Why the battery industry must secure and diversify graphite supply chains

Ivan Williams, CEO of CarbonScape, discusses the scale of the challenge involved in scaling up graphite supply chains to meet exploding demand and why the lithium-ion battery industry needs to diversify its supply chains.

Batteries are integral in the transition to clean transport and energy systems. Not only would the electrification of vehicles be impossible without them, but their provision of grid-scale energy storage represents the backbone of a future powered by renewable energy.

As a condensed carbon, graphite is an exceptional conductor of electricity with high energy density. This means it’s perfect for batteries, comprising up to 50% of the weight of a lithium-ion battery. Hence, the security of supply for this component is a crucial part of global efforts to tackle climate change.

Like many of the other materials identified in the EU’s Critical Raw Materials Act (and the U.S. Department of Energy’s finalised critical materials list), it underpins technological advancement and powers the global economy.

Scale of the challenge

Graphite supply chains are already showing signs of major strain, with supply unable to match exploding demand, driven largely by the rapid uptake of electric vehicles (EVs), whose sales have increased by 35% year-on-year since 2016. Recent projections show a global deficit of 777,000 tonnes per year by 2030. This shortfall represents a significant challenge to countries’ climate goals.

In addition, of the types of graphite currently on the market, there is a strong preference for synthetic graphite because of its higher performance than natural (mined) graphite.

Meeting demand with just synthetic graphite would require countries to more than triple their existing chemical production capacity and make them fully dependent on high-emission processes that rely on fossil fuel-based feedstocks.

Fulfilling demand with mined graphite, on the other hand, would require almost 100 new mines. Notably, each of these would cost citizens hundreds of millions of dollars and have enormous negative social and environmental impacts. Meeting demand for this form of graphite would also result in poorer quality batteries, risking the public’s good faith in the reliability of clean technologies.

It’ll take a village to address this huge global challenge.

Biographite as a solution

Alternative innovations will be needed to provide the kinds of solutions that can work with existing technologies and give us a tangible solution.

One such solution is biographite. Produced from forestry by-products, such as wood chips, biographite is a new form of synthetic graphite. By using less than 5% of the forestry industry’s annual by-products in Europe and North America, we know we can produce enough of it to meet half the total projected global demand for both EV and grid-scale batteries by 2030.

Its production can also be scaled much faster than its traditional synthetic and natural counterparts. While it can take 12-18 years to commission a new mine in the EU and the US, a biographite plant, by comparison, can be permitted in under 12 months. Once operational, these plants can then produce biographite in mere hours, as opposed to the weeks and months currently required to produce anode-grade graphite.

The need to diversify graphite supply chains

As well as the current demand shortfall, China currently dominates graphite supply chains, producing 98% of the final, processed material that is used to make battery anodes. Any disruption to production or exports there would pose a grave threat to countries’ climate goals.

Concerningly, the Chinese government has already shown an inclination towards weaponising its dominance. For example, in July 2023, it imposed restrictions on the export of gallium and germanium, which are commonly used in semiconductors. Crucially, just last week, China upped the ante – announcing plans to restrict exports of (higher-grade) graphite from December.

The need to diversify this critical material’s supply chain cannot be overstated. As technology and electrification continues to advance, so will graphite’s importance. Localising production will play a key role in making this happen. Development of solutions like biographite, that come from local, sustainable feedstocks, will ensure secure supply chains in the face of China’s dominance, while also shortening them.

Outcome of the International Summit

These global challenges speak to the importance of the IEA’s recent decision to create a new Energy Security and Critical Minerals Division, and to host the first-ever international summit on critical minerals and their role in clean energy transition at the end of September this year.

This Summit delivered six key actions for secure, sustainable, and responsible supply chains:

• Accelerate progress towards diversified mineral supplies;
• Unlock the power of technology and recycling;
• Promote transparency in markets;
• Enhance the availability of reliable information;
• Create incentives for sustainable and responsible practices; and
• Foster international collaboration.

A path forward

Sustainable alternatives to critical materials can help countries progress many of these actions, particularly by accelerating the diversification of graphite supply chains.

At first glance, action two appears particularly challenging for graphite, as it cannot typically be recycled. However, when considered more broadly, existing replacements speak to this point by repurposing local by-products that would otherwise have been left to decompose, reducing waste alongside the additional greenhouse gases that it would have otherwise released.

Such substitutes can tap into the potential of technology to improve resource efficiency. Biographite, for example, produces a carbon-negative alternative to the critical material that removes the equivalent of 2.7 tonnes of carbon emissions for each tonne of biographite that it produces.

By comparison, the production of traditional synthetic graphite emits a staggering 35 tonnes of carbon emissions for every tonne and the extraction and production processes required to deliver a single tonne of anode-grade graphite from mined graphite can leave a hefty 15 tonne carbon footprint.

By enabling the localisation of supply chains, this solution speaks to the third action too: onshoring production promotes greater transparency for end users in an otherwise opaque market.

Conclusion

Implemented effectively, action could drive significant positive impact, empowering innovators from all walks of life to address our world’s biggest challenges. Regardless of the forms that these incentives take, cross-country collaboration will be crucial for realising this potential and for a just transition in which cutting-edge innovations become another part of our day-to-day lives