticity to demand	Market stability Investment planning/signals to investment
Environmental Impact	Beyond carbon emissions Biodiversity loss Water usage Waste Land degradation (...)	Environmental compliance Stricter compliance requirements
Human Rights	Labor conditions Community displacement Equitable access	Medium-term policy changes Ethical
Technology	Circularity Substitutability	Technological choices Maturity of the recycling value chain/cost of circularity Incorporation of recycled content into end products Risks associated with substitutability

Source: ?

02 Critical resources

Rare earths are not geologically rare, while some seemingly abundant resources face growing supply risks

Reserves of copper, cobalt, and bitumen (linked to oil reserves) are expected to decline by 2040, with projected reserve lifespans from that year estimated at 100 years for copper, 60 years for cobalt, and 120 years for bitumen.
For rare earth elements and lithium, the main challenge is not the volume of reserves but rather the economic and environmental feasibility of extracting them at viable concentrations. This highlights the need to develop new mining capacities and processing technologies, rather than relying solely on current reserve estimates.
Contrary to popular belief, sand and aggregates that are incorporated in concrete, are not easily accessible. In fact, the sand used for roads and civil engineering projects must meet very specific criteria such as grain sizes, cleanliness, and composition to ensure structural integrity and durability.
Huge volume requirements are already causing regional shortages due to overexploitation, environmental degradation (for the record, sand & aggregates extraction and production require 0.059 m³/kg of water), and subsequent regulatory constraints and restrictive policies.

Resources	Projected Years of Reserves by 2040	Demand Growth Rate by 2040 (%)
Aggregates	Not reliable	143%
River sand	Not reliable	55%
Nickel	20-25	135%
Iron Ore & Steel	60-70	20%
Copper	30-35	30%
Bitumen	40-50	75%
Rare Earths	20-25	195%
Lithium	15-20	410%

Source: Capgemini Invent 2025 analysis, IEA – Global Critical Minerals Outlook 2025; Global Energy Association – Lithium and Cobalt Outlook (2025), Mining Weekly – Copper, Nickel, Rare Earths, Lithium (2025)

02 Critical resources

All resources are critical to their own extent and this has nothing to do with planetary boundaries

	Degree of criticality
Resources	Resources availability	Economics	Environmental impacts	Human rights	Technology (recyclability/substitutability
Aggregates	++	+	++	+	+
River sand	+++	+	+++	+	++
Nickel	+++	+++	+	++	++
Steel	+	+++	+	+	+
Copper	++	+++	+	++	+
Bitumen	+	++	++	++	++
Rare Earths	+++	++	++	+++	+++
Lithium	+++	++	++	+++	+++

Source: Capgemini Invent 2025 analysis

02 Critical resources

China’s strategic preemption over key resources significantly constraints global availability

Initial assessments of global supply chains reveal a significant concentration of production among a limited number of countries, with China occupying a dominant position - particularly in refining capacities.
Crucially, the volumes available to the global market are what remain after China meets its own domestic demand and fulfills long-term contractual obligations. This further constrains supply for other countries and amplifies market tightness.
Additionally, commodity markets (resources market) display limited liquidity. For instance, only about 40% of global copper production is traded on open markets, which restricts hedging options and reduces the market’s ability to respond flexibly to demand fluctuations.
Paradoxically, it is market prices - shaped by these very constraints - that determine production margins and signal future investment decisions.

China's Share of Global Refining Production (%)
Copper	40%
Steel	~54%
Nickel	65-70% (control and investment in Indonesia's refining capacity)
Aluminum	~60%
Rare Earths	90%
Lithium	60%
Cobalt	73%
Silicon	Over 70% (including ~67% of global polysilicon)

Source: IEA, Critical Mineral Outlook, 2024; USGS, 2025

02 Critical resources

Volatile market prices in the short term are sending mixed signals, discouraging long-term investment

Global resource prices remain volatile due to shifting supply-demand dynamics, rapid electrification, and competition of usages - especially affecting critical materials like lithium, rare earths, copper, nickel, and steel.
This volatility is largely driven by external factors - port congestion and logistics delays, freight costs, geopolitical tensions, energy prices, regulatory barriers, and complex tax and tariff systems - rather than structural production issues.
In response, market players are turning to speculative storage, hedging, and active trading in futures and options.
However, current price levels do not support investment in new production capacity, which caps output and raises the risk of future shortages in both components and finished goods -ultimately threatening long-term supply security.

