Copper and the Materials Behind Global Electrification
February 13, 2026
Read Time 6 MIN
Key Takeaways:
- Electrification is driving structurally higher copper demand across grids, EVs and clean energy.
- AI and data center growth are reinforcing metals intensity in global infrastructure.
- Supply constraints may amplify copper’s long-term importance as electrification accelerates.
Metals Powering Electrification: Copper and the Critical Materials Behind a More Electric World
The global economy is becoming more electrified, more automated and more data-driven. While these shifts are often discussed in digital terms i.e. artificial intelligence (AI), cloud computing and clean technologies, their foundation is physical. Electrification, AI and data centers all depend on metals that enable power transmission, connectivity and reliability at scale.
As a result, the future of infrastructure is increasingly a materials story. At the center of that story is copper, supported by a broader group of critical metals essential to electrification.
Electrification Is Driving Structural Metals Demand
Electrification extends far beyond electric vehicles (EVs). It includes power generation, grid modernization, energy storage, industrial automation and charging infrastructure. Compared with fossil-fuel-based systems, electrified technologies tend to be more materials-intensive, particularly when it comes to conductive and energy-related metals.
Copper plays a foundational role due to its electrical conductivity, durability and efficiency. It is widely used across electrified systems, including:
- Power transmission and distribution networks
- Electric motors, transformers and wiring
- Renewable energy installations
- Electric vehicle charging infrastructure
As electrification expands, copper demand grows not only because more infrastructure is being built, but because electrified systems require significantly more copper per unit of energy delivered than conventional alternatives.
Grid Expansion and the Rising Role of Copper
Modern power grids are becoming larger, more interconnected and more complex. Integrating renewable energy, supporting distributed power sources and meeting rising electricity demand all require extensive upgrades to transmission and distribution networks.
Each of these upgrades increases copper consumption through new transmission lines, substations, transformers and grid-scale energy storage. As global electrification accelerates, grid expansion is expected to remain one of the most significant long-term drivers of copper demand.
AI, Data Centers and Physical Infrastructure
The rapid adoption of AI has accelerated global investment in data centers, facilities that require reliable power delivery, advanced cooling systems and dense electrical interconnections, directly increasing metals demand.
Copper remains essential for power distribution, cabling and cooling systems within data centers. Aluminum is widely used for structural components and heat management due to its lightweight properties. Meanwhile, specialty and minor metals, such as gallium and germanium, play critical roles in semiconductors, optical components and advanced chips that support AI workloads.
As data centers scale in size and computing intensity, metal usage per facility has increased, reinforcing the link between digital growth and physical infrastructure.
Electric Vehicles, Clean Energy and Critical Metals
Electric vehicles are materially different from internal combustion engine vehicles. EVs typically require several times more copper due to electric motors, inverters, wiring harnesses and charging systems. Clean energy sources like wind and solar also require a range of critical metals.
- Lithium, nickel and cobalt, which influence battery energy density and longevity
- Manganese, used in certain battery chemistries and wind turbines
- Rare earth elements, essential for high-performance permanent magnets
Together, these materials form the core inputs for electrified transportation and clean energy systems.
What Drives Copper Prices
Copper prices are influenced by a combination of structural and cyclical factors. Long-term demand growth tied to electrification, renewable energy and digital infrastructure is a key structural driver. On the supply side, mine production, declining ore grades and development timelines play an important role.
Macroeconomic factors, including global growth trends and inflation, can also influence copper prices. Because copper is embedded across construction, manufacturing, energy and technology, it is often viewed as both an indicator of economic activity and a beneficiary of long-term electrification trends.
Studies have shown that copper demand is expected to grow from 28 million metric tons per year in 2025 to 42 million metric tons by 2040, an increase of 50% above current levels.
Chart 1: Global copper demand by sector (2025 – 2040)
Million metric tons copper (MMt Cu)
1.Includes copper demand from construction, cooling, appliances, fossil power generation, machinery and internal combustion engine (ICE) vehicles.2.Includes copper demand from clean energy technologies, transmission and distribution (T&D) and EVs.
Source: S&P Global © 2026 S&P Global. Not intended as a forecast or prediction of future results. For illustrative purposes only.
