CEOforLIFE

CONTACTS

No Result
View All Result
CEOforLIFE
  • CEOs
    • CEOs HUB
    • CEOs TALKS
    • CEOs AGENDA
    • CEOs MAGAZINE
  • SDGs
    • PROJECTS
    • FORUM
    • AMBASSADORS
    • INSTITUTIONS
  • NOMINATION
    • NOMINATION by Countries
    • NOMINATION by SDGs
  • CEOforLIFE AWARDS
    • Global Awards 2022 – Emirates
  • COUNTRIES
    • GLOBAL
      • AUSTRALIA
      • DENMARK
      • GERMANY
      • ITALY
      • JAPAN
      • MALAYSIA
      • SINGAPORE
      • SPAIN
      • SWITZERLAND
      • UNITED ARAB EMIRATES
      • UNITED KINGDOM
      • UNITED STATES
  • VISION
    • HOW IT WORKS
    • MANIFESTO
    • MISSION
  • JOIN
CEOforLIFE
  • CEOs
    • CEOs HUB
    • CEOs TALKS
    • CEOs AGENDA
    • CEOs MAGAZINE
  • SDGs
    • PROJECTS
    • FORUM
    • AMBASSADORS
    • INSTITUTIONS
  • NOMINATION
    • NOMINATION by Countries
    • NOMINATION by SDGs
  • CEOforLIFE AWARDS
    • Global Awards 2022 – Emirates
  • COUNTRIES
    • GLOBAL
      • AUSTRALIA
      • DENMARK
      • GERMANY
      • ITALY
      • JAPAN
      • MALAYSIA
      • SINGAPORE
      • SPAIN
      • SWITZERLAND
      • UNITED ARAB EMIRATES
      • UNITED KINGDOM
      • UNITED STATES
  • VISION
    • HOW IT WORKS
    • MANIFESTO
    • MISSION
  • JOIN
No Result
View All Result
CEOforLIFE
Home CEOs HUB Francis Wedin

Will European Automakers Pay a Premium For Lithium?

There are a number of lithium projects being developed in Europe including Vulcan Energy Resources’ zero-carbon lithium extraction from geothermal brine in Germany.

7 December 2021
Reading Time: 4 mins read
0 0
Will European Automakers Pay a Premium For Lithium?
0
SHARES
60
VIEWS
Share on LinkedinShare on Twitter

The European Parliament endorsed a fee on carbon-intensive items imported into Europe on February 5, 2021, and asked the European Commission to adopt a “carbon border adjustment mechanism” (CBAM) as soon as feasible.

This is because foreign partners’ lack of intention might jeopardise Europe’s attempts to achieve carbon neutrality by 2050.

This would imply the possibility of carbon leakage. This happens when corporations shift manufacturing to or source products from nations with laxer emission regulations. Global emissions would not be lowered in this instance.

This newly implemented CBAM mechanism will reduce this risk by imposing a carbon price on some commodities imported from outside the EU.

According to a European committee, the CBAM should encompass all imports, but as a starting point, it should cover the electricity sector and energy-intensive industrial sectors such as cement, steel, chemicals, and fertilisers by 2023.

The fee will be connected to a revamped emissions trading programme (ETS), with the proceeds going toward EU and international climate goals.

What does this mean for lithium? According to EU Commissioner Thierry Breton, “we are completely reliant on lithium chemical imports.” Lithium would fall under the CBAM’s “chemicals” category.

Prior to Volkswagen Power Day, it was predicted that Europe will require about 500,000t of lithium chemicals by 2030 to supply the raw materials for its planned 500GWh lithium-ion battery production capacity.

Volkswagen said at its Power Day that it will develop six giga-factories of 40GWh each (two of which were previously considered into the prediction), bringing Europe’s total battery capacity to more than 700GWh. The quantity of lithium compounds required to meet the demand of this expanding industry sector in Europe alone is more than 700,000 tonnes per year, which is more than twice the amount produced globally currently. There is no indigenous manufacture of lithium compounds in Europe.

Because the bulk of participants want to create long-range batteries with high nickel content, demand for lithium hydroxide will likely account for the lion’s share of the European lithium industry.

China now supplies more than 80% of the world’s lithium hydroxide supply. China’s lithium chemistry industry is thought to be the most polluting in the world. According to a Life Cycle Analysis conducted by the London-based consultancy business Minviro, every tonne of lithium hydroxide produced in China emits 15 tonnes of CO2.

With such an emission profile, the lithium extraction process is worse than nickel, copper, or cobalt mining.

Despite the fact that a number of firms are actively attempting to reduce carbon emissions associated with lithium manufacturing, there is still an urgent need to do more. Most stakeholders, including lithium players, are pressuring them to reform, including:

  • Automobile manufacturers and battery manufacturers intend to achieve carbon neutrality in the near future.
  • Regulators such as the European Commission and its new Battery Regulation are putting pressure on manufacturers to change their sourcing strategy, and
  • Investors who are diversifying away from carbon-intensive businesses.

In Europe, several lithium projects are under development, notably Vulcan Energy Resources’ zero-carbon lithium extraction from geothermal brine in Germany. However, programmes like as Vulcan’s Zero Carbon LithiumTM Project will not be ready for commercial production until 2024.

As a result, European lithium customers will continue to get carbon-heavy lithium goods from China until they have the option of buying domestically and sustainably.

Even though the contents and methods have yet to be finalised, the EU will begin implementing the CBAM as early as 2023. This might significantly increase the cost of importing lithium compounds from China.

According to Bloomberg, the Bank of England cautioned banks and companies in January 2021 that carbon prices may quadruple to $100 per tonne, and that costs could potentially surpass $100 if the transition to a low-carbon economy is sudden or lumpy.

