A White Paper released recently by the World Economic Forum (WEF) in collaboration with RMI and the Global Battery Alliance – Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity – looks at measures needed to be taken to enable a circular battery economy.
The demand for EV batteries (EVBs) is rising, and with it, the need for critical minerals and other raw materials, says the paper.
According to the International Energy Agency (IEA), the global annual demand for EVBs is projected to grow to 5.5 terawatt-hour (TWh) in 2030 and 9.1 TWh by 2035 in a “net-zero emissions by 2050” scenario.
To meet this growing EVB demand, annual mineral demand can be expected to reach 909 kilotonnes (kt) per year for lithium, 2,590kt per year for nickel and 247kt per year for cobalt by 2035.
“Battery chemistry innovations and density improvements have significantly reduced nickel and cobalt demand, and the trend is expected to accelerate in the future,” says the White Paper.
Demand for lithium – the common mineral for nearly all of today’s EVB chemistries – is expected to grow significantly more than nickel and cobalt demand.
According to IEA forecasts, supply from current and projected mining alone is insufficient to meet this growing demand: forecasted supply from existing and announced mining projects will meet only 39%, 69% and 62% of projected annual demand from EVBs and other uses of lithium, nickel and cobalt, respectively, for the year 2035 in a Net Zero Scenario.
“This could put the EV transition at risk. (These forecasts do not include any supply from EVB recycling, which will meet part of the demand. Forecasts will continue to change with rapidly evolving battery and recycling technology, continually changing supply projections and regular re-evaluations of EV demand forecasts.)”
This report identifies concerns about today’s EVB value chain that contribute to negative environmental and social impacts and hinder the development of equitable socio-economic value.
It uses insights gleaned from an expert advisory panel, the Global Future Council on the Future of Responsible Resource Use, and secondary research.
Developing standardised, interoperable track-and-trace platforms. You can’t manage what you can’t see and measure. Following a battery and its materials from extraction to production to end of life (EOL) can help battery manufacturers and automakers make responsible purchasing decisions; ensure adherence to environmental and human rights principles and regulations; and provide critical information about repair, reuse, repurposing and recycling that stakeholders need to plan and invest effectively.
Setting performance and data standards and financing R&D for design innovation that prioritises disassembly and recyclability alongside safety, cost and range. Battery design today prioritises first-life performance – but choices made in battery design influence, if not determine, whether a battery can and will be repaired, reused, repurposed and recycled.
Additionally, access to data about the battery’s design, health and remaining useful life is crucial for enabling safe, efficient and economical second life and EOL management. Developing performance and data standards, implementing supportive policy, and finding innovative ways to finance R&D for battery design can help prioritise second life and EOL management in battery design and data-sharing.
Using targeted policy interventions to help overcome economic and technical barriers faced in recycling and second life. High capex requirements, insufficient feedstock volumes and volatile mineral markets subject EVB recycling to financial uncertainty and put the industry at risk.
Similarly, declining new battery prices, uncertainty around the value of used batteries, and high costs and technical challenges of reuse and repurposing may prevent the second-life industry from scaling up.
Policy intervention is needed to support these emerging industries at this critical moment as a wave of EVBs reaching end of first life approaches, creating the opportunity to increase resource efficiency, reduce the embedded environmental and social impacts of EVBs, and capitalise on the substantial socio-economic opportunities associated with second-life batteries.
Developing regional, circular value chains within a global circular economy, and facilitating responsible cross-border movement of batteries and battery materials. Today’s EVB supply chain is both geographically concentrated and dispersed: concentrated because mining, refining, processing and assembly take place in just a few countries and dispersed because battery materials travel tens of thousands of miles as they move through the value chain.
These factors weaken the resilience of the value chain while driving up emissions. At the same time, today’s movement patterns and international regulations related to EV batteries may cause inadvertent harm to the developing economies that import used vehicles and batteries. Enabling more countries to participate in the value chain, and facilitating responsible movement of batteries and battery materials can increase resilience, reduce emissions and prevent inadvertent harm to developing markets while building a circular battery economy.
Investing in the workforce needed for a circular battery economy by training and re-skilling for circular jobs, integrating and preventing development of informal markets, and prioritising principles of just transition. In a circular battery economy, the value chain will no longer rely on virgin minerals, resulting in job losses in mining-related industries.
The workers displaced and others can take advantage of the many circular career opportunities that will become available if they receive upskilling and re-skilling support. Governments, industry representatives and educational institutions will need to work together to ensure that workers have the skills they need to succeed in the circular economy.
The White Paper says that a “resilient, responsible battery value chain that enables the EV transition, respects human rights and protects the environment is within reach.”
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