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EMET | VanEck Copper and Green Metals ETF
Supply Constraints and the Importance of New Investment
Copper is not scarce in absolute terms, but expanding supply has become increasingly challenging. New mine development is capital-intensive and can take many years from discovery to production. At the same time, declining ore grades mean more material must be processed to produce the same amount of copper.
Similar supply challenges exist across other electrification metals, many of which have geographically concentrated supply chains. These dynamics can limit how quickly supply responds to rising demand, increasing the importance of sustained investment and innovation across the mining and processing ecosystem.
Chart 2: Copper’s Looming Supply Gap
Source: Wood Mackenzie, Goldmans Sachs. Data as of December 2025.
Copper exposure is significantly important to the VanEck Copper and Green Metals ETF (EMET).
Chart 3: Highlights the weights of the metal exposures based on revenue generation in the fund
Source: VanEck Research. Data as of December 2025. *PGMs: Platinum Group Metals (platinum, palladium, rhodium, ruthenium, iridium, and osmium). Fund holdings and exposure weights may vary. Visit vaneck.com/emet for most recent holdings data.
Positioning for a More Electrified Economy
Electrification, AI and data center expansion are often viewed as separate themes, yet they share a common reliance on metals that enable power, connectivity and performance. Copper plays an important role in this transformation, supported by battery metals, rare earth elements and specialty materials.
The VanEck Copper and Green Metals ETF (EMET) highlights copper and critical electrification metals as essential inputs for modern infrastructure and long-term structural growth.
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Important Disclosure
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.
An investment in the Fund may be subject to risks which include, but are not limited to, risks related to investments in green metals, clean energy companies, regulatory action and changes in governments, rare earth and strategic metals companies, special risk considerations of investing in Asian, Australian, Chinese, African, South African, Canadian and Latin American issuers, Stock Connect, foreign securities, emerging market issuers, foreign currency, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount, liquidity of fund shares, non-diversified and index-related concentration risks, all of which may adversely affect the Fund. Emerging market issuers and foreign securities may be subject to securities markets, political and economic, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement, and corporate and securities laws risks. Small- and medium-capitalization companies may be subject to elevated risks. Investments in Chinese issuers may entail additional risks that include, among others, lack of liquidity and price volatility, currency devaluations and exchange rate fluctuations, intervention by the Chinese government, nationalization or expropriation, limitations on the use of brokers, and trade limitations.
Investments in companies involved in the production, refining, processing and recycling of green metals used to facilitate the energy transition from fossil fuels to cleaner energy sources and technologies are subject to a variety of risks. Under certain market conditions, the Fund may underperform as compared to funds that invest in a broader range of investments. There may be significant differences in interpretations of what is considered a "green" metal and the definition used by the Index Provider may differ with those used by other investors, investment advisers or index providers. Additionally, there may also be a limited supply of companies involved in green metals, which may adversely affect the Fund.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
© 2026 Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.
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Important Disclosure
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.
An investment in the Fund may be subject to risks which include, but are not limited to, risks related to investments in green metals, clean energy companies, regulatory action and changes in governments, rare earth and strategic metals companies, special risk considerations of investing in Asian, Australian, Chinese, African, South African, Canadian and Latin American issuers, Stock Connect, foreign securities, emerging market issuers, foreign currency, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount, liquidity of fund shares, non-diversified and index-related concentration risks, all of which may adversely affect the Fund. Emerging market issuers and foreign securities may be subject to securities markets, political and economic, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement, and corporate and securities laws risks. Small- and medium-capitalization companies may be subject to elevated risks. Investments in Chinese issuers may entail additional risks that include, among others, lack of liquidity and price volatility, currency devaluations and exchange rate fluctuations, intervention by the Chinese government, nationalization or expropriation, limitations on the use of brokers, and trade limitations.
Investments in companies involved in the production, refining, processing and recycling of green metals used to facilitate the energy transition from fossil fuels to cleaner energy sources and technologies are subject to a variety of risks. Under certain market conditions, the Fund may underperform as compared to funds that invest in a broader range of investments. There may be significant differences in interpretations of what is considered a "green" metal and the definition used by the Index Provider may differ with those used by other investors, investment advisers or index providers. Additionally, there may also be a limited supply of companies involved in green metals, which may adversely affect the Fund.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
© 2026 Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.