FIGURE 1
Copper and Nickel Prices (USD per ton) from 2008 to 2024

Source: IEA, Critical Mineral Outlook, 2024; USGS, 2025

02 Critical resources

As a result, supply is consistently misaligned with demand

There is a persistent misalignment between production capacity and a growing market demand.
Even in sectors characterized by overcapacity - such as the European steel industry - shortages can still occur. This paradox is often the result of "stop-and-go" production strategies deliberately employed to influence market prices by restricting supply.
This dynamic helps explain why steel shortages can arise despite an overall surplus in production capacity.

Estimates - annual growth rates (2025–2050) for estimated demand and production – depending on scenarios

Resources	Demand CAGR (%)	Production CAGR (%)
Steel	1.3	1.2
Copper	2	1.35
Nickel	4.5	3
Aluminum	1.6	1.5

Source: Capgemini analysis, IEA, Critical Mineral Outlook, 2024, RMG Consulting – Future Mine & Mineral 2024 Conference , 2024; International Energy Agency (IEA) – Global Critical Minerals Outlook 2024, Strategic Insights from World Steel Dynamics

02 Critical resources

Nickel is the most critical resource and is still under the radar

Steel - particularly high-strength steel (incorporating crude steel and nickel) - is currently facing significant supply constraints and heightened price volatility. While metals markets were previously influenced mainly by geopolitical disruptions such as the COVID-19 pandemic and the war in Ukraine, today's volatility is driven by a broader set of factors. These include persistent geopolitical tensions and increasing competition among various end-uses, including strategic stockpiling.
Nickel, a critical element in both stainless steel and high-strength steel alloys, has become especially pivotal. Its importance is further amplified by its essential role in battery production, making it a key material in the energy transition and electric vehicle sectors.
Importantly, the risks associated with metals are not solely tied to the volume required.
Instead, they stem from their strategic role as components in equipment - regardless of where they sit in the value chain.

Energy Technology	Steel Requirement (tons/GW)	Usage of High-Strength Nickel Steel
Nuclear Power	40,000–50,000	Used extensively in reactor pressure vessels, piping, fasteners, and structural components due to high safety and temperature requirements
Offshore Wind	120,000–180,000	Used in foundations, towers, and support structures exposed to harsh marine environments
Onshore Wind	100,000–120,000	Used in towers and nacelles; less nickel steel than offshore but still significant
Solar PV	35,000–45,000	Mostly structural steel for mounting systems

Source CleanTechnica – for steel requirements in solar and wind energy., Stainless Steel World –for nickel-containing steel usage in wind turbines.
World Nuclear Association and general nuclear engineering literature – for steel usage in nuclear power plants. Rystad Energy & WindEurope (2023).

02 Critical resources

Concrete (sand and aggregate) could be the next critical resource

Concrete demand is increasingly driven by energy transition-related civil engineering needs, rather than traditional sectors like construction and road infrastructure. Specialized concretes - using aggregates such as barite, magnetite, serpentine, and hematite - are vital for niche applications like radiation shielding and thermal management, adding complexity to supply chains.
Europe’s current production capacity of 1.05 to 1.75 billion metric tons annually may suffice for conventional use but could fall short amid accelerated energy infrastructure deployment.
The industry, characterized by capital-intensive operations and long investment cycles, faces a growing mismatch between existing capacity and emerging energy-related demand.

