Its time to create a domestic supply chain for critical battery materials
www.fastcompany.com
The topic of critical materials and where they are sourced is at a pivotal point in the world of lithium-ion batteries. The United States challenges around developing a domestic supply chain for these materials needs to be at the forefront of conversations. Our countrys national security and global competitiveness in sourcing the critical materials that go into producing batteries depends on itand we must act now.By 2030, more than 900 GWh of capacity will be built in the U.S., with cell manufacturers, gigafactories, and original equipment manufacturers requiring more raw materials than are currently available to meet the expected battery demand. Since raw materials make up the largest category of battery manufacturing costs, we can shift the paradigm by restructuring how we acquire materials domestically, which includes critical mineral recycling and refinement, ultimately keeping them in our supply chains.Furthermore, North America and Europe are each anticipated to produce about 20% of all global battery cells by 2030. By using recycled content via refinement to support this manufacturing need, alongside virgin raw materials, we are setting the stage now for those future needs. Policies will play an integral role in regulating how much recycled content is required in new battery manufacturing. For example, as part of the European Unions Green Deal, minimum levels of recycled lithium content must be 6% by 2031 and 12% by 2036.The foreign and domestic supply chainThe Department of Energy funding through the Bipartisan Infrastructure Law focused on the clean energy sector. This has been instrumental in moving that mindset and this industry forward. However, to keep the momentum, more needs to happen to strengthen our domestic supply chains in 2025. China currently refines 85% of rare earth metals, as well as 70% of global capacity for battery cathodes, and 70% of lithium-ion cells. Without building these supply chains in new markets, producers outside of North America will only become even more powerful in the critical minerals sector. While these challenges may seem large, they are not insurmountable, and private and public sectors partnerships are the key to solving these challengers. The battery industry has attracted billions of dollars of investments, driven job growth, is creating positive economic impact, and in the long-term will greatly benefit our national security. At the same time it is enhancing the United States global competitiveness, ultimately reducing our reliance on foreign sources of these materials.Its important to recognize that foreign prices of mined materials do not always reflect their full or true costs. Instead, they may bear a given countrys geopolitical costs and its desire to corner the market for critical materials, allowing foreign pricing to more easily undercut domestic pricing.How to move forwardThe Department of Energy efforts to support U.S.-based businesses growth, expanding economic development and technology advancements, are commendable. These partnerships between public and private organizations are necessary to create and strengthen a fully circular, closed-loop domestic supply chain that prioritizes the recycling, critical mineral refinement, and reuse of these materials. We have the opportunity today to build a domestically-sourced supply chain that utilizes both recycled and virgin raw materials to positively impact generations to come. The largest global operating mine for these critical minerals today is driving around our roads. So, lets take whats on our roads or found in our junk drawers, and using sustainable solutions, create a closed-loop supply chain that integrates recycled content as a necessary component into the overall strategy. David Klanecky is president and CEO of Cirba Solutions
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