EV Battery Supply Chain Sustainability
Life cycle impacts and the role of recycling
About this report
Rapidly rising demand for electric vehicles (EVs) and, more recently, for battery storage, has made batteries one of the fastest-growing clean energy technologies. Battery demand is expected to continue ramping up, raising concerns about sustainability and demand for critical minerals as production increases.
This report analyses the emissions related to batteries throughout the supply chain and over the full battery lifetime and highlights priorities for reducing emissions. Life cycle analysis of electric cars shows that they already offer emissions reductions benefits at the global level when compared to internal combustion engine cars. Further increasing the sustainability of battery supply chains, such as through recycling, can further enhance these benefits and reduce the need for primary critical minerals supply. Governments and industry are already taking steps towards improving battery sustainability and circularity, but further and more widespread efforts will be needed as the market scales up.
We explore the different life cycle emissions associated with different battery chemistries, and consequently, the varying strategies that should be pursued to reduce those emissions. This includes a focus on the role of recycling in reducing the need for primary critical minerals supply, as well as how international trade of second-hand EVs can have implications for recycling strategies. The report concludes with recommendations for policy makers.
Highlights
- Battery demand is set to continue growing fast based on current policy settings, increasing four-and-a-half times by 2030 and more than seven times by 2035. The role of emerging markets and developing economies (EMDEs) other than People’s Republic of China (hereafter, “China”) is expected to grow, reaching 10% of global battery demand by 2030, up from 3% in 2023. Battery production is also expected to diversify, mostly thanks to investments in Europe and North America under current policies, and – if all announced climate pledges are fulfilled – through larger demand and production in EMDEs other than China.
- From a life cycle perspective, the emissions of a medium-size battery electric car are half the emissions of an equivalent internal combustion engine (ICE) car as a global average. This difference in emissions is similar to the global average in China, larger in the United Kingdom and Chile (over 60%), and smaller in India (20%).
- Battery-related emissions play a notable role in electric vehicle (EV) life cycle emissions, though they are not the largest contributor. However, reducing emissions related to battery production and critical mineral processing remains important. Emissions related to batteries and their supply chains are set to decline further thanks to the electrification of production processes, increased energy density and use of recycled materials.
- In the next decade, recycling will be critical to recover materials from manufacturing scrap, and looking further ahead, to recycle end-of-life batteries and reduce critical minerals demand, particularly after 2035, when the number of end-of-life EV batteries will start growing rapidly. If recycling is scaled effectively, recycling can reduce lithium and nickel demand by 25%, and cobalt demand by 40% in 2050, in a scenario that meets national climate targets. Scaling up recycling facilities and increasing collection rates of end-of-life batteries will be essential.
- Second-hand EVs could boost electric mobility in EMDEs other than China. Strengthening international co-operation is central to support international trade of second-hand EVs while ensuring adequate end-of-life strategies for the vehicles and their batteries.