Technology	Concrete Demand (tons per GW)	Comments
Nuclear	~900,000 to 1.2 million tonnes per GW	Includes reactor buildings, cooling towers, and safety structures.
Offshore Wind	500,000 to 800,000	Driven by heavy foundations (monopiles, jackets, or gravity bases).
Onshore Wind	240,000 to 400,000	Mostly for turbine foundations and access roads (depending on turbine size, foundation design, and site-specific conditions)
Stationary Battery	1000 to 10,0000	Mostly for housing and site preparation.

Source: ADEME, Inventaire des besoins de la transition énergétique, 2020
CleanTechnica – for steel requirements in solar and wind energy., Stainless Steel World – for nickel-containing steel usage in wind turbines. World Nuclear Association and general nuclear engineering literature – for steel usage in nuclear power plants. Rystad Energy & WindEurope (2023): IEA Wind Task 37 – Reference Wind Turbines; NREL – Materials Quantification for Wind Energy Growth

02 Critical resources

Levers as industrial strategies enabled by digitalization

Procurement & hedging to mitigate shortage risks from competing demands

Diversify supply sources and prioritize sustainable sourcing.
Strategically stockpile critical materials (without incurring additional costs).
Implement procurement and hedging strategies to secure essential supplies.
Continuously monitor key component storage levels in line with market trends and forecasts.
Negotiate fixed-price contracts for essential components (e.g., through bookings or options).
Prioritize high-risk materials and components.

Circularity to enhance sustainability and resource efficiency

Leverage urban mining by reusing spare parts and production scraps and systematically applying circular economy principles while ensuring economic viability.
Incorporate recycled materials into production processes to reduce dependency on virgin resources.
Develop dismantling processes to recover valuable materials, integrating transformation costs into the overall economic model.
Build a global recycling value chain, including the management of offtakers to ensure consistent material flow and value recovery.

R&D & process

Favor components with lower resource intensity or those incorporating recycled materials.
Promote safe substitution strategies, considering potential negative externalities.
Integrate eco-design practices throughout product lifecycle.
Extend equipment lifespan through advanced maintenance strategies.

Digital tools to support mitigation levers

Enable intelligent supply chain capabilities incorporating resource constraints into planning algorithms.
Utilize modeling tools for scenario planning.
Use e-procurement systems aligned with market scenarios
Deploy data platforms to enable circularity strategies
Implement Life Cycle Asset Management systems to optimize resource use.

02 Critical resources

Our convictions

1

All resources are critical, yet some are being overlooked - leading to unexpected shortages and price spikes.

2

Resource criticality is increasingly driven by short-term market dynamics - such as price volatility and strategic behavior by key players (e.g., organized shortages aimed at driving up prices) - rather than by planetary boundaries or absolute scarcity. The persistent mismatch between supply and growing demand is further intensified by geopolitical tensions and the evolving economic outlook in Asia, with China remaining central and India playing an increasingly significant role. This creates a 'pendulum effect' that disrupts predictability and complicates long-term planning.

3

Even industries with relatively low resource consumption are exposed to risks due to the strategic importance of certain materials. This calls for a systemic approach to resource security across sectors.

4

Tariff pressure remains a key concern and must be factored into resource strategies. Identifying and mastering bottlenecks in global supply chains - especially in proprietary access to resources and control over equipment value chains - can unlock competitive advantage.

5

While mitigation strategies exist, they often come with added costs and uncertainties. These must be carefully assessed to ensure resilience without compromising economic viability.

6

Resources must be managed through a global, value-chain-oriented lens that integrates circularity. This includes urban mining, recycling, and dismantling strategies that recover value while reducing dependency on virgin materials.

7

Digital tools - such as modeling platforms, life cycle asset management systems, and e-procurement - are essential to enable a systemic resource strategy and support informed decision-making.

8

Anticipating and modeling resource risks is crucial to guide today’s technological and industrial choices - decisions that will shape competitiveness and sustainability over the next 50 years.