EVs were considered to be the poster child for the green transition. But recent criticisms about the environmental damage of Lithium mining, alongside the fact that EV production releases higher emissions than ICE vehicles have made the world question if EV are really green? If not, how do we make them greener?
According to estimates, about 40-60% of the carbon footprint of an EV comes from its battery production. This has therefore become a critical point to reduce carbon footprint for both OEMs & battery makers. In addition, Article 7 and Annex II of the EU Battery Regulation mandate a 3rd party verified LCA (Life Cycle Analysis) revealing the carbon footprint of each battery by maker to be publicly available by February of 2025. This is part of a larger EU wide effort to have ‘battery passports’ for all EV and Industrial batteries sold in the EU by 2027. This passport would ideally become the central datapoint to set, reach & verify ambitious targets to make greener batteries.
At the time of writing the article, only 3 of the 15 major battery makers in the EU have publicly disclosed carbon footprint – Northvolt: 33Kg CO2e/kWh (for their NMC battery), Gotion-HighTech: 85Kg CO2e/kWh (for the entire company) & Magna Energy Storage: 73.4 Kg CO2e/kWh (cradle to grave for their BTS 1.2kWh ‘Robusta’ battery cell). There are still caveats about the type of disclosing, notably like Gotion’s disclosed LCA is for the whole group rather than by battery type. Another example is the world’s largest battery manufacturer, CATL disclosing only scope 1 & 2 emissions instead of a total LCA with scope 3.
The combination of raising awareness of EV battery’s carbon footprint & regulations make 2024 a challenging and exciting year for OEMs and battery makers. In addition to the competitive pricing, OEMs will now also have to review the carbon footprint they’ll take in from their battery supplier to keep their value chain in check.
Not all batteries are made equal…
You might’ve come across different types of Lithium-ion batteries like NMC-811, NMC-622 and LFP or even salt (Sodium) batteries. Each of these batteries have different cathode chemistry that defines its name, like, NMC is Lithium Nickel Manganese Cobalt Oxide. The numbers represent the molar proportions of the respective materials in the cathode – an NMC 811 is 80% Nickel, 10% of both Manganese and Cobalt Oxide, for every part of Lithium.
The cathode of the batteries contain ‘active materials’ that are rare in nature and are difficult to find and process. Thus, making the production of cathodes one of the most carbon intensive processes in battery production. The chemistry of the cathode is therefore one of the most crucial drivers of the carbon footprint of a battery.
As of 2023, about 60% of electric car batteries produced were NMC batteries (Lithium Nickel Manganese Cobalt Oxide), of which 54% & 6% are high-Nickel and low-Nickel variants respectively. While NMC batteries have higher energy density (and therefore a better driving range) & faster charging cycles, mining Cobalt and Nickel (have a higher carbon intensity) is highly polluting to the environment. On average, NMC batteries have a carbon footprint of 79 kg CO2eq/ kWh, of which cathode production contributes to about 59% (46.6 CO2eq/ kWh).
LFP (Lithium iron phosphate) batteries present a strong case with the abundant supply, non-toxic composition and therefore a lower cost. But the trade off here is that LFP batteries currently have slightly lower energy density compared to NMC batteries. On average, LFP batteries have a carbon footprint of 54.7 kg CO2eq/ kWh (about 70% of the carbon footprint of NMC batteries), of which cathode production contributes to only 31% (17 CO2eq/ kWh). This lowering effect traced back to the GHG intensity from high electricity consumption in mining & refining of Nickel.
In 2023, 40% of electric car batteries were LFP. More than 95% of them are present in China & the remaining from the US. ElevenEs started their first LFP battery gigafactory in EU (Serbia) that became operational in Q3 2023.
Another alternative for Lithium-ion batteries like LFP & NMC are Sodium-ion batteries. Sodium is more than 1000 times more abundant than Lithium and widely available across the world, unlike Lithium that is concentrated in countries like China & Australia, thus making it significantly cheaper to produce Sodium-ion batteries. But the lower energy density makes these more appropriate for stationary storage application instead of EVs. Some studies have revealed that Sodium-ion batteries have higher GHG emissions in production than Lithium-ion batteries as more materials require processing. But with advancement in technology & scale economies, Sodium-ion batteries are expected to become greener than Lithium counterparts.
While the above-mentioned LFP & NMC batteries have a liquid/gel-based cathode, there is emergence of newer batteries with a solid cathode called Solid State Batteries (SSBs). The shift from liquid to solid cathodes to not a mere material change, but an inherent change to the internal architecture of a battery. SSBs have a higher energy density, faster changing possibilities & a longer lifespan compared to liquid/gel-based counterparts. But challenges with raw material extract & processing and battery production keep the carbon footprint of SSBs in the production phase at similar or higher levels compared to liquid/gel-based counterparts. But the longer lifespan & higher energy density will dramatically reduce their carbon footprint during the use phase. Will the lower emissions from the use phase incentivise battery makers and OEMs to shift towards SSBs is a critical point of debate.
