Electric vehicles (EVs) are rapidly gaining popularity around the world as governments and consumers seek to reduce carbon emissions and adopt a more sustainable lifestyle. As a result, there has been a surge in demand for lithium-ion batteries that power these vehicles. However, the production of these batteries relies on raw material extraction, which can lead to environmental degradation, human rights abuses, and other issues.
To address these concerns, the battery industry is making efforts to create a circular and responsible supply chain for EV batteries. This article explores the challenges and initiatives related to sustainable sourcing for EV batteries, including efforts to create a circular economy and responsible mineral sourcing.
Sustainable Sourcing for Electric Vehicle Batteries
Currently, the production of EV batteries relies heavily on raw materials such as lithium, cobalt, and nickel. These materials are often sourced from areas with poor governance or weak environmental regulations, such as the Democratic Republic of Congo.
To address these issues, battery makers are exploring new ways to source raw materials sustainably. BASF, for example, has adopted a due diligence approach for responsible mineral sourcing and engages in multi-stakeholder initiatives, including the Global Battery Alliance and the Responsible Minerals Initiative, to ensure sustainable battery material sourcing.
Machine learning is also being used to explore alternative materials and predict underground resources for extraction. In addition, efforts are being made to optimize battery recyclability to reduce waste and promote a circular battery economy.
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Industry Efforts for Sustainable Sourcing
The drive towards sustainable battery sourcing is not a new concept, and various industry stakeholders are working towards ensuring sustainability at every stage of the battery supply chain. Besides battery manufacturers, mining companies also have a role to play in this regard.
Mining companies face obstacles as they balance social issues and lengthy extraction horizons, and thus, the industry seeks traceable environmental assurance programs to ensure ethical supply chains – similar to the copper mark for copper. As a result, mining companies work towards responsible sourcing, all the way from extraction to mineral processing.
The industry is exploring new ways to ensure sustainable and responsible sourcing of battery materials. Quebec has launched the “green footprint optimizer,” which is a tool that verifies sustainability criteria and rules-of-origin compliance in mining and mineral processing. Such independent third-party verification tools are necessary to ensure the integrity of the supply chain.
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Challenges in Sourcing Sustainable Batteries
Despite the increasing demand for EVs and thus their battery supply, OEMs (original equipment manufacturers) face a significant challenge in establishing secure, local, and cost-competitive battery supplies. These challenges stretch to short-term battery supply, especially for OEMs with short and mid-term vehicle programs. OEMs have the responsibility of balancing security, sustainability, and simplicity in their battery sourcing strategy. While transitioning battery markets shift from global to regional dynamics, they create headwinds for OEMs and increase the influence of battery suppliers.
Additionally, global battery supply and demand create a global buyer’s market, which puts pressure on OEMs and leads to cost competitiveness. As demand rises, the pressure to secure battery supply and cost decrease leads to sourcing from regions with weak regulations that cause unacceptable environmental carbon footprints.
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Initiatives for Sustainable and Responsible Battery Value Chains
The creation of a sustainable battery ecosystem is a shared responsibility – with automakers expected to power the future with EVs. The Global Battery Alliance takes on this role by mobilizing businesses, governments, and organizations to ensure a sustainable and responsible battery value chain. This creates an efficient supply chain to guarantee affordable battery supply, with traceable environmental assurance programs for responsible sourcing.
The Global Battery Alliance aims to standardize the battery industry, incentivize the battery market’s circular nature, and ensure EV batteries’ recyclability. By working with responsible suppliers, ensuring ethical supply chains, and encouraging the recycling of EV batteries, its initiatives will make the EV battery industry more sustainable in the years to come.
Automakers are also discussing ESG sourcing directly with mining companies to raise standards in sustainable sourcing. This approach directly rewards suppliers who adopt green practices in raw material extraction.
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The increasing demand for EVs highlights the urgent need for sustainable and responsible battery material sourcing and recyclability. Industry initiatives and collaborations with stakeholders across the supply chain are essential to creating a circular and responsible battery value chain.
Sustainable battery sourcing depends on the efforts of battery makers, mining companies, OEMs, and regulators to ensure sustainable, ethical, and responsible sourcing of battery materials. As we move closer to decarbonized transportation, we emphasize the circular and responsible battery value chain to reduce the environmental impact of the production loop.
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