One of the key drivers of Nornickel’s
long‑term strategy is the growing demand for the Company’s metals
to support the development of a low‑carbon economy. By supplying
green metals to the market, the Company is already actively contributing
to the global transition to cleaner modes of transport and renewable
energy.
Key climate change factors affecting demand
for the Company’s products
Factors
Ni
Pd/Pt
Cu
Growth of battery
electric vehicle (BEV) market share
Expansion
of the hybrid vehicle market
Growth of the fuel
cell market and the hydrogen economy
Increased power generation
from renewables / low‑carbon fuels
Expansion
of energy‑storage and charging infrastructure to support
growth in EVs
Net effect
IFRS S2 25b
To assess market‑related transition risks and
opportunities, Nornickel modelled changes in demand for key metals under
its three proprietary global economy and climate change scenarios.
Based on the updated 2024 scenarios,
the Company revised its metal consumption forecasts.
Nickel
Nickel is a key material
for the production of stainless steel, which is widely used across
various sectors – from mechanical engineering and construction to renewable energy.
In addition, nickel is a primary metal used in the production
of next‑ and future‑generation batteries, which in turn are crucial
for the development of electrified transport.
Despite strong decarbonisation efforts and
a shift to electric vehicles in the Rapid Transition scenario, higher
nickel demand is expected in the Sustainable Palladium scenario
due to faster GDP growth and greater production of electric vehicles, and
under the Global Growth scenario on the back of a significant
increase in demand for the metal from the stainless steel and alloy
industries.
Primary nickel consumption,mlnt
Nickel forecasts have been revised slightly
upwards: in the Rapid Transition scenario, this is driven
by projected higher consumption in the renewable energy sector, while
in the Sustainable Palladium scenario, it reflects rising global sales
of electric vehicles.
Copper
Copper is a critical metal
for the transition to a low‑carbon future, widely used in high‑tech
equipment, including components for renewable energy systems. More than 70%
of global copper output is used in the production of cable and wire
products. Copper consumption is expected to at least double by 2050.
Similar to the nickel demand outlook,
higher GDP growth and greater electrification of transport are expected
to drive increased long‑term copper consumption under the Sustainable Palladium
scenario compared to the Rapid Transition scenario. The highest demand
for copper is projected under the Global Growth scenario, supported
by the strongest GDP growth and the resulting peak copper needs
in sectors such as transport, air conditioning and refrigeration, construction,
heavy engineering, and consumer goods.
Primary copper consumption, mln
t
The downward revision in copper
consumption forecasts reflects a reassessment of the intensity
of copper use in electric vehicles, solar panels, and wind power,
as well as a lower projected average annual global GDP growth rate.
Palladium
More than 80% of medium‑term palladium demand
is driven by catalytic converters (“catalysts”), primarily used in petrol
engines, including hybrids. The installation of catalysts in vehicles
is mandatory and legally regulated in most countries. The remaining share
of palladium consumption comes from the electronics, dental, jewellery, chemical,
and pharmaceutical industries. Palladium also has potential applications
in technologies for long‑distance hydrogen transportation and purification.
In the Sustainable Palladium scenario,
which the Company has adopted as the most likely, demand for palladium
remains stable through to 2050, supported by the continued high share
of ICE vehicles and moderate electrification of transport.
The lowest demand for palladium
is expected under the Rapid Transition (green) scenario, which assumes
a decline in the total number of vehicles and a gradual phase‑out
of ICE cars in key global economies.
The highest demand is expected
in the Global Growth scenario, driven by robust GDP growth and strong demand
for palladium, primarily in the transport sector due to increased
hybrid vehicle production, as well as in the jewellery industry.
Primary palladium consumption,Moz
In the updated Sustainable Palladium
scenario, the forecast for ICE vehicle sales has been revised downward, which
negatively impacted the palladium demand outlook. Conversely,
in the Rapid Transition scenario, the outlook for palladium has
improved due to an expected uptick in ICE vehicle sales.
In the Global Growth scenario, however, a decline in palladium
consumption in other sectors by 2050 is attributed to a lower
average annual global GDP growth rate.
Platinum
40% of platinum consumption comes from
the automotive industry, where it is used in catalytic converters
for vehicles with internal combustion engines, including hybrids. A further 25%
of platinum demand comes from the jewellery industry. Platinum is also used
in the glass and electronics industries. In addition, platinum
is a critical component of catalysts used in electrolysers
for green hydrogen production and in fuel cells deployed in both transport
and stationary hydrogen energy systems.
Platinum demand is expected to increase
across all scenarios. In the Global Growth and Sustainable Palladium scenarios,
demand is primarily driven by the continued high share of ICE vehicle
production.
The Rapid Transition scenario is projected
to show the highest demand by 2050. Despite a decline in ICE
vehicle sales, this scenario sees stronger growth in hydrogen energy and the fuel
cell market, leading to greater platinum demand compared to the other two
scenarios.
Primary platinum consumption,Moz
The downward revision of platinum
consumption forecasts across all updated scenarios is attributed
to a lower average annual global GDP growth outlook,
as well as increased substitution of platinum with palladium
in automotive catalysts. In the Rapid Transition scenario,
the decline is further driven by lower sales projections
for hydrogen‑powered vehicles. In the Sustainable Palladium scenario,
it stems from reduced forecasts for ICE vehicle sales, while in Global
Growth, it reflects a downward revision in overall vehicle sales.
