There is an urgent need for a significant increase in the pace and depth of international collaboration to ensure the sustainability and responsible conduct of battery supply chains as global sales of electric vehicles accelerate. Today’s battery supply chains are very concentrated:
China produces three-quarters of all lithium-ion batteries and is home to 70%
of production capacity for cathodes and 85% for anodes (both of which are key components
of batteries). Over half of the world’s lithium, cobalt and graphite processing and refining
capacity is located in China. In contrast, Europe produces over one-quarter of global EVs
but it is home to very little supply chain activity apart from cobalt processing at 20%, while the United States accounts for only 10% of EV and 7% of battery production capacity (IEA,
2021b). Working together, countries can influence the incentives for manufacturers
throughout the global market. As the transition moves forward, the expansion and
diversification of these supply chains would help to increase the sector’s resilience.
Finally, as energy transitions gain momentum, security of mineral supply is gaining
prominence in the energy security debate. Governments can take a number of measures
to broaden supply. Support for geological surveys, and streamlining of planning processes
can help. Reducing material intensity and encouraging material substitution via technology
innovation can also play major roles in alleviating strains on supply, while also reducing
costs.
International efforts should focus on agreeing harmonised international standards for
lifetime sustainability, design, operation and end-of-life treatment of EV batteries, to reduce
dependency on critical materials from mining and increase sustainability throughout supply
chains. Factors to consider include the carbon intensity of power inputs and processing of
battery metals, the quantity of water use for battery production, the social responsibility of
sourced minerals, and other environmental, societal and economic aspects. This may be
enabled by transparency standards that mandate actors along the supply chain to provide
fully traceable products, and to ensure that third party independent organisations adopt
internationally consistent methods to track, assess and verify the sustainability
performance of mining and production practices for battery supply chains. It can also be
complemented by harmonising the way that recycling-relevant information is provided, or
even setting standards for battery disassembly. Further, international cooperation on
recycling processes and technologies could spur their cost-effective and widespread
adoption.
Countries should also consider how to ensure security of supply and increase the resilience
of battery supply chains. This could include measures to reduce material demand in novel
battery chemistry designs, to diversify regional distribution and market players within each
step of supply chain, to create coalitions to procure supplies, and to ensure that minerals
in used battery re-enter the value chain.
Full Report: https://iea.blob.core.windows.net/assets/49ae4839-90a9-4d88-92bc-371e2b24546a/THEBREAKTHROUGHAGENDAREPORT2022.pdf
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