Foreign media reported on December 19 that CRU, a global mining and metals industry consulting company, released the top ten sustainability of the commodity market in 2024, covering topics that have been very hot this year. These include reporting standards, nature conservation, climate action, carbon pricing, and key raw materials.
Here's a summary of what CRU analysts have to say for 2024:
1.Reporting: As reporting pressure increases, companies need to prepare for a range of new and expanded reporting requirements in scope and volume.
The CRU warns that there is an increasing overlap in standards, which means transition planning is essential to address policy uncertainty and liability risks.
The stakes are increasing for organizations or chains that operate across multiple jurisdictions. For policymakers, the greater the divergence in standards, the more likely they are to drive up costs and report fatigue, analysts say.
2.Biodiversity commitments are supported: businesses will increasingly need to start monitoring and preparing legislation on nature and biodiversity.
The Task Force on Nature-related Financial Disclosures (TNFD), a market-led, science-based and **-backed initiative, published its final recommendations in September. The purpose of this non-legally binding framework is to provide organizations with a structure to integrate science-based nature targets into decision-making.
3.Polarizing views on the need and pace of climate action: As the impacts of climate change intensify, businesses will face increased scrutiny and risk, CRU said. However, the speed of the required action is not set. Even when trends are clear, political resolve will ebb and flow.
In some countries, such as the United States, the outcome of the scheduled elections will have a significant impact on environmental policy, analysts say. They noted that regardless of the outcome, some parts of the Inflation Reduction Act (IRA) will be more difficult to lift than others.
4.Incentivizing emissions reductions: All commodity markets will change as a result of carbon***. As carbon pricing plays an increasingly important role in driving global emissions reductions, understanding carbon pricing is and will be critical.
5.The competition for critical raw materials will intensify: the basket of critical minerals is dynamic in different regions and at different times. For example, the U.S. Department of Energy (DOE) has rated copper as "not critical" in the short term and "close to critical" in the medium term due to demand growth in the electrification and renewable energy sectors faster than **.
6.Greater focus on Scope 3 emissions: In 2024, indirect emissions through the value chain, or Scope 3 emissions, will be a growing concern for regulators, investors and consumers. CRU said businesses need to measure, report and reduce their Scope 3 emissions in order to maintain their social credentials to operate and access capital markets.
7.Chains are changing: Chains are in the midst of a period of major change, and regionalization is increasingly becoming a trend. The European and North American markets are good examples. CRU said there could be a shift to greater self-sufficiency and diversification as the chain's sustainability and resilience come under greater scrutiny. This may create new opportunities for local traders and manufacturers, but it can also lead to higher costs and reduced efficiency.
8.EV sales continue to grow: EV sales growth was slower than expected in 2023, but showed resilience amid macroeconomic headwinds in all markets. Globally, more than 12% of light vehicle sales in 2023 are battery electric vehicles (BEVs). CRU expects that percentage to jump to more than 16% next year. By 2025, one out of every five new cars will be BEVs, and by 2030, the penetration rate of BEVs will be close to 50%.
9.Renewable energy capacity grows, energy storage receives more attention: Renewable energy capacity has increased significantly this year, with solar and wind installed capacity exceeding 500 GW, and China's solar deployment has increased significantly. CRU**, which is set to see double-digit growth in 2024. However, in some regions, such as Europe, planning laws, labor shortages, and rising financing costs have hampered deployment.
10.Continued excitement around new technologies: Interest in low-carbon technologies will continue to grow, with green hydrogen and ammonia, carbon capture and storage, and small modular reactors likely to receive most of the market's attention in 2024.
CRU believes that despite technological advances and cost reductions, there is no silver bullet for decarbonization. These technologies almost always require significant policy support or high carbon** to be cost-competitive with traditional fossil alternatives.
The European Union, Japan, and Australia are just three of the regions where policymakers are promoting green hydrogen production by providing financial incentives. Many solutions still need to be proven at the commercial level.