To analyse the possible impact on imported lithium pricing, we must first make a few plausible assumptions.

In our scenario, we suppose that a European client intends to purchase one tonne of lithium hydroxide from China in 2025, and that the Chinese producer continues to emit 15 tonnes of CO2 per tonne of lithium hydroxide. We also assume that the CBAM is in place with rigorous CO2 neutrality aims and that carbon prices are at the Bank of England’s target of $100 per tonne.

In this example, the buyer would be charged an extra $1,500 per tonne of lithium to account for the CBAM, which would represent a 14 percent price premium above today’s LME pricing of $10,500 per tonne of lithium hydroxide announced by Fastmarkets.

According to the preceding example, this would have considerable cost implications for a customer of the magnitude of Volkswagen. According to recent claims, Volkswagen may need more than 200,000 tonnes of lithium compounds per year alone for its European production locations by 2030. Including the aforesaid assumptions in our forecasts would result in an extra annual expenditure of $300 million to pay the CBAM for lithium.

It is still too early to determine how significantly EU legislation would affect costs for European lithium customers, but there is obviously a strong incentive to push the entire sector toward carbon neutrality, and those that do not adapt will have to pay a premium for it.

 

CEOforLIFE – We promote life. We support the SDGs.
Source: Vincent Ledoux Pedailles - Vice President, Business Development at Vulcan Energy Resources
Tags: SDGs13SDGs17SDGs8SDGs9
Next Post
WA FIRMS LEAD PURSUIT OF NET ZERO GREENHOUSE GAS EMISSIONS

WA FIRMS LEAD PURSUIT OF NET ZERO GREENHOUSE GAS EMISSIONS

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular News

  • 21 Sustainability Innovations That Might Just Change the World

    21 Sustainability Innovations That Might Just Change the World

    0 shares
    Share 0 Tweet 0
  • All-New Soleic™ Biodegradable Polyurethane Foams Pass A Critical Test

    0 shares
    Share 0 Tweet 0
  • Desalination initiatives in Saudi Arabia are focusing on sustainability and energy

    0 shares
    Share 0 Tweet 0
  • International Earth Day 2022: Theme, History, and Significance

    0 shares
    Share 0 Tweet 0
  • Top marks for PUMA’s sustainability efforts 

    0 shares
    Share 0 Tweet 0
  • Trending
  • Comments
  • Latest
Bladeless Wind Turbines Could Be The Future Of Green Energy

Bladeless Wind Turbines Could Be The Future Of Green Energy

14 January 2022
21 Sustainability Innovations That Might Just Change the World

21 Sustainability Innovations That Might Just Change the World

10 November 2021
Enerkem achieves a major breakthrough by producing sustainable aviation fuel from local forest biomass

Enerkem achieves a major breakthrough by producing sustainable aviation fuel from local forest biomass

2 March 2022
Bladeless wind turbine that vibrates to generate power could save more than 500,000 birds killed each year by spinning blades, experts say

Bladeless wind turbine that vibrates to generate power could save more than 500,000 birds killed each year by spinning blades, experts say

27 January 2022
Wiggling Wind Power

Wiggling Wind Power

Class A biosolids and the future of biosolids management

Class A biosolids and the future of biosolids management

Bladeless wind turbine that vibrates to generate power could save more than 500,000 birds killed each year by spinning blades, experts say

Bladeless wind turbine that vibrates to generate power could save more than 500,000 birds killed each year by spinning blades, experts say

What is a “carbon border adjustment mechanism”?

What is a “carbon border adjustment mechanism”?

H&M and Decathlon will make donations and scale back sustainability claims in order to avoid a Dutch Greenwashing crackdown.

H&M and Decathlon will make donations and scale back sustainability claims in order to avoid a Dutch Greenwashing crackdown.

16 September 2022
According to Amazon’s cloud CEO, sustainability and profits “do not have to be at odds.”

According to Amazon’s cloud CEO, sustainability and profits “do not have to be at odds.”

15 September 2022
Pots & Co replaces ceramic pots with glass to strengthen sustainability

Pots & Co replaces ceramic pots with glass to strengthen sustainability

14 September 2022
Google has one of the most ambitious sustainability programmes in Big Tech. Here’s its three-step strategy for saving the earth.

Google has one of the most ambitious sustainability programmes in Big Tech. Here’s its three-step strategy for saving the earth.

13 September 2022

EDITORIAL BOARD

  • About us
  • Join
  • The Magazine

CATEGORIES

  • SDGs
  • CEOforLIFE AWARDS
  • NOMINATION
  • JOIN
Read the magazine
  • Cookie Policy
  • Privacy Policy

© 2021 GFA GENERAL MANAGEMENT S.R.L. | P.IVA 11182700960

No Result
View All Result
  • CEOs
    • CEOs HUB
    • CEOs TALKS
    • CEOs AGENDA
    • CEOs MAGAZINE
  • SDGs
    • PROJECTS
    • FORUM
    • AMBASSADORS
    • INSTITUTIONS
  • NOMINATION
    • NOMINATION by Countries
    • NOMINATION by SDGs
  • CEOforLIFE AWARDS
    • Global Awards 2022 – Emirates
  • COUNTRIES
    • GLOBAL
      • AUSTRALIA
      • DENMARK
      • GERMANY
      • ITALY
      • JAPAN
      • MALAYSIA
      • SINGAPORE
      • SPAIN
      • SWITZERLAND
      • UNITED ARAB EMIRATES
      • UNITED KINGDOM
      • UNITED STATES
  • VISION
    • HOW IT WORKS
    • MANIFESTO
    • MISSION
  • JOIN

© 2021 GFA GENERAL MANAGEMENT S.R.L. | P.IVA 11182700960

Welcome Back!

OR

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}