The Paradox of Green Growth: Challenges and Opportunities in Decarbonizing the Lithium-Ion Supply Chain

ABSTRACT

Global decarbonization is a megatrend destined to impact multiple sectors of the economy. The commodity sector in particular looks set to benefit, given the acute need for raw materials to feed the energy transition. This global transition will take decades and while an "all of the above” energy policy will be necessary, the lithium-ion battery promises to play a central role in the decarbonization of the transportation and grid scale energy storage sectors. With lithium-ion battery costs falling steadily since the early 1990s, many believe that the technology promises to become even more ubiquitous, helping to electrify the global economy. Recent exogenous shocks such as the US-China trade war, COVID-19, and the Russian invasion of Ukraine have underlined the fragility of global energy supply chains and the need for a resilient global energy infrastructure. While solutions to the exogenous shocks seem straightforward, there is an increasingly evident paradox. To achieve significant decarbonization and electrification goals, more, not fewer, battery raw materials will be required and the energy used to produce these materials will almost certainly originate from fossil fuels, possibly slowing the decline of the carbon intensity of industry. Innovation along the supply chain is the only realistic way to achieve large-scale decarbonization. This will require R&D, necessitating a coordinated response between the public and private sector as supply chains evolve. This chapter looks at the geopolitical, economic, technological, and legislative challenges and opportunities that green growth presents in the lithium-ion battery ecosystem as the industry embarks on a rapid growth phase. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.