Silver is at the heart of the clean energy transition, essential for solar cells and electric vehicles (EVs) due to its unmatched conductivity. As demand from the photovoltaic industry surges, outpacing supply, silver’s pivotal role highlights both the opportunities and challenges in achieving a sustainable future.
Silver experts highlighted significant challenges in meeting global demand despite robust price signals favoring increased metal production amid the expanding energy transition. This metal plays a critical role in EVs and solar cells, with demand surpassing supply in recent years, leading to depleted inventories.
According to the Silver Institute, photovoltaics alone are projected to account for 19% of global silver demand in 2024, equivalent to 232 million ounces. This represents almost a 20% increase from 2023 and a substantial 96% surge from 2022 levels.
Anticipating a deficit of 215.3 million ounces in 2024, the Silver Institute forecasts that industrial applications will drive 58.3% of the world’s total demand of 1.2 billion ounces. However, global silver supply primarily results from byproduct production associated with other metals. Moreover, despite high prices, there’s limited incentive for new production.
Shining Spotlight on Silver
Adrian Day from Adrian Day Asset Management emphasized the severity of the silver deficit, attributing it to surging demand from sectors like solar panels and EVs, which have seen demand triple in 3 years. He noted that inventories are critically low with no substantial stockpiles available to mitigate the shortage.
Day further underscored that only about 30% of silver production comes from primary silver mines, with the majority being sourced as a byproduct. This setup means that the supply of newly mined silver does not respond proportionately to price fluctuations. As a result, this could lead to heightened price volatility.
Silver prices have surged significantly this year, prompting speculation about their potential peak in the remaining 6 months. A crucial element to monitor is the supply and demand dynamics, as silver demand consistently exceeds supply.
Historically, silver demand was evenly split between industrial use and investment. However, industrial demand has surged recently, now accounting for 64% of global silver demand, a 19% increase from the previous year.
The World Silver Survey reports that 2024 marks the 5th consecutive year of a silver shortage. In 2023, demand exceeded supply, resulting in a market deficit of over 142 million ounces. This shortfall is projected to nearly double to 265 million ounces by the end of 2024 due to rising industrial demand.
This upward trend is expected to continue, driven primarily by the Green Energy Transition, especially solar energy.
Photovoltaic Surge: Solar Energy’s Growing Appetite for Silver
A growing solar power industry is fueling up the surge in the demand for silver, essential for manufacturing photovoltaic (PV) panels. Due to its high electrical conductivity, thermal efficiency, and optical reflectivity, silver is integral to solar PV production. Consequently, mining companies are aiming to boost output as silver prices climb to decade highs.
Global investment in solar PV manufacturing more than doubled last year to around $80 billion, accounting for 40% of global investment in clean-technology manufacturing, according to the International Energy Agency (IEA). China significantly increased its investment in solar PV manufacturing between 2022 and 2023.
Global renewable capacity increased by 50% to nearly 510 gigawatts last year—the fastest growth rate in 3 decades. Three-quarters of this growth came from solar PV energy, as reported by the IEA.
Demand for silver from solar PV panel manufacturers, especially in China, is forecast to increase by almost 170% by 2030. The amount could reach about 273 million ounces, which would constitute about one-fifth of total silver demand, according to investment manager Sprott.
Coeur Mining is expanding to meet the rising silver demand, completing a significant expansion of a mine in Nevada, which will become the largest source of domestically produced silver in the U.S.
London-based Hochschild Mining is also expanding its silver operations, aiming to secure permits for a silver project in southern Peru later this year. Scheduled to start production in 2027, the project is expected to add 50 million ounces of silver annually.
Some experts noted that given the underlying industrial demand dynamics and existing supply constraints, the industry may be seeing the start of a silver bull market.
Silver’s New Gold Rush
The boom in demand has led to soaring silver prices, reaching $31.3/oz as of writing. This price surge has bolstered the share prices of silver miners.
However, rising silver prices might force solar PV panel manufacturers to increase their prices later this year.
Paul Wong, a market strategist at Sprott, predicts that silver could see a rise similar to gold, which hit eight straight sessions of record highs in April. Despite trailing gold’s popularity with central banks and sovereign institutions, silver maintains a strong correlation with gold. Wong expects substantial buying from the photovoltaic industry to drive further silver demand, noting that:
“Similar to how gold bullion has soared due to a new wave of major purchasers among central banks and sovereign entities, silver has and will likely see even more substantial buying from the photovoltaic industry.”
Discussing government influence on silver mining, industry leaders highlighted regulatory policies in major jurisdictions like Mexico. The South American nation can either stimulate or deter investment in silver projects due to lengthy permitting processes.
As silver demand continues to soar, driven by its critical role in solar power and the clean energy transition, the industry faces significant challenges in meeting global needs. Despite robust price signals and increased production efforts, the supply constraints highlight the urgency for innovative solutions and strategic investments to sustain this pivotal resource’s future.
The post Silver Lining: Soaring Demand Outstrips Supply, Pushing Prices to The Roof appeared first on Carbon Credits.
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
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