Factors contributing to carbon intensity of EV batteries –
While it is clear that cathode chemistries affect the environmental intensity of each battery, this does not mean that all batteries of the same chemistry have similar GHG emissions. For a given chemistry, there are two major contributing factors to the carbon footprint in EV battery production – a) Sourcing/extraction process of metals and materials; b) Electricity used (derived from non-carbon sources, like wind and solar or fossil fuel dependant, like coal and lignite).
Sourcing: refers to the choice of provider for a given material, with various suppliers employing different methods of extraction, tapping into deposits of different geological nature, with the active battery material found at different concentrations. These three criteria lay the foundation of the GHG emissions from sourcing.
For instance, Lithium mined in Australia has 15-20 tons of GHG emissions per ton of Lithium produced. In contrast, Lithium mined from Chile’s Atacama Salt Flat has only 4 tons of emissions. This is partly because Australian Lithium is produced from hard rock mining, while Chilean Lithium is found in the form of brines (underwater saline lakes), these different forms require different methods of extraction & purification. Also, the time between investment decisions and first production for Brine extraction could be as long as 7 years, but would take only 4 years for hard rock Lithium.
Even within metallic ores of the same form, the method of extraction has an impact on the carbon intensity of the metal. Nickel, a metal that makes up 15-25% of the mass of an NMC battery, when found in their laterite form can be processed in two methods, HPAL (high pressure acid leaching) and NPI (nickel pig iron). While processing with the HPAL method emits 19 tons of GHGs, NPI emits a staggering 59 tons of GHGs per ton of Nickel produced, according to estimates by IEA.
Further, take Argentina & Chile’s Atacama, both of which have Lithium reserves in Brines, but the concentration of Lithium in raw brine is 0.05% and 0.15% respectively. The lower Li concentration in Argentina requires longer processing times, resulting in 7-8 tons of GHG emissions per ton of Lithium produced.
As we further into the green transition, and the demand for Lithium skyrockets, we turn to the remaining reserves on Earth that have just 50% to 33% of concentration compared to the current reserves that we use, making it significantly more carbon intensive to process & purify them.
The sourcing of low carbon raw materials is becoming important to battery makers to keep emissions in check. A majority of battery makers have already signed deals/partnerships to source low carbon materials for newer generation battery production affecting upstream productions. For example, Panasonic Energy has signed a purchase agreement with Redwood Materials for recycled cathode materials and copper foils for their new plant. CATL partnered with Volvo to procure recycled materials from Volvo certified recyclers to reuse in new battery production.
Electricity Used: Largely affected by the geographical location of the factory, carbon footprint of batteries produced in countries with decarbonized grids such as Sweden, France, Switzerland are estimated to be ~60% less than those produced in China. This is an estimated 133 Mt of CO2e savings if Europe can produce batteries locally to meet demand from 2024 to 2030.
As an example, another factor for the significantly high carbon footprint of Australian Lithium mining is the use of carbon intensive fuels like Diesel in extraction and almost all of the Lithium is processed in China that heavily relies on coal & lignite.
With the future increase in demand for Lithium and we turn to the remaining reserves that have only 50% – 33% purity compared to our current reserves, it becomes very important to shift production towards greener electricity to keep the carbon footprint of EV batteries to the lowest level possible.
It is to be noted that companies can generate their own electricity and/or source exclusively from green sources, hence, their geography albeit having an impact on the type of electricity might not be completely representative. For instance, InoBat signed a strategic partnership with ScottishPower, a subsidiary of Iberdrola, for their proposed UK factory that is pending finalization of location or the new NorthVolt factory under construction in Heide, Northern Germany to be powered by locally generated wind energy.
Conclusion
By Q2 2025, we should see a large-scale availability of battery LCAs becoming public by companies in the EU. This could lead to a push by battery makers & OEMs to their suppliers, initially to have GHG tracking mechanisms (especially non-EU suppliers) and further push for lowering these emissions. An interesting aspect to look out for is the difference in pricing greener materials in the market. Will they cost the same? Will there be a ‘green premium’? What will customer reactions be to the costs being passed on to them?
But the story doesn’t end here; Carbon intensity via GHG emissions is not the only environmental impact that the production of EV batteries (or any manufactured goods) have. There are still a myriad of disruptions to the environment like child labor & dire working conditions for Cobalt mining in the Democratic Republic of Congo, chemical runoffs into water bodies from Copper mining being fatal for birds in Chile or chemical contamination of water from Nickel mining affecting fishing communities and coral reefs in Indonesia. While these do not fall into the scope of GHG emissions, these are major concerns that are likely to (at least) be tracked with the new EU EV battery passport as a cross-reference to a production spot.
Disclaimer: It is to be noted that company LCAs in the article are self-reported and not part of the EU directive, mandating publicly available LCA. This is set to come into effect by Q2 2025. In addition, the GHG emission figures of each battery, like NMC, are averages across various cathode chemistries, across different methods of extraction and different types of purification. GHG emissions refers to CO2e emissions unless explicitly mentioned otherwise.